Exhibit 4.1


 


EXECUTION VERSION


 


 




 





 


OTELCO INC.

and the Guarantors from time to time party hereto,

as Guarantors


 


 










 


Wells Fargo Bank, National Association


 


Trustee


 


 










 


INDENTURE


 


 


Dated as of December 21, 2004


 


 










 


13% Senior Subordinated Notes Due 2019


 




 
























 


Table of Contents


 


	
  ARTICLE
  1 Definitions And Incorporation By Reference

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
   

  
	
  SECTION 1.02.

  	
  Other Definitions

  	
   

  
	
  SECTION
  1.03.

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  
	
  SECTION 1.04.

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  2 The Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  2.01.

  	
  The
  Notes; Amount Unlimited

  	
   

  
	
  SECTION
  2.02.

  	
  Form
  and Dating

  	
   

  
	
  SECTION
  2.03.

  	
  Execution
  and Authentication

  	
   

  
	
  SECTION
  2.04.

  	
  Registrar
  and Paying Agent

  	
   

  
	
  SECTION
  2.05.

  	
  Paying
  Agent To Hold Money in Trust

  	
   

  
	
  SECTION
  2.06.

  	
  Holders
  Lists

  	
   

  
	
  SECTION
  2.07.

  	
  Transfer
  and Exchange

  	
   

  
	
  SECTION 2.08.

  	
  Physical Notes

  	
   

  
	
  SECTION
  2.09.

  	
  Replacement
  Notes

  	
   

  
	
  SECTION
  2.10.

  	
  Outstanding
  Notes

  	
   

  
	
  SECTION
  2.11.

  	
  Temporary
  Notes

  	
   

  
	
  SECTION
  2.12.

  	
  Cancellation

  	
   

  
	
  SECTION
  2.13.

  	
  CUSIP
  Numbers

  	
   

  
	
  SECTION
  2.14.

  	
  Tax
  Treatment

  	
   

  
	
  SECTION
  2.15.

  	
  Maturity

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  3 Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  3.01.

  	
  Notices
  to Trustee

  	
   

  
	
  SECTION
  3.02.

  	
  Selection
  of Notes to be Redeemed

  	
   

  
	
  SECTION
  3.03.

  	
  Notice
  of Redemption

  	
   

  
	
  SECTION
  3.04.

  	
  Effect
  of Notice of Redemption

  	
   

  
	
  SECTION
  3.05.

  	
  Deposit
  of Redemption Price

  	
   

  
	
  SECTION
  3.06.

  	
  Notes
  Redeemed in Part

  	
   

  
	
  SECTION
  3.07.

  	
  Redemption
  of Notes

  	
   

  
	
  SECTION
  3.08.

  	
  Automatic
  Separation of IDSs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  4 Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.01.

  	
  Payment
  of Notes; Interest Deferral

  	
   

  
	
  SECTION
  4.02.

  	
  Reports
  and Other Information

  	
   

  
	
  SECTION
  4.03.

  	
  Limitations
  on Incurrence of Indebtedness and Issuance of Disqualified Stock and
  Preferred Stock

  	
   

  
	
  SECTION 4.04.

  	
  Limitation on Restricted Payments

  	
   

  
	
  SECTION 4.05.

  	
  Dividend and Other Payment Restrictions
  Affecting Subsidiaries

  	
   

  



 





















 


	
  SECTION 4.06.

  	
  Asset Sales

  	
   

  
	
  SECTION 4.07.

  	
  Transactions with Affiliates

  	
   

  
	
  SECTION 4.08.

  	
  Liens

  	
   

  
	
  SECTION 4.09.

  	
  Change of Control

  	
   

  
	
  SECTION 4.10.

  	
  Compliance Certificate

  	
   

  
	
  SECTION 4.11.

  	
  Further Instruments and Acts

  	
   

  
	
  SECTION 4.12.

  	
  Future Guarantors

  	
   

  
	
  SECTION 4.13.

  	
  Limitation on Layering

  	
   

  
	
  SECTION 4.14.

  	
  Subsequent Issuance

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 Successor Company

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Merger, Consolidation or Sale of All or
  Substantially All Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 Defaults And Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Events of Default

  	
   

  
	
  SECTION 6.02.

  	
  Acceleration.

  	
   

  
	
  SECTION 6.03.

  	
  Other Remedies

  	
   

  
	
  SECTION 6.04.

  	
  Waiver of Past Defaults

  	
   

  
	
  SECTION 6.05.

  	
  Control by Majority

  	
   

  
	
  SECTION 6.06.

  	
  Limitation on Suits

  	
   

  
	
  SECTION 6.07.

  	
  Rights of Holders to Receive Payment

  	
   

  
	
  SECTION 6.08.

  	
  Collection Suit by Trustee

  	
   

  
	
  SECTION 6.09.

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  SECTION 6.10.

  	
  Trustee May Enforce Claims Without
  Possession of Notes

  	
   

  
	
  SECTION 6.11.

  	
  Priorities

  	
   

  
	
  SECTION 6.12.

  	
  Undertaking for Costs

  	
   

  
	
  SECTION 6.13.

  	
  Waiver of Stay or Extension Law

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Duties of Trustee

  	
   

  
	
  SECTION 7.02.

  	
  Rights of Trustee

  	
   

  
	
  SECTION 7.03.

  	
  Individual Right of Trustee

  	
   

  
	
  SECTION 7.04.

  	
  Trustee’s Disclaimer

  	
   

  
	
  SECTION 7.05.

  	
  Notice of Defaults

  	
   

  
	
  SECTION 7.06.

  	
  Reports by Trustee to Holders

  	
   

  
	
  SECTION 7.07.

  	
  Compensation and Indemnity

  	
   

  
	
  SECTION 7.08.

  	
  Replacement of Trustee

  	
   

  
	
  SECTION 7.09.

  	
  Successor Trustee by Merger

  	
   

  
	
  SECTION 7.10.

  	
  Eligibility; Disqualification

  	
   

  
	
  SECTION 7.11.

  	
  Conflicting Interests

  	
   

  
	
  SECTION 7.12.

  	
  Preferential Collection of Claims Against
  Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 Discharge Of Indenture;
  Defeasance

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  Satisfaction and Discharge of Indenture

  	
   

  



 


ii





















 


	
  SECTION 8.02.

  	
  Legal and Covenant Defeasance; Conditions
  to Defeasance

  	
   

  
	
  SECTION 8.03.

  	
  Repayment to Company.

  	
   

  
	
  SECTION 8.04.

  	
  Indemnity for Government Obligations.

  	
   

  
	
  SECTION 8.05.

  	
  Reinstatement.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Without Consent of Holders

  	
   

  
	
  SECTION 9.02.

  	
  With Consent of Holders

  	
   

  
	
  SECTION 9.03.

  	
  Notice to Holders

  	
   

  
	
  SECTION 9.04.

  	
  Compliance with Trust Indenture Act

  	
   

  
	
  SECTION 9.05.

  	
  Revocation and Effect of Consent and
  Waivers

  	
   

  
	
  SECTION 9.06.

  	
  Notation on or Exchange of Notes

  	
   

  
	
  SECTION 9.07.

  	
  Trustee To Sign Amendments

  	
   

  
	
  SECTION 9.08.

  	
  Payment for Consent.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  10

  	
   

  
	
   

  	
   

  	
   

  
	
  Subordination

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  Agreement To Subordinate

  	
   

  
	
  SECTION 10.02.

  	
  Liquidation, Dissolution or Bankruptcy

  	
   

  
	
  SECTION 10.03.

  	
  Default on Designated Senior Indebtedness

  	
   

  
	
  SECTION 10.04.

  	
  When Distribution Must Be Paid Over

  	
   

  
	
  SECTION 10.05.

  	
  Subrogation

  	
   

  
	
  SECTION 10.06.

  	
  Relative Rights

  	
   

  
	
  SECTION 10.07.

  	
  Subordination May Not Be Impaired by the
  Company

  	
   

  
	
  SECTION 10.08.

  	
  Right of Trustee and Paying Agent

  	
   

  
	
  SECTION 10.09.

  	
  Distribution or Notice to Representative

  	
   

  
	
  SECTION 10.10.

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

  	
   

  
	
  SECTION 10.11.

  	
  Trust Moneys Not Subordinated

  	
   

  
	
  SECTION 10.12.

  	
  Trustee Entitled To Rely

  	
   

  
	
  SECTION 10.13.

  	
  Trustee To Effectuate Subordination

  	
   

  
	
  SECTION 10.14.

  	
  Trustee Not Fiduciary for Holders of Senior
  Indebtedness

  	
   

  
	
  SECTION 10.15.

  	
  Reliance by Holders of Senior Indebtedness
  on Subordination Provisions

  	
   

  
	
  SECTION 10.16.

  	
  Defeasance

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 Guarantees

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  Guarantee

  	
   

  
	
  SECTION 11.02.

  	
  Limitation on Liability

  	
   

  
	
  SECTION 11.03.

  	
  Successors and Assigns

  	
   

  
	
  SECTION 11.04.

  	
  No Waiver

  	
   

  
	
  SECTION 11.05.

  	
  Modification

  	
   

  
	
  SECTION 11.06.

  	
  Execution of Supplemental Indenture for
  Future Guarantors

  	
   

  



 


iii





















 


	
  SECTION 11.07.

  	
  Notation Not Required

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 Subordination Of The Guarantees

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.01.

  	
  Agreement To Subordinate

  	
   

  
	
  SECTION 12.02.

  	
  Liquidation, Dissolution or Bankruptcy

  	
   

  
	
  SECTION 12.03.

  	
  Default on Designated Senior Indebtedness
  of a Guarantor

  	
   

  
	
  SECTION 12.04.

  	
  Demand for Payment

  	
   

  
	
  SECTION 12.05.

  	
  When Distribution Must Be Paid Over

  	
   

  
	
  SECTION 12.06.

  	
  Subrogation

  	
   

  
	
  SECTION 12.07.

  	
  Relative Rights

  	
   

  
	
  SECTION 12.08.

  	
  Subordination May Not Be Impaired by a
  Guarantor

  	
   

  
	
  SECTION 12.09.

  	
  Right of Trustee and Paying Agent

  	
   

  
	
  SECTION 12.10.

  	
  Distribution or Notice to Representative

  	
   

  
	
  SECTION 12.11.

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

  	
   

  
	
  SECTION 12.12.

  	
  Trustee Entitled To Rely

  	
   

  
	
  SECTION 12.13.

  	
  Trustee To Effectuate Subordination

  	
   

  
	
  SECTION 12.14.

  	
  Trustee Not Fiduciary for Holders of Senior
  Indebtedness of Guarantor

  	
   

  
	
  SECTION 12.15.

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

  	
   

  
	
  SECTION 12.16.

  	
  Defeasance

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13 Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01.

  	
  Trust Indenture Act Controls

  	
   

  
	
  SECTION 13.02.

  	
  Notices

  	
   

  
	
  SECTION 13.03.

  	
  Communication by Holders with Other Holders

  	
   

  
	
  SECTION 13.04.

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  SECTION 13.05.

  	
  Statements Required in Certificate or
  Opinion

  	
   

  
	
  SECTION 13.06.

  	
  When Notes Disregarded

  	
   

  
	
  SECTION 13.07.

  	
  Rules by Trustee, Paying Agent and
  Registrar

  	
   

  
	
  SECTION 13.08.

  	
  Legal Holidays

  	
   

  
	
  SECTION 13.09.

  	
  Governing Law

  	
   

  
	
  SECTION 13.10.

  	
  No Recourse Against Others

  	
   

  
	
  SECTION 13.11.

  	
  Successors

  	
   

  
	
  SECTION 13.12.

  	
  Multiple Originals

  	
   

  
	
  SECTION 13.13.

  	
  Table of Contents; Headings

  	
   

  



 


	
  Exhibit A

  	
  -

  	
  Form of Global Note

  
	
  Exhibit B

  	
  -

  	
  Form of Physical Note

  
	
  Exhibit C

  	
  -

  	
  Form of Supplemental Indenture for
  Guarantors

  
	
  Exhibit D

  	
  -

  	
  Form of Solvency Certificate

  



 


iv





















 


Certain Sections of this Indenture relating to
Sections 310 through 318


 


inclusive of the Trust
Indenture Act of 1939:


 


	
  Trust Indenture Act Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  § 310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  Not Applicable

  
	
  (a)(4)

  	
   

  	
  Not Applicable

  
	
  (b)

  	
   

  	
  7.11

  
	
  § 311(a)

  	
   

  	
  7.12

  
	
  (b)

  	
   

  	
  7.12

  
	
  § 312(a)

  	
   

  	
  2.06

  
	
  (b)

  	
   

  	
  13.03

  
	
  (c)

  	
   

  	
  13.03

  
	
  § 313(a)

  	
   

  	
  7.06

  
	
  (b)

  	
   

  	
  7.06

  
	
  (c)

  	
   

  	
  7.06

  
	
  (d)

  	
   

  	
  7.06

  
	
  § 314(a)

  	
   

  	
  4.02

  
	
  (a)(4)

  	
   

  	
  13.04

  
	
   

  	
   

  	
  7.05

  
	
  (b)

  	
   

  	
  Not Applicable

  
	
  (c)(1)

  	
   

  	
  13.05

  
	
  (c)(2)

  	
   

  	
  13.05

  
	
  (c)(3)

  	
   

  	
  Not
  Applicable

  
	
  (d)

  	
   

  	
  Not Applicable

  
	
  (e)

  	
   

  	
  13.05

  
	
  § 315(a)

  	
   

  	
  7.01

  
	
  (b)

  	
   

  	
  7.05

  
	
  (c)

  	
   

  	
  7.01

  
	
  (d)

  	
   

  	
  7.01

  
	
  (d)(1)

  	
   

  	
  7.01

  
	
  (d)(2)

  	
   

  	
  7.01

  
	
  (d)(3)

  	
   

  	
  6.05

  
	
  (e)

  	
   

  	
  6.12

  



 


v





















 


	
  Trust Indenture Act Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  § 316(a)

  	
   

  	
  6.05

  
	
   

  	
   

  	
  6.04

  
	
  (a)(1)(A)

  	
   

  	
  13.06

  
	
   

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  Not
  Applicable

  
	
  (b)

  	
   

  	
  6.07

  
	
  (c)

  	
   

  	
  9.05

  
	
   

  	
   

  	
   

  
	
  § 317(a)(1)

  	
   

  	
  6.03

  
	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.05

  
	
  § 318(a)

  	
   

  	
  13.01

  



 


This
cross-reference table shall not for any purpose be deemed to be part of this
Indenture.


 


vi





















 


INDENTURE,
dated as of December 21, 2004
(as amended, supplemented or otherwise modified from time to time, this “Indenture”),
among OTELCO INC., a Delaware corporation (the “Company”), each subsidiary of
the Company listed on the signature pages hereto (the “Guarantors”), and Wells
Fargo Bank, National Association, as trustee (the “Trustee”).


 


The Company
has duly authorized the execution and delivery of this Indenture to provide for
the issuance of the Notes.  Each
Guarantor party hereto as of the date hereof has duly authorized the execution
and delivery of this Indenture to provide for its guarantee of the Notes, as
provided in this Indenture.  Each
Guarantor party hereto as of the date hereof has received good and valuable
consideration for its execution and delivery of this Indenture and its
guarantee of the Notes.


 


NOW, THEREFORE, THIS INDENTURE WITNESSETH:


 


For and in
consideration of the premises and the purchase of (i) the Company’s 13% senior subordinated notes issued
on the date hereof (the “Original Notes”), and (ii) any Additional Notes (as
defined herein) that may be issued on any date after the Issue Date, it is
mutually agreed, for the benefit of all Holders of the Notes, as follows:


 


ARTICLE 1


 


DEFINITIONS AND INCORPORATION BY REFERENCE


 


SECTION 1.01.      Definitions.


 


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


 


(i)            Indebtedness of any other Person
existing at the time such other Person is merged with or into or became a
Restricted Subsidiary of such specified Person; and


 


(ii)           Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person,


 


in each case,
other than Indebtedness Incurred as consideration in, in contemplation of, or
to provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was otherwise
acquired by such Person, or such asset was acquired by such Person, as applicable.


 


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


 


(i)            taxes paid and provision for taxes
based on income or profits of such Person for such period to the extent such
taxes or provision for taxes were deducted in computing Consolidated Net
Income, plus


 


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


 





















 


(iii)          Consolidated Depreciation and
Amortization Expense of such Person for such period to the extent such
Consolidated Depreciation and Amortization Expense was deducted in computing
Consolidated Net Income, plus


 


(iv)          any non-recurring fees, expenses or charges
related to any Securities Offering, Permitted Investment, acquisition, or
Indebtedness permitted to be Incurred by this Indenture (in each case, whether
or not successful), deducted in such period in computing Consolidated Net
Income, plus


 


(v)           the amount of annual management and
advisory fees and related expenses paid to Seaport Capital, deducted in such
period in computing Consolidated Net Income during any period prior to the
Issue Date, plus


 


(vi)          any other non-cash charges reducing
Consolidated Net Income for such period (excluding any such charge which
requires an accrual of, or cash reserve for, anticipated cash charges for any
future period).


 


Notwithstanding
the foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization of, a Subsidiary of the Company shall be
added to Consolidated Net Income to compute Adjusted EBITDA only to the extent
(and in the same proportion) that the Net Income of such Subsidiary was
included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be paid as a dividend
to the Company by such 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 Subsidiary or its stockholders.


 


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


 


“Asset
Sale” means:


 


(i)            the sale, conveyance, transfer or
other disposition (whether in a single transaction or a series of related
transactions) of property or assets (including by way of a Sale/Leaseback
Transaction) of the Company or any Restricted Subsidiary (each referred to in
this definition as a “disposition”); or


 


2





















 


(ii)           the issuance or sale of Equity
Interests of any Restricted Subsidiary (other than to the Company or another
Restricted Subsidiary) (whether in a single transaction or a series of related
transactions),


 


in each case
other than:


 


(a)                                  a disposition of Cash
Equivalents or Investment Grade Securities in the ordinary course of business;


 


(b)                                 the disposition of all
or substantially all of the assets of the Company in a manner permitted
pursuant to Section 5.01 or any disposition that constitutes a Change of
Control;


 


(c)                                  any Restricted
Payment or Permitted Investment that is permitted to be made, and is made,
under Section 4.04;


 


(d)                                 any disposition of
assets with an aggregate Fair Market Value of less than $5.0 million;


 


(e)                                  any disposition of
property or assets by a Restricted Subsidiary to the Company or by the Company
or a Restricted Subsidiary to a Restricted Subsidiary;


 


(f)                                    any exchange of
like-kind property pursuant to Section 1031 of the Internal Revenue Code for
use in a Similar Business;


 


(g)                                 sales of assets
received by the Company upon the foreclosure on a Lien;


 


(h)                                 any sale of Equity
Interests in, or Indebtedness or other securities of, an Unrestricted
Subsidiary;


 


(i)                                     contemporaneous
exchanges by the Company or any Restricted Subsidiary of Communication Assets
for other Communications Assets in the ordinary course of business so long as
the applicable Communication Assets received by the Company or such Restricted
Subsidiary have at least substantially equal Fair Market Value as determined by
a majority of the Board of Directors in good faith;


 


(j)                                   the grant of Liens
not prohibited by this Indenture;


 


(k)                                  any disposition of
obsolete, worn out, uneconomical or surplus property or equipment in the
ordinary course of business;


 


(l)                                     licenses of intellectual
property;


 


(m)                               any disposition of
Designated Noncash Consideration; and


 


(n)                                 sales of inventory in
the ordinary course of business consistent with past practices and sales of
equipment upon termination of a contract with a client entered into in the
ordinary course of business pursuant to the terms of such contract.


 


3





















 


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


 


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


 


“Business
Day” means a day other than a Saturday, Sunday or
other day on which banking institutions in Minnesota or New York State are
authorized or required by law to close.


 


“Capital
Expenditures” means any expenditure required to be
classified as a capital expenditure in accordance with GAAP.


 


“Capital
Stock” means:


 


(i)            in the case of a corporation,
corporate stock, including, without limitation, corporate stock represented by
IDSs and corporate stock outstanding upon the separation of IDSs into the
securities represented thereby;


 


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


 


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


 


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


 


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


 


“Cash
Equivalents” means:


 


(i)            U.S. dollars and foreign currency
exchanged into U.S. dollars within 180 days;


 


(ii)           securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof;


 


(iii)          certificates of deposit, time deposits
and Eurodollar time deposits with maturities of one year or less from the date
of acquisition, bankers’ acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any commercial bank having capital
and surplus in excess of $500.0 million and whose long-term debt is rated at
least “A” or the equivalent thereof by Moody’s or S&P;


 


(iv)          repurchase obligations for underlying
securities of the types specified in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above;


 


4





















 


(v)           commercial paper issued by a
corporation (other than an Affiliate of the Company) rated at least “A-2” or
the equivalent thereof by Moody’s or S&P and in each case maturing within
one year after the date of acquisition;


 


(vi)          investment funds investing at least
95% of their assets in securities of the types specified in clauses (i) through
(v) above;


 


(vii)         readily marketable direct obligations
issued by any state of the United States of America or any political
subdivision thereof having one of the two highest rating categories obtainable
from either Moody’s or S&P; and


 


(viii)        Indebtedness or preferred stock issued
by Persons with a rating of “A” or higher from S&P or “A-2” or higher from
Moody’s.


 


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


 


(i)            the sale, lease or transfer, in one
or a series of related transactions, of all or substantially all of the Company’s
assets on a consolidated basis to any person or group (as such term is used in
Section 13(d)(3) of the Exchange Act) other than the Permitted Holders;


 


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


 


(iii)          the consummation of any transaction
the result of which is that any Person or group (as such term is used in
Section 13 (d) (3) of the Exchange Act) other than the Permitted Holders is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause such Person or group
shall be deemed to have ‘‘beneficial ownership’’ of all shares that any such
Person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the voting power of the voting stock of the Company, by way of
purchase, merger or consolidation or otherwise (other than a creation of a
holding company that does not involve a change in the beneficial ownership of
the Company as a result of such transaction);


 


(iv)          the merger or consolidation of the
Company with or into another Person or the merger of another Person into the
Company with the effect that immediately after such transaction the
stockholders of the Company immediately prior to such transaction hold,
directly or indirectly, less than 50% of the total voting power of all
securities generally entitled to vote in the election of directors, managers,
or trustees of the Person surviving such merger or consolidation, in each case
other than creation of a holding company that does not involve a change in the
beneficial ownership of the Company as a result of such transaction; or


 


(v)           the first day on which a majority of
the members of the Board of Directors of the Company are not Continuing
Directors.


 


“Class
A Common Stock” means the Company’s Class A common
stock represented by the IDSs, par value $0.01 per share.


 


5





















 


“Class
B Common Stock” means the Company’s Class B common
stock, par value $0.01 per share.


 


“Communication
Assets” means any property or assets, whether real,
personal or mixed, tangible, including Capital Stock in, and other securities
of, any other Person, including licenses and applications, bids and agreements
to acquire licenses, or other authority to provide telecommunication services,
previously granted, or to be granted, by the Federal Communications Commission,
used or intended for use primarily in connection with a Similar Business.


 


“Company”
means Otelco Inc. until a successor replaces it and, thereafter, means the
successor and, for purposes of any provision contained in this Indenture and
required by the Trust Indenture Act, each other obligor on the Notes.


 


“consolidated”
with respect to any Person shall mean such Person consolidated with its
Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but
the interest of such Person in an Unrestricted Subsidiary will be accounted for
as an Investment.


 


“Consolidated
Depreciation and Amortization Expense” means with
respect to any Person for any period, the total amount of depreciation and
amortization expense of such Person and its Restricted Subsidiaries for such
period on a consolidated basis and otherwise determined in accordance with
GAAP.


 


“Consolidated
Interest Expense” means, with respect to any Person
for any period, consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, to the extent such expense was deducted in computing
Consolidated Net Income, determined on a consolidated basis and otherwise
determined in accordance with GAAP, plus, to the extent not included in such
consolidated interest expense, and to the extent Incurred by the Company or its
Restricted Subsidiaries, without duplication:


 


(i)            interest expense attributable to
leases constituting part of a Sale/Leaseback Transaction and/or Capitalized
Lease Obligations;


 


(ii)           amortization of debt discount and
debt issuance cost;


 


(iii)          capitalized interest;


 


(iv)          non-cash interest expense;


 


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


 


(vi)          net costs associated with Hedging
Obligations (including amortization of fees);


 


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


 


6





















 


(viii)        interest in respect of Indebtedness of
any other Person to the extent such Indebtedness is guaranteed by the Company
or any Restricted Subsidiary, but only to the extent that such interest is
actually paid by the Company or any Restricted Subsidiary; and


 


(ix)           the earned discount or yield with
respect to the sale of receivables.


 


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


 


(i)            any net after-tax extraordinary
gains or losses (less all fees and expenses relating thereto) shall be
excluded;


 


(ii)           any increase in amortization or
depreciation resulting from purchase accounting in relation to any acquisition
that is consummated after the Issue Date, net of taxes, shall be excluded;


 


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


 


(iv)          any
net after-tax income or loss from discontinued operations and any net after-tax
gains or losses on disposal of discontinued operations shall be excluded;


 


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


 


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


 


(vii)         the
Net Income for such period of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of its Net Income is not at the
date of determination permitted without any prior governmental approval (which
has not been obtained) or, directly or indirectly, by the operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, unless such restrictions with respect to the
payment of dividends or in similar distributions have been legally waived;
provided that the net loss of any such Restricted Subsidiary shall be included;


 


(viii)        any non-cash compensation expense
realized for grants of performance shares, stock options or other stock awards
to officers, directors and employees of the Company or any Restricted
Subsidiary shall be excluded; and


 


(ix)           any non-cash impairment charges
resulting from the application of Statement of Financial Accounting Standards
No. 142 shall be excluded.


 


7





















 


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


 


“Continuing
Directors” means, as of any date of determination, any
member of the Company’s Board of Directors who:


 


(i)            was a member of the Company’s Board
of Directors on the date of this Indenture; or


 


(ii)           was nominated for election or elected
to the Board of Directors with the affirmative vote of at least a majority of
the Continuing Directors who were members of the Company’s Board of Directors
at the time of the nomination or election.


 


“Credit
Agreement” means the credit agreement dated as of
December 21, 2004, among the Company, the Subsidiaries of the Company named
therein, the financial institutions from time to time a party thereto and
General Electric Capital Corporation, as Administrative Agent, as amended,
restated, supplemented, waived, replaced, restructured, repaid, increased, refunded,
refinanced or otherwise modified from time to time (whether or not terminated
and whether with the original lenders or otherwise), including any successor or
replacement facility extending the maturity thereof or otherwise restructuring
all or any portion of the Indebtedness under such agreement or increasing the
amount of available borrowings thereunder (except to the extent that any such
amendment, restatement, supplement, waiver, replacement, refunding, refinancing
or other modification thereto, in each case relating to increases in Indebtedness, would be
prohibited by the terms of this Indenture, unless otherwise agreed to by the
Holders of at least a majority in aggregate principal amount of Notes at the
time outstanding).


 


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


 


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


 


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


 


“Designated
Capital Expenditures” means the positive result, if
any, of (A) Capital Expenditures for the relevant period minus (B) Net
Available Cash (except to the extent such Net Available Cash is included in
Adjusted EBITDA) of any asset sale (net of repayments of Indebtedness
therewith) applied pursuant to the Asset Sales provisions of the Credit Agreement to finance such
Capital Expenditures and pursuant to Section 4.06.


 


“Designated
Noncash Consideration” means the Fair Market Value of
noncash consideration received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an Officers’


 


8





















 


Certificate, setting forth the
basis of such valuation, less the amount of Cash Equivalents received in
connection with a subsequent sale of such Designated Noncash Consideration.


 


“Designated
Preferred Stock” means Preferred Stock of the Company
(other than Disqualified Stock) that is issued for cash (other than to a
Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries) and is so designated as
Designated Preferred Stock, pursuant to an Officers’ Certificate, on the
issuance date thereof, the cash proceeds of which are excluded from the
calculation set forth in Section 4.04(c).


 


“Designated
Senior Indebtedness” means (i) the Senior Lender
Indebtedness and (ii) any other Senior Indebtedness of the Company with a
principal amount in excess of $25.0 million and designated by the Company as
Designated Senior Indebtedness.


 


“Disqualified
Stock” means, with respect to any Person, any Capital
Stock of such Person which, by its terms (or by the terms of any security into
which it is convertible or for which it is redeemable or exchangeable), or upon
the happening of any event:


 


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


 


(ii)           is convertible or exchangeable for
Indebtedness or Disqualified Stock; or


 


(iii)          is redeemable at the option of the
holder thereof, in whole or in part, in each case prior to the first
anniversary of the maturity date of the Notes;


 


provided,
however, that only the portion of Capital Stock which so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable
at the option of the holder thereof prior to such first anniversary shall be
deemed to be Disqualified Stock; provided  further, however,
that if such Capital Stock is issued to any employee or to any plan for the
benefit of employees of the Company or its Subsidiaries or by any such plan to
such employees, such Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Company in order to
satisfy applicable statutory or regulatory obligations or as a result of such
employee’s termination, death or disability. Notwithstanding any provision to
the contrary herein, the Company’s Class B common stock that is exchangeable
for Additional Notes shall not be Disqualified Stock. In addition,
notwithstanding clause (iii) of this definition, any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of
a change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such
repurchase or redemption complies with Section 4.04.


 


“Dividend
Suspension Period” means any period for which the
Interest Coverage Ratio of the Company for the twelve-month period ended on the
last day of the most recently ended fiscal quarter for which internal financial
statements are available is less than 1.40 to 1.00.


 


9





















 


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


 


“Excess
Cash” shall mean, with respect to any period, Adjusted
EBITDA of the Company for such period, minus the sum (without duplication) of
the following, each determined for
such period on a consolidated basis:


 


(i)            cash
interest expense;


 


(ii)           deferred
interest, if any, not otherwise included in clause (i);


 


(iii)          cash
income tax expense;


 


(iv)          Designated
Capital Expenditures (except to the extent financed with an incurrence of
indebtedness, until such indebtedness is repaid);


 


(v)           any
item included under the definition of Adjusted EBITDA that reflects a cash
payment, and


 


(vi)          any
mandatory prepayment that results in a permanent reduction to the principal
amount (or commitments under a revolving facility) of Designated Senior
Indebtedness prior to its scheduled maturity (to the extent not included in the
clauses contained in clauses (i) and (ii) above); provided that if
Senior Indebtedness is Incurred in any such period that replaces Designated
Senior Indebtedness previously prepaid or commitments under a revolving
facility are increased to previous levels, which prepayment (or reduction in
commitments under a revolving credit facility) resulted in a reduction to
Excess Cash pursuant to this clause, Excess Cash shall be increased by an
amount up to such previous reduction.


 


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


 


“Exchange
Conditions” mean the conditions set forth in Section
4.14(d) and the following conditions, all of which must be satisfied at the
time that Class B common stock is exchanged in accordance with its terms into
IDSs of the Company (the ‘‘Exchange’’):


 


(i)            the Exchange must comply with all
applicable laws, including, without limitation, securities laws;


 


(ii)           the Exchange must occur pursuant to
an effective registration statement in the United States;


 


(iii)          the Exchange will not conflict with or
cause a default under any material financing agreement;


 


(iv)          the Exchange will not cause a
mandatory suspension of dividends or deferral of interest under any material
financing agreement as of the measurement date immediately following the
proposed exchange date; and


 


10





















 


(v)           no Default or Event of Default has
occurred and is continuing or will occur as a result of the Exchange under this
Indenture.


 


“Fair
Market Value” means, with respect to any asset or
property, the price which could be negotiated in an arm’s-length, free market
transaction, for cash, between a willing seller and a willing and able buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction.


 


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


 


“Global
Note Custodian” means the party named as such in this
Indenture until a successor replaces it and, thereafter, means the successor
and if at any time there is more than one such party, “Global Note Custodian”
as used with respect to the securities of any series shall mean the Global Note
custodian with respect to securities of that series.


 


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


 


“Guarantee”
means any guarantee of the Company’s obligations under
this Indenture and on the Notes by any Person in accordance with provisions of
this Indenture.


 


“Guarantor”
means any Person that Incurs a Guarantee; provided that upon the release
or discharge of such Person from its Guarantee in accordance with this
Indenture, such Person ceases to be a Guarantor.


 


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


 


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


 


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


 


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


 


“IDSs”
means the Company’s Income Deposit Securities, whether currently outstanding or
as may be issued from time to time.


 


11





















 


“Incur”
means issue, assume, guarantee, incur or otherwise become liable for; provided,
however, that any Indebtedness or Capital Stock of a Person existing at
the time such person becomes a Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Person at the
time it becomes a Subsidiary.


 


“Indebtedness”
means, with respect to any Person:


 


(i)  the
principal and premium (if any) of any indebtedness of such Person, whether or
not contingent:


 


(a)                                  in respect of
borrowed money;


 


(b)                                 evidenced by bonds,
notes, debentures or similar instruments or letters of credit or bankers’ acceptances
(or, without duplication, reimbursement agreements in respect thereof);


 


(c)                                  representing the
deferred and unpaid purchase price of any property, which purchase price is due
more than six months after the date of placing the property in service or
taking delivery and title thereto;


 


(d)                                 in respect of
Capitalized Lease Obligations; or


 


(e)                                  representing any
Hedging Obligations,


 


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


 


(ii)  to
the extent not otherwise included, any obligation of such Person to be liable
for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of
another Person (other than by endorsement of negotiable instruments for
collection in the ordinary course of business); and


 


(iii)  to
the extent not otherwise included, Indebtedness of another Person secured by a
Lien on any asset owned by such Person (whether or not such Indebtedness is
assumed by such Person); provided, however, that the amount of
such Indebtedness will be the lesser of (a) the Fair Market Value of such asset
at such date of determination and (b) the amount of such Indebtedness of such
other Person;


 


provided,
further, that any obligation of the Company or any Restricted Subsidiary
in respect of (i) minimum guaranteed commissions, or other similar payments, to
clients, minimum returns to clients or stop loss limits in favor of clients or
indemnification obligations to clients, in each case pursuant to contracts to
provide services to clients entered into in the ordinary course of business,
and (ii) account credits to participants under the LTIP or any successor or
similar compensation plan, shall be deemed not to constitute Indebtedness.


 


The amount of
any Indebtedness outstanding as of any date shall be:


 


12





















 


(i) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount; and


 


(ii) the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness.


 


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


 


“Interest
Coverage Ratio” for any period, means the ratio of
Adjusted EBITDA to Consolidated Interest Expense for the twelve-month period
ended on the last day of any fiscal quarter.


 


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


 


“Investment
Grade Securities” means:


 


(i)  securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (other than Cash
Equivalents);


 


(ii)  debt
securities or debt instruments with a rating of BBB- or higher by S&P or
Baa3 or higher by Moody’s or the equivalent of such rating by such rating
organization, or if no rating of S&P or Moody’s then exists, the equivalent
of such rating by any other nationally recognized securities rating agency, but
excluding any debt securities or instruments constituting loans or advances
among the Company and its Subsidiaries; and


 


(iii)  investments
in any fund that invests exclusively in investments of the type specified in
clauses (i) and (ii) which fund may also hold immaterial amounts of cash
pending investment and/or distribution.


 


“Investments”
means, with respect to any Person, all investments by such Person in other
Persons (including Affiliates) in the form of loans (including guarantees),
advances or capital contributions (excluding accounts receivable, trade credit
and advances to customers and commission, travel and similar advances to
officers, employees and consultants made in the ordinary course of business),
purchases or other acquisitions for consideration (including agreements
providing for the adjustment of purchase price) of Indebtedness, Equity
Interests or other securities issued by any other Person and investments that
are required by GAAP to be classified on the balance sheet of the Company in
the same manner as the other investments included in this definition to the
extent such transactions involve the transfer of cash or other property.


 


For purposes
of the definition of “Unrestricted Subsidiary” and Section 4.04:


 


(i)  “Investments”
shall include the portion (proportionate to the Company’s equity interest in
such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of
the Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided,


 


13





















 


however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have a permanent “Investment” in an
Unrestricted Subsidiary equal to an amount (if positive) equal to (x) the
Company’s “Investment” in such Subsidiary at the time of such redesignation
less (y) the portion (proportionate to the Company’s equity interest in such
Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the
time of such redesignation; and


 


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


 


“Issue
Date” means the first date on which any Notes are
authenticated.


 


“Leverage
Ratio” means, with respect to any Person on any date,
the ratio of:


 


(i)  total Indebtedness of such Person and its
Restricted Subsidiaries on a consolidated basis as of such date (which shall
include the average daily balance of Indebtedness under any revolving credit
facility during the twelve-month period ended on the last day of the most
recently ended fiscal quarter) to


 


(ii) the
Adjusted EBITDA of such Person for the most recently ended twelve-month period
ended on the last day of any fiscal quarter.


 


In the event
that the Company or any of its Restricted Subsidiaries Incurs or redeems any
Indebtedness or issues or redeems Preferred Stock subsequent to the
commencement of the period for which the Leverage Ratio is being calculated but
prior to the event for which the calculation of the Leverage Ratio is made (the
‘‘Calculation Date’’), then the Leverage Ratio shall be calculated giving pro
forma effect to such Incurrence or redemption of Indebtedness, or such issuance
or redemption of Preferred Stock, as if the same had occurred at the beginning
of the applicable four-quarter period.


 


For purposes
of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as
determined in accordance with GAAP), in each case with respect to an operating
unit of a business, that have been made by the Company or any of its Restricted
Subsidiaries during the four-quarter reference period or subsequent to such
reference period and on or prior to or simultaneously with the Calculation Date
shall be calculated on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, discontinued operations, mergers and consolidations
(and the reduction of any associated interest coverage obligations and the
change in Adjusted EBITDA resulting therefrom) had occurred on the first day of
the four-quarter reference period. If since the beginning of such period any
Person (that subsequently became a Restricted Subsidiary or was merged with or
into the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Investment, acquisition or disposition, have
discontinued any operation, or have engaged in merger or consolidation, in each
case with respect to an operating unit of a business, that would have required
adjustment pursuant to this definition, then the Leverage Ratio shall be
calculated giving pro forma effect thereto for such period as if such


 


14





















 


Investment, acquisition,
disposition, discontinued operation, merger or consolidation had occurred at
the beginning of the applicable four-quarter period.


 


For purposes
of this definition, whenever pro forma effect is to be given to any
transaction, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Company. Any such pro forma
calculation may include adjustments appropriate, in the reasonable
determination of the Company as set forth in an Officers’ Certificate, to
reflect operating expense reductions reasonably expected to result from any
acquisition or merger.


 


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


 


“LTIP”
means any long-term incentive or similar compensation plan maintained by the
Company or its Restricted Subsidiaries.


 


“Management
Group” means the group consisting of the directors,
executive officers and other personnel of the Company on the Issue Date.


 


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


 


“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 Indebtedness 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:


 


(i) 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;


 


(ii) all
payments made on any Indebtedness 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;


 


(iii) 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


 


15





















 


(iv) 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.


 


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


 


“Net
Proceeds” means the aggregate cash proceeds received
by the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash received in respect of or upon
the sale or other disposition of any Designated Noncash Consideration received
in any Asset Sale and 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 the assumption by the acquiring person of
Indebtedness relating to the disposed assets or other considerations received
in any other noncash form), net of the direct costs relating to such Asset Sale
and the sale or disposition of such Designated Noncash Consideration
(including, without limitation, legal, accounting and investment banking fees,
and brokerage and sales commissions), and any relocation expenses Incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements related thereto), amounts required to be applied to the repayment
of principal, premium (if any) and interest on Indebtedness required (other
than pursuant to Section 4.06(b)(i)) to be paid as a result of such transaction
(including in order to obtain any required consent therefor), and any deduction
of appropriate amounts to be provided by the Company as a reserve in accordance
with GAAP against any liabilities associated with the asset disposed of in such
transaction and retained by the Company after such sale or other disposition
thereof, including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.


 


“Notes”
means the Original Notes and any Additional Notes unless expressly provided
otherwise.


 


“Notes
Custodian” means the Trustee, as custodian with
respect to the Global Notes, or any successor entity thereto.


 


“Obligations”
means any principal, interest, penalties, fees, indemnifications,
reimbursements (including, without limitation, reimbursement obligations with
respect to letters of credit and bankers’ acceptances), damages and other
liabilities payable under the documentation governing any Indebtedness; provided
that Obligations with respect to the Notes shall not include fees or
indemnifications in favor of the Trustee and other third parties other than the
Holders of the Notes.


 


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


 


16





















 


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


 


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


 


“Option”
means the right given to the underwriters to purchase
up to 672,513 additional IDSs, representing 672,513 shares of the Class A
Common Stock and $5,043,847.50 aggregate principal amount of Notes for the
purpose of covering over-allotments in connection with the sale of IDSs
pursuant to the underwriting agreement, dated as of December 16, 2004, among
the Company, the guarantors named therein and CIBC World Markets Corp., RBC
Capital Markets Corporation and UBS Securities LLC, as representatives of the
underwriters named therein (the “Underwriting Agreement”).


 


“Pari
Passu Indebtedness” means


 


(i) with
respect to the Company, the Notes and any other Indebtedness of the Company,
other than Senior Indebtedness, Secured Indebtedness or Subordinated
Indebtedness of the Company; and


 


(ii) with
respect to any Guarantor, its Guarantee and any other Indebtedness of such
Guarantor, other than Senior Indebtedness, 
Secured Indebtedness or Subordinated Indebtedness of such Guarantor.


 


“Permitted
Asset Swap” means any one or more transactions in
which the Company or any Restricted Subsidiary exchanges assets for
consideration consisting of:


 


(i) assets
used or useful in a Similar Business; and


 


(ii) any cash
or Cash Equivalents, provided that such cash or Cash Equivalents shall
be considered Net Proceeds from an Asset Sale.


 


“Permitted
Holders” means Seaport Capital and the Management
Group.


 


“Permitted
Investments” means:


 


(i)  any
Investment in the Company or any Restricted Subsidiary;


 


(ii)  any
Investment in Cash Equivalents or Investment Grade Securities;


 


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


 


17





















 


(iv)  any
Investment in securities or other assets not constituting Cash Equivalents and
received in connection with an Asset Sale made pursuant to the provisions of
Section 4.06 or any other disposition of assets not constituting an Asset Sale;


 


(v)  any
Investment existing on the Issue Date;


 


(vi)  advances
to employees not in excess of $1.0 million outstanding at any one time in the
aggregate;


 


(vii)  any
Investment acquired by the Company or any of its Restricted Subsidiaries (a) in
exchange for any other Investment or accounts receivable held by the Company or
any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the Company of such
other Investment or accounts receivable or (b) as a result of a foreclosure by
the Company or any of its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured Investment in
default;


 


(viii)  Hedging
Obligations permitted under Section 4.03(j);


 


(ix)  additional
Investments having an aggregate Fair Market Value, taken together with all
other Investments made pursuant to this clause (ix) that are at that time
outstanding, not to exceed the greater of 7.5% of Tangible Assets or $5.0
million at the time of such Investment (with the Fair Market Value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value);


 


(x)  loans
and advances to officers, directors and employees for business-related travel
expenses, moving expenses and other similar expenses, in each case Incurred in
the ordinary course of business, and account credits and payments to
participants under the LTIP or any successor or similar compensation plan;


 


(xi)  Investments
the payment for which consists of Equity Interests of the Company (other than
Disqualified Stock); provided, however, that such Equity
Interests shall not increase the amount available for Restricted Payments under
Section 4.04(c);


 


(xii)  any
transaction to the extent it constitutes an Investment that is permitted by and
made in accordance with the provisions of Section 4.07(2) (except transactions
specified in clauses (ii), (iii), and (iv) of such paragraph);


 


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


 


(xiv)  Guarantees
issued in accordance with Section 4.03;


 


(xv)  any
Investment by Restricted Subsidiaries in other Restricted Subsidiaries and
Investments by Subsidiaries that are not Restricted Subsidiaries in other
Subsidiaries that are not Restricted Subsidiaries;


 


18





















 


(xvi)  Investments
consisting of purchases and acquisitions of inventory, supplies, materials and
equipment or purchases of contract rights or licenses or leases of intellectual
property, in each case in the ordinary course of business; and


 


(xvii) loans
to unaffiliated clients made in connection with entering into, renegotiating,
renewing or amending contracts to provide products or services not to exceed
$1.0 million in any fiscal year or $3.0 million in aggregate amount at any time
outstanding.


 


“Permitted
Junior Securities” shall mean debt or equity securities
of the Company or any successor corporation issued pursuant to a plan of
reorganization or readjustment of the Company that are subordinated to the
payment of all then-outstanding Senior Indebtedness of the Company at least to
the same extent that the Notes are subordinated to the payment of all Senior
Indebtedness of the Company on the Issue Date, so long as (a) to the extent
that any Senior Indebtedness of the Company outstanding on the date of
consummation of any such plan of reorganization or readjustment is not paid in
full in cash on such date, either (x) the holders of any such Senior
Indebtedness not so paid in full in cash have consented to the terms of such
plan of reorganization or readjustment or (y) such holders receive securities
which constitute Senior Indebtedness and which have been determined by the
relevant court to constitute satisfaction in full in cash of any Senior
Indebtedness not paid in full in cash, and (b) in the case of debt securities,
such debt securities:


 


(1)                                  are unsecured;


 


(2)                                  have no maturity,
amortization, sinking fund, repayment or similar payment earlier than one year
after the final maturity of all Senior Indebtedness of the Company then
outstanding (as such Senior Indebtedness may be modified pursuant to any such
reorganization or readjustment);


 


(3)                                  do not require the
cash payment of principal, interest or other cash amounts until such time as
all Senior Indebtedness of the Company then outstanding (as such Senior
Indebtedness may be modified pursuant to any such reorganization or
readjustment) has been paid in full in cash or cash equivalents acceptable to
holders of such Senior Indebtedness;


 


(4)                                  shall not be entitled
to the benefits of covenants or defaults materially more beneficial to the
holders of such debt securities than those in effect with respect to the Notes
on the Issue Date (or the Senior Indebtedness, after giving effect to such
reorganization or readjustment); and


 


(5)                                  to the extent that
the same are to be guaranteed, shall only be guaranteed by subsidiaries of the
Company that have guaranteed the Senior Indebtedness of the Company (as such
Senior Indebtedness may be modified pursuant to any such reorganization or
readjustment) and such guarantees shall be subordinated at least to the same
extent as the Note Guarantees are subordinated to the payment of all Senior
Indebtedness of the Subsidiary Guarantors.


 


“Permitted
Liens” means, with respect to any Person:


 


19





















 


(i)  pledges
or deposits by such Person 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 Indebtedness) or
leases to which such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposits of cash or United States
government bonds to secure surety or appeal bonds to which such Person is a
party, or deposits as security for contested taxes or import duties or for the
payment of rent, in each case Incurred in the ordinary course of business;


 


(ii)  Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each
case for sums not yet due or being contested in good faith by appropriate
proceedings or other Liens arising out of judgments or awards against such
Person with respect to which such Person shall then be proceeding with an
appeal or other proceedings for review;


 


(iii)  Liens
for taxes, assessments or other governmental charges not yet due or payable or
subject to penalties for nonpayment or which are being contested in good faith
by appropriate proceedings;


 


(iv)  Liens
in favor of issuers of performance and surety bonds or bid bonds or completion
guarantees or with respect to other regulatory requirements or letters of
credit issued pursuant to the request of and for the account of such Person in
the ordinary course of its business;


 


(v)  minor
survey exceptions, minor encumbrances, easements or reservations of, or rights
of others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as
to the use of real properties or Liens incidental to the conduct of the
business of such Person or to the ownership of its properties which were not
Incurred in connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person;


 


(vi)  Liens
securing Indebtedness permitted to be incurred pursuant to Section 4.03(d);


 


(vii)  Liens
to secure Indebtedness permitted pursuant to Section 4.03(a);


 


(viii)  Liens
existing on the Issue Date;


 


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


 


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


 


20





















 


(xi)  Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing to
the Company or another Restricted Subsidiary permitted to be incurred in
accordance with Section 4.03;


 


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


 


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


 


(xiv)  leases
and subleases of real property which do not materially interfere with the
ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries;


 


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


 


(xvi)  Liens
in favor of the Company;


 


(xvii)  Liens
on equipment of the Company granted in the ordinary course of business to the
Company’s client at which such equipment is located;


 


(xviii)  Liens
encumbering deposits made in the ordinary course of business to secure
obligations arising from statutory, regulatory, contractual or warranty
requirements, including rights of offset and set-off;


 


(xix)  Liens
on the Equity Interests of Unrestricted Subsidiaries securing obligations of
Unrestricted Subsidiaries not otherwise prohibited by this Indenture;


 


(xx)  Liens
to secure Indebtedness permitted by Section 4.03(l); and


 


(xxi)  Liens
to secure any refinancing, refunding, extension, renewal or replacement (or
successive refinancings, refundings, extensions, renewals or replacements) as a
whole, or in part, of any Indebtedness secured by any Lien referred to in the
foregoing clauses (vi), (vii), (viii), (ix), (x), (xi), (xii) and (xx); provided,
however, that (y) such new Lien shall be limited to all or part of the
same property that secured the original Lien (plus improvements on such
property) and (z) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (A) the outstanding principal
amount or, if greater, committed amount of the Indebtedness specified under
clauses (vi), (vii), (viii), (ix), (x), (xi), (xii) or (xx) 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, related to such
refinancing, refunding, extension, renewal or replacement.


 


21





















 


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


 


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


 


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


 


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


 


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


 


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


 


“Sale/Leaseback
Transaction” means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company or such Restricted Subsidiary leases it from such
Person, other than leases between the Company and a Wholly Owned Subsidiary or
between Wholly Owned Subsidiaries.


 


“S&P”
means Standard and Poor’s Ratings Group.


 


“SEC”
means the Securities and Exchange Commission.


 


“Seaport
Capital” means Seaport Capital Partners II, L.P. and
its affiliates.


 


“Secured
Indebtedness” means any Indebtedness of the Company or
any Subsidiary secured by a Lien.


 


“Securities
Offering” means any public or private sale of IDSs or
common stock or Preferred Stock of the Company (other than Disqualified Stock),
other than public offerings with respect to IDSs or the Company’s Common Stock
registered on Form S-8.


 


“Senior
Credit Documents” means the collective reference to
the Credit Agreement, the notes issued pursuant thereto and the guarantees
thereof, and the collateral documents relating thereto.


 


“Senior
Indebtedness” with respect to the Company or any Guarantor
means the Senior Lender Indebtedness and all other Indebtedness of the Company
or such Guarantor, including principal and interest thereon (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or any Subsidiary of the Company at a
rate specified in the applicable Senior Indebtedness, whether or not a claim
for post-filing interest is allowed in such proceeding) and other amounts
(including make-whole payments,


 


22





















 


fees, expenses, reimbursement
obligations under letters of credit and indemnities) owing in respect thereof,
whether outstanding on the Issue Date or thereafter Incurred, unless in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding it is provided that such obligations are not superior, or are
subordinated, in right of payment to the Notes or such Guarantor’s Guarantee,
as applicable; provided, however, that Senior Indebtedness shall
not include, as applicable:


 


(i) any
obligation of the Company to any Subsidiary of the Company or of such Guarantor
to the Company or any other Subsidiary of the Company;


 


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


 


(iii) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including guarantees thereof or instruments evidencing such
liabilities);


 


(iv) any
Indebtedness or obligation of the Company or such Guarantor which is Pari Passu
Indebtedness;


 


(v) any
obligations with respect to any Capital Stock; and


 


(vi) any
Indebtedness Incurred in violation of this Indenture, provided that as to any
such Indebtedness, no such violation shall be deemed to exist for purposes of
this clause if the holder(s) of such Indebtedness or their representative shall
have received an Officers’ Certificate (or representation and warranty) from
the Company to the effect that the incurrence of such Indebtedness does not (or
in the case of revolving credit Indebtedness, that the incurrence of the entire
committed amount thereof at the date on which the initial borrowing thereunder
is made would not) violate this Indenture.


 


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


 


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


 


“Similar
Business” means a business, the majority of whose
revenues are derived from


 


(i)
transmitting, or providing services relating to the transmission of, voice,
video or data through owned or leased wireline, wireless, digital subscriber
line or cable television facilities,


 


23





















 


(ii) the sale
or provision of phone cards, ‘‘800’’ services, voice mail, switching, enhanced
communications services, telephone directory or telephone number information
services or communications network intelligence, or


 


(iii) any
business ancillary or directly related to the businesses referred to in clause
(i) or (ii);


 


provided
that the determination of what constitutes a Similar Business shall be made in
good faith by the Board of Directors.


 


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


 


“Subordinated
Indebtedness” means, any Indebtedness of the Company
or any Guarantor, the instrument under which such Indebtedness is incurred
expressly provides that it is subordinated in right of payment to the Notes or
any Guarantee.


 


“Subsidiary”
means, with respect to any Person:


 


(i)  any
corporation, association or other business entity (other than a partnership,
joint venture or limited liability company) of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time of determination owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person or a combination thereof; and


 


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


 


“TIA”
and “Trust Indenture Act” means
the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the
Issue Date, except as provided in Section 9.04.


 


“Tangible
Assets” means the total consolidated assets of the
Company and its Restricted Subsidiaries (less applicable reserves and other
properly deductible items) after deducting therefrom all goodwill, trade names,
trademarks, patents, purchased technology, unamortized debt discount and other
like intangible assets, as shown on the most recent balance sheet of the
Company.


 


24





















 


“Tax
event” means the receipt by the Company of an opinion
of counsel, rendered by a nationally recognized law firm experienced in such
matters, to the effect that, within 90 days of receipt of the opinion, the
Company is not or would not be, permitted to deduct all or a substantial
portion of the interest payable on the Notes for U.S. federal income tax
purposes as a result of


 


(i) any
amendment to, change in or announced proposed change in the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or


 


(ii) any
official administrative pronouncement (including, without limitation, Notice,
Announcement or Revenue Ruling) or judicial decision interpreting or applying
such laws or regulations,


 


in each case,
which is announced on or after the date on which the IDSs were initially issued
and sold.


 


“Transactions
“ means the transactions occurring in connection with
the consummation of  the sale of IDSs
pursuant to the Underwriting Agreement (the “Offering”), including without
limitation repayment of existing indebtedness, the incurrence of Indebtedness
under the Notes, the Credit Agreement, distribution of proceeds and the Company’s
concurrent acquisition of Mid-Missouri Holding Corp.


 


“Trustee”
means the party named as such in this Indenture until a successor replaces it
and, thereafter, means the successor and if at any time there is more than one
such party, “Trustee” as used with respect to the securities of any series
shall mean the trustee with respect to securities of that series.


 


“Trust
Officer” means


 


(i) any
officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person’s knowledge of and familiarity with the particular
subject, and


 


(ii) who shall
have direct responsibility for the administration of this Indenture.


 


“Unrestricted
Subsidiary” means:


 


(i)  any
Subsidiary of the Company that at the time of determination shall be designated
an Unrestricted Subsidiary by the Board of Directors in the manner provided
below; and


 


(ii)  any
Subsidiary of an Unrestricted Subsidiary.


 


The Board of
Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary of the Company) to be an Unrestricted
Subsidiary


 


25





















 


unless such Subsidiary or any
of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or
holds any Lien on any property of, the Company or any other Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so designated; provided,
however, that the Subsidiary to be so designated and its Subsidiaries do
not at the time of designation have and do not thereafter Incur any
Indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any of its Restricted Subsidiaries; provided  further,
however, that either (a) the Subsidiary to be so designated has total
consolidated assets of $1,000 or less or (b) if such Subsidiary has
consolidated assets greater than $1,000, then such designation would be
permitted under Section 4.04.


 


The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect
to such designation (x)(1) the Company could Incur $1.00 of additional
Indebtedness pursuant to the Leverage Ratio test set forth in Section 4.03 or
(2) the Leverage Ratio for the Company and its Restricted Subsidiaries would be
less than such ratio for the Company and its Restricted Subsidiaries
immediately prior to such designation, in each case on a pro forma basis taking
into account such designation, and (y) no Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced
to the Trustee by promptly filing with the Trustee a copy of the resolution of
the Board of Directors giving effect to such designation and an Officers’
Certificate certifying that such designation complied with the foregoing provisions.


 


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


 


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


 


“Weighted
Average Life to Maturity” means, when applied to any
Indebtedness or Disqualified Stock, as the case may be, at any date, the
quotient obtained by dividing (i) the sum of the products of the number of
years from the date of determination to the date of each successive scheduled
principal payment of such Indebtedness or redemption or similar payment with
respect to such Disqualified Stock multiplied by the amount of such payment, by
(ii) the sum of all such payments.


 


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


 


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


 


26





















 


SECTION 1.02.      Other
Definitions.


 


	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Additional Notes”

  	
   

  	
  2.01

  
	
  “Affiliate Transaction”

  	
   

  	
  4.07

  
	
  “Agent Members”

  	
   

  	
  2.02

  
	
  “Asset Sale Offer”

  	
   

  	
  4.06

  
	
  “Automatic Exchange”

  	
   

  	
  4.14

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	
  “Blockage Notice”

  	
   

  	
  10.03

  
	
  “Calculation Date”

  	
   

  	
  1.01 in “Leverage Coverage Ratio”

  
	
  “Change of Control Offer”

  	
   

  	
  4.09

  
	
  “covenant defeasance option”

  	
   

  	
  8.02

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Deferred Interest”

  	
   

  	
  4.01

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Excess Proceeds”

  	
   

  	
  4.06

  
	
  “Global Note”

  	
   

  	
  2.02(a)

  
	
  “Global Note Custodian”

  	
   

  	
  2.02(b)

  
	
  “Guarantee Blockage Notice”

  	
   

  	
  12.03

  
	
  “Guarantee Payment Blockage Period”

  	
   

  	
  12.03

  
	
  “Guaranteed Obligations”

  	
   

  	
  11.01

  
	
  “Initial Lien”

  	
   

  	
  4.08

  
	
  “judgment default provision”

  	
   

  	
  6.01

  
	
  “legal defeasance option”

  	
   

  	
  8.02

  
	
  “Legal Holiday”

  	
   

  	
  13.08

  
	
  “Notice of Default”

  	
   

  	
  6.01

  
	
  “Offer Period”

  	
   

  	
  4.06

  
	
  “Offering “

  	
   

  	
  1.01 in “Transactions”

  
	
  “Original Notes”

  	
   

  	
  Preamble

  
	
  “pay its Guarantee”

  	
   

  	
  12.03

  
	
  “pay the Notes”

  	
   

  	
  10.03

  
	
  “Paying Agent”

  	
   

  	
  2.04

  
	
  “Payment Blockage Period”

  	
   

  	
  10.03

  
	
  “Physical Notes”

  	
   

  	
  2.02

  
	
  “Redemption Date”

  	
   

  	
  3.07

  
	
  “Refinancing Indebtedness”

  	
   

  	
  4.03

  
	
  “Refunding Capital Stock”

  	
   

  	
  4.04

  
	
  “Registrar”

  	
   

  	
  2.04

  
	
  “Restricted Payments”

  	
   

  	
  4.04

  
	
  “Retired Capital Stock”

  	
   

  	
  4.04

  
	
  “SEC Reports”

  	
   

  	
  4.02

  
	
  “Successor Guarantor”

  	
   

  	
  5.01

  
	
  “Successor Company”

  	
   

  	
  5.01

  
	
  “Trustee Reports”

  	
   

  	
  4.02

  



 


27





















 


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 Notes and the Guarantees.


 


“indenture
security holder” means a Holder.


 


“indenture to
be qualified” means this Indenture.


 


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


 


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


 


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


 


If any
provision hereof limits, qualifies or conflicts with a provision of the TIA
that is required under the TIA to be a part of and govern this Indenture, the
latter provision shall control.  If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed (i) to
apply to this Indenture as so modified or (ii) to be excluded, as the case may
be.


 


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


 


(1)           all “dollars” are in U.S. dollars,
unless otherwise stated;


 


(2)           a term defined in this Indenture has
the meaning assigned to it in this Indenture;


 


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


 


(4)           “or” is not exclusive;


 


(5)           “including” means including without
limitation;


 


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


 


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


 


28





















 


(8)           any reference to a Section or Article
refers to such Section or Article of this Indenture.


 


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


 


(10)         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 Company thereof dated
such date prepared in accordance with GAAP;


 


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


 


ARTICLE 2


 


THE NOTES


 


SECTION 2.01.      The
Notes; Amount Unlimited.  There is
hereby established a series of Notes to be issued under this Indenture, which
are designated as the Company’s “13%
Senior Surbordinated Note due 2019.”


 


The aggregate
principal amount of Notes which may be authenticated and delivered under this
Indenture is unlimited.  The Original
Notes shall be issued in an aggregate principal amount of $81,075,497.50.  Any additional 13% senior subordinated notes
of the Company issued after the date of this Indenture (“Additional Notes”) shall
be part of the same series as the Original Notes, and shall have substantially
identical terms and conditions as the Original Notes and will be guaranteed by
the Guarantors on the same basis as the Original Notes.


 


With respect
to any Additional Notes issued after the Issue Date, they shall be
(i) established in or pursuant to a resolution of the Board of Directors
and (ii) (A) set forth or determined in the manner provided in an Officers’
Certificate or (B) established in one or more supplemental indentures hereto,
prior to the issuance of such Additional Notes.


 


Additional
Notes shall be issued with substantially identical terms as the Original Notes
set forth in this Indenture except for any variation in issuance date and, upon
the issuance of Additional Notes with original issue discount (and any issuance
of Additional Notes thereafter), CUSIP number. If any of the terms of any
Additional Notes are established by action taken pursuant to a resolution of
the Board of Directors, a copy of an appropriate record of such action shall be
certified by the Secretary or any Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers’
Certificate or the indenture supplemental hereto setting forth the terms of the
Additional Notes.


 


The Company
shall only be entitled to issue Additional Notes in compliance with Section
4.14.


 


29





















 


As long as any
Notes are outstanding, any Holder of Notes and shares of Class A common stock
may, at any time and from time to time, combine these securities to form IDSs
unless the IDSs have previously been automatically separated as a result of the
continuance of a payment default on the Notes for 90 days, or the redemption or
maturity of any Notes.


 


SECTION 2.02.      Form
and Dating.  (a)  General.  The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture; provided
that any Additional Notes may have such applicable revisions to the form set
forth in Exhibit A hereto as are necessary to reflect the terms of such
Additional Notes established pursuant to Section 2.01.  In addition, the Notes may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company or any Guarantor is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the
Company).  Each Note shall be dated the
date of its authentication.  The Notes
shall be issuable only in registered form without interest coupons.


 


The terms and
provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and the Company, the Guarantors and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby. 
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.


 


(b)  Global Notes.  Notes offered and sold pursuant to this
Indenture shall, unless the Company otherwise notifies the Trustee in writing,
be issued in the form of one or more permanent global Notes in definitive, fully registered form in substantially
the form set forth in Exhibit A (each, a “Global Note”).  The aggregate principal amount of a Global
Note may from time to time be increased or decreased by adjustments made on the
records of the Registrar or the Depository or Wells Fargo Bank, National
Association, as Global Note custodian (the “Global Note Custodian”), as
applicable, as hereinafter provided.


 


(c)  Book-Entry Provisions.  This Section 2.02(c) shall apply only to a
Global Note deposited with or on behalf of the Depository or the Global Note
Custodian, as applicable.


 


The Company
shall execute and the Trustee shall, in accordance with this Section 2.02(c)
and pursuant to a written order of the Company signed by one or more Officers,
authenticate and deliver initially one or more Global Notes that (a) shall be
registered in the name of the Depository or Global Note Custodian, as
applicable for such Global Note or Global Notes or the nominee of such
Depository or Global Note Custodian and (b) shall be delivered by the Trustee
to such Depository or Global Note Custodian or pursuant to such Depository’s or
Global Note Custodian’s instructions or held by the Trustee as Notes Custodian.


 


Members of, or
participants in, the Depository or the Global Note Custodian, as applicable (“Agent
Members”), shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depository or the Global Note Custodian, as
applicable, or by the Trustee as Notes Custodian or under such Global Note, and
the Depository or the Global Note Custodian, as applicable, may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Note for all purposes


 


30





















 


whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or the Global Note
Custodian, as applicable, or impair, as between the Depository or the Global
Note Custodian, as applicable, and its Agent Members, the operation of
customary practices of such Depository or Global Note Custodian governing the
exercise of the rights of a holder of a beneficial interest in any Global Note.


 


(d)  Global Note Legends.  Each Global Note shall bear one of the
following legends or such other legends as may be required by the Depository or
the Global Note Custodian, as applicable, from time to time:


 


Depository
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 NOTE 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 NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.


 


THE COMPANY
MAY SUBSEQUENTLY ISSUE NOTES THAT ARE IDENTICAL IN ALL MATERIAL RESPECTS TO
THIS NOTE BUT HAVE ORIGINAL ISSUE DISCOUNT. 
IN SUCH CASE, THE HOLDER OF THIS NOTE WILL EXCHANGE A PORTION OF HIS
NOTES FOR SUCH NEWLY ISSUED NOTES WITH ORIGINAL ISSUE DISCOUNT.  THE AGGREGATE PRINCIPAL AMOUNT OF NOTES OWNED
BY SUCH HOLDER, HOWEVER, WILL NOT CHANGE AS A RESULT OF SUCH EXCHANGE.  AFTER ISSUANCE OF ANY SUCH NOTES WITH
ORIGINAL DISCOUNT, A HOLDER MAY OBTAIN THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
THE ISSUE DATE, THE ISSUE PRICE AND THE YIELD TO MATURITY BY SUBMITTING A
WRITTEN REQUEST TO THE COMPANY AT 505 THIRD AVENUE EAST, ONEONTA, ALABAMA
35121, ATTN:  CHIEF FINANCIAL OFFICER.


 


31





















 


Global Note
Custodian Legend


 


UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF WELLS FARGO BANK,
NATIONAL ASSOCIATION (“WELLS FARGO”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF WELLS FARGO OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF WELLS FARGO (AND ANY PAYMENT IS MADE TO WELLS
FARGO OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF WELLS FARGO), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, WELLS FARGO, HAS AN INTEREST HEREIN.


 


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


 


THE COMPANY
MAY SUBSEQUENTLY ISSUE NOTES THAT ARE IDENTICAL IN ALL MATERIAL RESPECTS TO
THIS NOTE BUT HAVE ORIGINAL ISSUE DISCOUNT. 
IN SUCH CASE, THE HOLDER OF THIS NOTE WILL EXCHANGE A PORTION OF HIS
NOTES FOR SUCH NEWLY ISSUED NOTES WITH ORIGINAL ISSUE DISCOUNT.  THE AGGREGATE PRINCIPAL AMOUNT OF NOTES OWNED
BY SUCH HOLDER, HOWEVER, WILL NOT CHANGE AS A RESULT OF SUCH EXCHANGE.  AFTER ISSUANCE OF ANY SUCH NOTES WITH
ORIGINAL DISCOUNT, A HOLDER MAY OBTAIN THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
THE ISSUE DATE, THE ISSUE PRICE AND THE YIELD TO MATURITY BY SUBMITTING A
WRITTEN REQUEST TO THE COMPANY AT 505 THIRD AVENUE EAST, ONEONTA, ALABAMA
35121, ATTN:  CHIEF FINANCIAL OFFICER.


 


In addition,
the Notes may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company or any Guarantor is subject, if
any, or usage (provided that any such notation, legend or endorsement is
in a form acceptable to the Company).


 


(e)  Physical Notes; Legend.  Notes offered and sold pursuant to this
Indenture shall be in the form of physical certificated Notes in definitive,
fully registered form  (“Physical Notes”)
in substantially the form set forth in Exhibit B if the Company so
instructs the Trustee in writing. Notwithstanding the foregoing, however,
except as provided in Section 2.07 or 2.08, owners of beneficial interests in
Global Notes will not be entitled to receive Physical Notes. Each Physical Note
shall bear the following legend:


 


THE COMPANY
MAY SUBSEQUENTLY ISSUE NOTES THAT ARE IDENTICAL IN ALL MATERIAL RESPECTS TO
THIS NOTE BUT HAVE ORIGINAL ISSUE DISCOUNT. 
IN SUCH CASE, THE HOLDER OF THIS NOTE WILL EXCHANGE A PORTION OF HIS
NOTES FOR SUCH NEWLY ISSUED NOTES WITH ORIGINAL ISSUE


 


32





















 


DISCOUNT.  THE AGGREGATE PRINCIPAL AMOUNT OF NOTES OWNED
BY SUCH HOLDER, HOWEVER, WILL NOT CHANGE AS A RESULT OF SUCH EXCHANGE AND THE
RESTRICTIONS ON TRANSFER SET FORTH IN THE IMMEDIATELY PRECEDING PARAGRAPH WILL
CONTINUE TO APPLY TO SUCH HOLDER FOLLOWING SUCH EXCHANGE.  AFTER ISSUANCE OF ANY SUCH NOTES WITH
ORIGINAL DISCOUNT, A HOLDER MAY OBTAIN THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
THE ISSUE DATE, THE ISSUE PRICE AND THE YIELD TO MATURITY BY SUBMITTING A
WRITTEN REQUEST TO THE COMPANY AT 505 THIRD AVENUE EAST, ONEONTA, ALABAMA
35121, ATTN:  CHIEF FINANCIAL OFFICER.


 


In addition,
the Notes may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company or any Guarantor is subject, if
any, or usage (provided that any such notation, legend or endorsement is
in a form acceptable to the Company).


 


SECTION 2.03.      Execution
and Authentication.  One or more
Officers shall sign the Notes for the Company by manual or facsimile
signature.  If an Officer whose signature
is on a Note no longer holds that office at the time the Trustee authenticates
the Note, the Note shall be valid nevertheless.


 


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


 


The Trustee
shall authenticate and make available for delivery upon a written order of the
Company signed by one Officer, (1) Original Notes for original issue on the
date hereof in an aggregate principal amount of up to $81,075,497.50, and (2)
subject to the terms of this Indenture, Additional Notes in an unlimited
aggregate principal amount.  Such order
shall specify the amount of Notes to be authenticated, the date on which the
original issue of Notes is to be authenticated and whether the Notes are to be Original
Notes or Additional Notes.


 


The Trustee
may appoint an authenticating agent reasonably acceptable to the Company to
authenticate the Notes.  Any such
appointment shall be evidenced by an instrument signed by a Trust Officer, a
copy of which shall be furnished to the Company.  Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes 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 where Notes may be presented for registration of
transfer or for exchange (the “Registrar”) and an office or agency where Notes
may be presented for payment (the “Paying Agent”).  The Registrar shall keep a register of the
Notes and of their transfer and exchange. 
The Company may appoint one or more co-registrars and one or more additional
paying agents.  The term “Paying Agent”
includes any additional paying agent, and the term “Registrar” includes any


 


33





















 


co-registrars.  The Company initially appoints the Trustee as
(i) Registrar and Paying Agent in connection with the Notes and (ii) the Notes
Custodian with respect to the Global Notes.


 


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 Subsidiaries may
act as Paying Agent or Registrar.


 


The Company
may remove any Registrar or Paying Agent upon written notice to such Registrar
or Paying Agent and to the Trustee; provided, however, that no
such removal shall become effective until (1) acceptance of an appointment by a
successor agent as evidenced by an appropriate agreement entered into by the
Company and such successor Registrar or Paying Agent, as the case may be, and
delivered to the Trustee or (2) notification to the Trustee that the Trustee
shall serve as Registrar or Paying Agent until the appointment of a successor
in accordance with clause (1) above.  The
Registrar or Paying Agent may resign at any time upon written notice; provided,
however, that the Trustee may resign as Paying Agent or Registrar only
if the Trustee also resigns as Trustee in accordance with Section 7.08.


 


SECTION 2.05.      Paying
Agent To Hold Money in Trust.  On or
prior to each due date of the principal and interest on any Note, the Company
shall deposit with the Paying Agent (or if the Company or a Subsidiary is
acting as Paying Agent, segregate and hold in trust for the benefit of the
Persons entitled thereto) a sum (in U.S. dollars only) sufficient to pay such
principal and interest when due.  The
Company shall require each Paying Agent (other than the Trustee and except as
set forth in the next sentence) 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 Notes and shall
notify the Trustee of any default by the Company in making any such payment.  If the Company or a Subsidiary of the Company
acts as Paying Agent, it shall segregate the money held by it as Paying Agent
and hold it as a separate trust fund. 
The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying
Agent.  Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.  Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.


 


SECTION 2.06.      Holders
Lists.  The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Holders. 
If the Trustee is not the Registrar, the Company shall furnish, or cause
the Registrar to furnish, to the Trustee, in writing at least seven 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.      Transfer
and Exchange.  The Notes shall be
issued in registered form and shall be transferable only upon the surrender of
a Note for registration of transfer and in compliance with this
Section 2.07.  When a Note is
presented to the Registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section
8-401(a)(1) of the Uniform Commercial Code are met.  When Notes are presented to the Registrar
with a request to exchange them for an equal principal amount of Notes of other


 


34





















 


denominations, the Registrar
shall make the exchange as requested if the same requirements are met.  To permit registration of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate Notes
upon the Company’s order or at the Registrar’s request.  The Company shall not be required to make and
the Registrar need not register transfers or exchanges of Notes (i) selected
for redemption (except, in the case of a Note to be redeemed in part, the
portion of the Note not to be redeemed), (ii) during a period beginning at the
opening of business 15 days prior to a selection of Notes to be redeemed and
ending on the relevant Redemption Date, 
(iii) tendered in a Change of Control Offer or Asset Sale Offer or (iv)
during a period beginning on the opening of business 15 days before a record date
for the payment of interest and ending on the applicable succeeding interest
payment date.


 


(a)  Transfer and Exchange of Physical Notes.  When Physical Notes are presented to the
Registrar with a request to register the transfer of such Physical Notes or to
exchange such Physical Notes for an equal principal amount of Physical Notes of
other authorized denominations, the Registrar shall register the transfer or
make the exchange as requested if its reasonable requirements for such
transaction are met; provided, however, that the Physical Notes surrendered for
transfer or exchange:


 


(i)            shall be duly endorsed or
accompanied by a written instrument of transfer in form reasonably satisfactory
to the Company and the Registrar, duly executed by the Holder thereof or such
Holder’s attorney duly authorized in writing; and


 


(ii)           are accompanied by the following
additional information and documents, as applicable:


 


(A)  if such Physical Notes are being delivered to
the Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect (in the form set
forth on the reverse side of the Note); or


 


(B)  if such Physical Notes are being transferred
to the Company, a certification to that effect (in the form set forth on the
reverse side of the Note).


 


(b)  Restrictions on Transfer of a Physical
Note for a Beneficial Interest in a Global Note. Other than pursuant to an
Automatic Exchange in compliance with Section 4.14, a Physical Note may not be
exchanged for a beneficial interest in a Global Note except upon satisfaction
of the requirements set forth below. Upon receipt by the Trustee of a Physical
Note, duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Registrar, together with written
instructions directing the Trustee to make, or to direct the Notes Custodian to
make, an adjustment on its books and records with respect to such Global Note
to reflect an increase in the aggregate principal amount of the Notes
represented by the Global Note, such instructions to contain information
regarding the Depository account or Global Note Custodian account, as
applicable, to be credited with such increase, then the Trustee shall cancel
such Physical Note and cause, or direct the Notes Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depository or Global Note Custodian, as applicable, and the Notes Custodian,
the aggregate principal amount of Notes represented by the Global Note to be
increased by the aggregate principal amount of the Physical Note to be
exchanged and shall credit or cause to be credited to


 


35





















 


the account of
the Person specified in such instructions a beneficial interest in the Global
Note equal to the principal amount of the Physical Note so canceled.  If no Global Notes are then outstanding and
the Global Note has not been previously exchanged for Physical Notes pursuant
to Section 2.08, the Company shall issue and the Trustee shall authenticate,
upon written order of one or more officers of the Company, a new Global Note in
the appropriate principal amount.


 


(c)  Transfer and Exchange of Global Notes.


 


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


 


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


 


(iii)          Notwithstanding any other provisions
of this Article 2 (other than the provisions set forth in Section 2.08), a
Global Note may not be transferred as a whole except by the Depository (or
Global Note Custodian, as applicable) to a nominee of the Depository (or Global
Note Custodian, as applicable) or by a nominee of the Depository (or Global
Note Custodian, as applicable) to the Depository (or Global Note Custodian, as
applicable) or another nominee of the Depository (or Global Note Custodian, as
applicable) or by the Depository (or Global Note Custodian, as applicable) or
any such nominee to a successor Depository (or Global Note Custodian, as
applicable) or a nominee of such successor Depository (or Global Note
Custodian, as applicable).


 


(d)  Cancellation or Adjustment of Global Notes.  At such time as all beneficial interests in a
Global Note have either been exchanged for Physical Notes (other than pursuant
to an Automatic Exchange in compliance with Section 4.14), transferred,
redeemed, repurchased or canceled, such Global Note shall be returned by the
Depository (or Global Note Custodian, as applicable) to the Trustee for
cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for
Physical Notes (other than pursuant to an Automatic Exchange in compliance with
Section 4.14), transferred in exchange for an interest in another Global Note,
redeemed, repurchased or canceled, the principal amount of Notes represented by
such Global Note shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Notes


 


36





















 


Custodian for
such Global Note) with respect to such Global Note, by the Trustee or the Notes
Custodian, to reflect such reduction.


 


(e)  Obligations with Respect to Transfers and
Exchanges of Notes.  (i)  To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate,
Physical Notes and Global Notes at the Registrar’s request.


 


(ii)           No service charge shall be made for
any registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this
Indenture).


 


(iii)          The Company, the Trustee, the Paying
Agent or the Registrar may deem and treat the person in whose name a Note is
registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest, if any, on such Note and for all other
purposes whatsoever, whether or not such Note is overdue, and none of the
Company, the Trustee, the Paying Agent or the Registrar shall be affected by
notice to the contrary. All such payments so made to any such Person, or upon
such Person’s order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any Note.


 


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


 


SECTION 2.08.      Physical
Notes.


 


(a)           A Global Note deposited with the
Depository (or Global Note Custodian, as applicable) or with the Trustee as
Notes Custodian pursuant to Section 2.02 shall be transferred to the beneficial
owners thereof in the form of Physical Notes in an aggregate principal amount
equal to the principal amount of such Global Note, in exchange for such Global
Note, only if such transfer complies with Section 2.07 and (i) the Depository
(or Global Note Custodian, as applicable) notifies the Company that it is
unwilling or unable to continue as a Depository (or Global Note Custodian, as
applicable) for such Global Note or if at any time the Depository (or Global
Note Custodian, as applicable) ceases to be a “clearing agency” registered
under the Exchange Act, and the Company is unable to find a successor
depositary or (ii) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Physical Notes under this
Indenture.


 


(b)           Any Global Note that is transferable
to the beneficial owners thereof pursuant to this Section 2.08 shall be
surrendered by the Depository (or Global Note Custodian, as applicable) to the
Trustee, to be so transferred, in whole or from time to time in part, without charge,
and the Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations. Any portion of a Global Note transferred
pursuant to this Section shall be registered in such names as the Depository
(or Global Note Custodian, as applicable) shall direct.


 


37





















 


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


 


(d)           In the event of the occurrence of any
of the events specified in Section 2.08(a)(i), (ii) or (iii), the Company will
promptly make available to the Trustee a reasonable supply of Physical Notes in
fully registered form without interest coupons.


 


SECTION 2.09.      Replacement
Notes.  If a mutilated Note is
surrendered to the Registrar or if the Holder of a Note claims that the Note
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Note if the requirements of Section
8-405 of the Uniform Commercial Code are met, including that the Holder (i)
satisfies the Company or the Trustee within a reasonable time after such Holder
has notice of such loss, destruction or wrongful taking and the Registrar does
not register a transfer prior to receiving such notification, (ii) makes such
request to the Company or the Trustee prior to the Note being acquired by a
protected purchaser as defined in Section 8-303 of the Uniform Commercial Code,
(iii) if required by the Trustee or the Company, furnish an indemnity bond
sufficient in the judgment of the Trustee to protect the Company, the Trustee,
the Paying Agent and the Registrar from any loss that any of them may suffer if
a Note is replaced and (iv) satisfies any other reasonable requirements of
the Trustee.  In the event any such
mutilated, lost, destroyed or wrongfully taken Note has become or is about to
become due and payable, the Company in its discretion may pay such Note instead
of issuing a new Note in replacement thereof.


 


Upon the issuance
of any new Note under this Section 2.09, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith.


 


Every
replacement Note is an additional obligation of the Company.


 


The provisions
of this Section 2.09 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of
mutilated, lost, destroyed or wrongfully taken Notes.


 


SECTION 2.10.      Outstanding
Notes.  Notes outstanding at any time
are all Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation and those specified in this Section as
not outstanding.  Subject to Section
13.06, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.


 


If a Note is
replaced pursuant to Section 2.09, it ceases to be outstanding.


 


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 Notes (or portions thereof)
to be redeemed or maturing, as the case may be, and the Paying Agent is not
prohibited from paying such money to the Holders on that


 


38





















 


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


 


SECTION 2.11.      Temporary
Notes.  In the event that Physical
Notes are to be issued under the terms of this Indenture, until such Physical
Notes are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Notes.  Temporary
Notes shall be substantially in the form of Physical Notes but may have
variations that the Company considers appropriate for temporary Notes.  Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate Physical Notes and deliver them in
exchange for temporary Notes upon surrender of such temporary Notes at the
office or agency of the Company, without charge to the Holder.


 


SECTION 2.12.      Cancellation.  The Company at any time may deliver Notes to
the Trustee for cancellation.  The
Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment or
cancellation and deliver proof of canceled Notes to the Company pursuant to
written direction by an Officer.  The
Company may not issue new Notes to replace Notes it has redeemed or paid.  The Trustee shall not authenticate Notes in
place of cancelled Notes other than pursuant to the terms of this Indenture.


 


SECTION 2.13.      CUSIP
Numbers.  The Company in issuing the
Notes 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, however, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers.  Additional
Notes may have a different CUSIP number than the Original Notes (which will
occur in connection with an issuance of Additional Notes with original issue
discount and any issuance of Additional Notes thereafter) and be part of the
same series as the Original Notes having identical terms, conditions and
entitlements.  The Company, upon becoming
aware, through written notice, of any change in such “CUSIP” numbers, shall
promptly notify the Trustee of such change.


 


SECTION 2.14.      Tax
Treatment.  The Company agrees, and by
acceptance of beneficial ownership interest in the Notes each beneficial owner
of Notes shall be deemed to have agreed, (1) to treat itself as owner of the
Notes for all purposes, including the preparation and filing of any United
States federal, state, local or foreign tax return, report, or other
information; (2) to treat the Notes as indebtedness for all tax purposes and
(3) to treat the acquisition of an IDS as the acquisition of the Notes and
Class A Common Stock which are represented by the IDS and to allocate the
purchase price of the IDS between the Notes and the Class A Common Stock in the
proportions set forth in paragraph 23 of the Notes.


 


39





















 


SECTION 2.15.      Maturity.  The Notes shall mature on December 30, 2019
unless redeemed earlier pursuant to Article 3 of this Indenture.


 


ARTICLE 3


 


REDEMPTION


 


SECTION 3.01.      Notices
to Trustee.  If the Company elects to
redeem Notes pursuant to Section 3.07, it shall notify the Trustee in writing
of the Redemption Date and the principal amount of Notes to be redeemed.


 


The Company
shall give each notice to the Trustee provided for in this Section at least 30
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
shall comply with the conditions herein. 
Any such notice may be canceled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.


 


SECTION 3.02.      Selection
of Notes to be Redeemed.  In the case
of any partial redemption, selection of Notes for redemption shall be made by
the Trustee not more than 60 days prior to the Redemption Date in compliance
with the requirements of the principal national securities exchange, if any, on
which such Notes of any series are listed, or if such Notes of such series are
not so listed, on a pro rata
basis, by lot or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal
requirements).  If any Note is to be
redeemed in part only, the notice of redemption relating to such Note shall
state the portion of the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof shall be issued in the
name of the Holder thereof upon cancellation of the original Note.


 


SECTION 3.03.      Notice
of Redemption.  At least 30 days but
not more than 60 days before the Redemption Date, the Company, or the Trustee
at the Company’s direction, shall mail a notice of redemption by first-class
mail to each Holder of Notes to be redeemed at such Holder’s registered
address; provided that in the event the Trustee is to mail such notice, the
Company shall deliver to the Trustee, at least 30 days prior to the Redemption
Date  (unless the Trustee consents to a
shorter period), an Officer’s Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as
provided below.


 


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


 


(1)  the Redemption Date;


 


(2)  the redemption price and the amount of
accrued and unpaid interest to the Redemption Date


 


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


 


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


 


40





















 


(5)  that on the Redemption Date, the redemption
price will become due and payable upon each such Note, and, unless the Company
defaults in making such redemption payment or the Paying Agent is prohibited
from making such payment pursuant to the terms of this Indenture, interest on
Notes (or portion thereof) called for redemption ceases to accrue on and after
the Redemption Date;


 


(6)  the CUSIP number, if any, printed on the
Notes being redeemed; 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 Notes.


 


The Company
may provide in such notice that payment of the redemption price and the
performance of the Company’s obligations with respect to such redemption may be
performed by another Person.


 


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


 


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, along with a
form of the notice, required by this Section.


 


SECTION 3.04.      Effect
of Notice of Redemption.  Once notice
of redemption is mailed, Notes 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
Notes shall be paid at the redemption price stated in the notice, plus accrued
and unpaid interest, if any, to the Redemption Date; provided, however,
that if the Redemption Date is after a regular record date and on or prior to
the interest payment date, the accrued interest shall be payable to the Holder
of the redeemed Notes registered on the relevant record date.


 


SECTION 3.05.      Deposit
of Redemption Price.  Prior to 10:00
a.m., New York City time, on the Redemption Date, the Company shall deposit
with the Paying Agent (or, if the Company or a Subsidiary is acting as the
Paying Agent, the Company or such Subsidiary shall segregate and hold in trust)
money (in U.S. dollars) sufficient to pay the redemption price of and accrued
and unpaid interest, if any, on all Notes to be redeemed on that date other
than Notes or portions of Notes called for redemption that have been delivered
by the Company to the Trustee for cancellation.


 


On and after
the Redemption Date, unless the Company defaults in payment of the redemption
price, interest shall cease to accrue on Notes or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent funds (in
U.S. dollars) sufficient to pay the principal of, plus accrued and unpaid
interest (if any) on, the Notes to be redeemed, whether or not such Notes are
presented for payment, and the only right of the Holders of such Notes (or
portions thereof) will be to receive payment of the redemption price


 


41





















 


and subject to the next
succeeding sentence, any accrued and unpaid interest on such Notes (or portions
thereof) to the Redemption Date.  If any
Note (or portion thereof) called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Note (or portion thereof).


 


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


 


SECTION 3.07.      Redemption of Notes.  The Company may, at its option, redeem all,
but not less than all, of the Notes at any time upon not less than 30 nor more
than 60 days’ prior notice, at a redemption price equal to 100% of the
principal amount of the Notes plus accrued and unpaid interest to the
redemption date, upon the occurrence of a Tax event.


 


Except as set
forth in the preceding paragraph, the Company may not redeem Notes at its
option prior to December 30, 2011.


 


At any time
and from time to time on or after December 30, 2011, the Notes shall be
redeemable, at the Company’s option, in whole or in part for cash at the
following redemption prices (expressed as a percentage of principal amount),
plus accrued and unpaid interest on the Notes redeemed, to the relevant
Redemption Date, if redeemed during the 12-month period commencing on December
30 of the years set forth below:


 




	
  Period

  	
   

  	
  Redemption

  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2011

  	
   

  	
  106.500

  	
  %

  
	
  2012

  	
   

  	
  105.200

  	
  %

  
	
  2013

  	
   

  	
  103.900

  	
  %

  
	
  2014

  	
   

  	
  102.600

  	
  %

  
	
  2015

  	
   

  	
  101.300

  	
  %

  
	
  2016 and thereafter

  	
   

  	
  100.000

  	
  %

  






 


SECTION 3.08.      Automatic
Separation of IDSs.  A full or
partial redemption of the Notes will result in an automatic separation of the
IDSs.


 


ARTICLE 4


 


COVENANTS


 


SECTION 4.01.      Payment
of Notes; Interest Deferral.  The
Company shall pay the principal of and interest on the Notes on the dates and
in the manner provided in the Notes and in this Indenture.  Principal and interest shall be considered
paid on the date due if on such date the


 


42





















 


Trustee or the Paying Agent
holds in accordance with this Indenture money sufficient to pay all principal
and interest then due and the Trustee or the Paying Agent, as the case may be,
is not prohibited from paying such money to the Holders on that date pursuant
to the terms of this Indenture.  Prior to
December 30, 2009, the Company may, at its election, defer interest payments on
the Notes on one or more occasions for not more than eight quarters in the
aggregate (any such period, an “Initial Interest Deferral Period”); provided
that (1) at the end of each occasion, the Company will be obligated to resume
quarterly payments of interest on the Notes including interest on deferred
interest; and (2) no later than December 30, 2009, the Company must pay in full
all deferred interest, together with accrued interest thereon.


 


After December
30, 2009 the Company may, at its election, defer interest payments on the Notes
on up to four occasions with respect to up to two quarters per occasion (each
such occasion together with the Initial Interest Deferral Period, an “Interest
Deferral Period”); provided that (1) the Company may not defer interest
on any occasion after December 30, 2009 unless and until all interest deferred
on any prior occasion, together with accrued interest thereon, has been paid in
full; (2) at the end of each occasion, the Company will be obligated to resume
quarterly payments of interest on the Notes including interest on deferred
interest; and (3) no later than December 30, 2019, the Company must pay all
deferred interest, together with accrued interest thereon.


 


On each
occasion that the Company elects to defer interest, it will be required to
deliver to the Trustee a copy of a resolution of the Company’s Board of
Directors to the effect that, based upon a good-faith determination of the
Company’s Board of Directors, (x) such interest deferral is reasonably
necessary for bona-fide cash management purposes, whether indicated by cumulative
distributable cash shortfall or otherwise, or to reduce the
likelihood of or avoid a payment default under any Designated Senior
Indebtedness or (y) as long as the Credit Agreement remains in effect,
the Company has failed
to maintain a fixed charge coverage ratio of at least 1.15:1:00 or a senior
leverage ratio of not more than 3.20 to 1.00, in each case, as calculated in accordance with
the provisions contained in the Credit Agreement as of the date hereof, irrespective
of any subsequent changes to the Credit Agreement. However, no interest deferral
may be commenced, and any on-going deferral shall cease, if (1) a default in
payment of interest, principal or premium, if any, on the Notes has occurred
and is continuing; or (2) another Event of Default with respect to the Notes
has occurred and is continuing and the Notes have been accelerated as a result
of the occurrence of such Event of Default.


 


Deferred
interest on the Notes will bear interest at the same rate as the stated rate of
interest applicable to the Notes, compounded quarterly, until paid in full.


 


SECTION 4.02.      Reports
and Other Information  The Company
shall file with the Trustee, within 15 days after it files such annual and
quarterly reports, information, documents and other reports with the
Commission, copies of its annual report and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) which the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act (the ‘‘SEC Reports’’). If at any time the Company is not subject
to Section 13 or 15(d) of the Exchange Act, the Company shall provide reports
containing substantially the same information as that contained in the SEC
Reports (the ‘‘Trustee Reports’’), such Trustee Reports to be provided at the
same times the


 


43





















 


Company would have been
required to provide the SEC Reports to the Trustee pursuant to the immediately
preceding sentence had it then been subject to Section 13 or 15(d) of the
Exchange Act, provided that the Trustee Reports need not include any
certifications from officers of the Company.


 


SECTION 4.03.      Limitations
on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock.  The Company (i) shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue
any shares of Disqualified Stock, and (ii) shall not permit any of its
Restricted Subsidiaries to issue any shares of Preferred Stock; provided,
however, that the Company and any Restricted Subsidiary may Incur
Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified
Stock and any Restricted Subsidiary may issue shares of Preferred Stock if the
Leverage Ratio of the Company for the most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is Incurred or such
Disqualified Stock or Preferred Stock is issued would have been no greater than
6.25 to 1.00 determined on a pro forma basis (including a pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the
case may be, and the application of proceeds therefrom had occurred at the
beginning of such four-quarter period.


 


The foregoing
limitations shall not apply to:


 


(a)  the Incurrence by the Company or its
Restricted Subsidiaries of Indebtedness under the Senior Credit Documents and
any related guarantees and the issuance and creation of letters of credit and
bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances
being deemed to have a principal amount equal to the face amount thereof) up to
an aggregate principal amount of $100.0 million outstanding at any one time;


 


(b)  the Incurrence by the Company and the
Guarantors of Indebtedness represented by the Notes (excluding Additional
Notes), and the Guarantees, as applicable;


 


(c)  Indebtedness existing on the date of this
Indenture (other than Indebtedness specified in clauses (a) and (b));


 


(d)  Indebtedness (including Capitalized Lease
Obligations) Incurred by the Company or any of its Restricted Subsidiaries to
finance the purchase, lease or improvement of property (real or personal) or
equipment (whether through the direct purchase of assets or the Capital Stock
of any Person owning such assets) in an aggregate principal amount which, when
aggregated with the principal amount of all other Indebtedness then outstanding
and Incurred pursuant to this clause (d) and all Refinancing Indebtedness (as
defined below) Incurred to refund, refinance or replace any Indebtedness
Incurred pursuant to this clause (d), does not exceed the greater of 15% of
Tangible Assets at the time of Incurrence or $10.0 million;


 


(e)  Indebtedness Incurred by the Company or any
of its Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including without limitation letters of credit in respect of workers’


 


44





















 


compensation
claims, health, disability or other employee benefits or property, casualty or
liability insurance or self-insurance, or with respect to agreements to provide
services, or other Indebtedness with respect to reimbursement type obligations
regarding workers’ compensation claims; provided, however, that
upon the drawing of such letters of credit, such obligations are reimbursed
within 30 days following such drawing;


 


(f)  Indebtedness arising from agreements of the
Company or a Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, Incurred in connection
with the disposition of any business, assets or a Subsidiary of the Company in
accordance with the terms of this Indenture, other than guarantees of
Indebtedness Incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such acquisition;


 


(g)  Indebtedness of the Company to a Restricted
Subsidiary of the Company; provided that any such Indebtedness is
subordinated in right of payment to the Notes; provided  further
that any subsequent issuance or transfer of any Capital Stock or any other
event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary of the Company or any other subsequent transfer of any
such Indebtedness (except to the Company or another Restricted Subsidiary)
shall be deemed, in each case to be an Incurrence of such Indebtedness subject
to the first paragraph of this Section 4.03;


 


(h)  shares of Preferred Stock of a Restricted
Subsidiary issued to the Company or another Restricted Subsidiary of the
Company; provided that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any such Restricted
Subsidiary holding such shares of Preferred Stock ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such shares of Preferred
Stock (except to the Company or another Restricted Subsidiary of the Company)
shall be deemed, in each case, to be an issuance of shares of Preferred Stock
subject to the first paragraph of this Section 4.03;


 


(i)  Indebtedness of a Restricted Subsidiary to
the Company or another Restricted Subsidiary of the Company; provided
that if a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is
not a Guarantor such Indebtedness is subordinated in right of payment to the
Guarantee of such Guarantor; provided  further that any subsequent
issuance or transfer of any Capital Stock or any other event which results in
any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such Indebtedness (except to
the Company or another Restricted Subsidiary of the Company) shall be deemed,
in each case, to be an Incurrence of such Indebtedness subject to the first
paragraph of this Section 4.03;


 


(j)  Hedging Obligations that are incurred in the
ordinary course of business (1) for the purpose of fixing or hedging interest
rate risk with respect to any Indebtedness that is permitted by the terms of
this Indenture to be outstanding, (2) for the purpose of fixing or hedging
currency exchange rate risk with respect to any currency exchanges or (3) for
the purpose of fixing or hedging commodity price risk with respect to any
commodity purchases;


 


45





















 


(k)  obligations in respect of performance, bid
and surety bonds and completion guarantees provided by the Company or any
Restricted Subsidiary in the ordinary course of business;


 


(l)  Indebtedness or Disqualified Stock of the
Company and any Restricted Subsidiary not otherwise permitted hereunder in an
aggregate principal amount, which when aggregated with the principal amount or
liquidation preference of all other Indebtedness and Disqualified Stock then
outstanding and Incurred pursuant to this clause (1), does not exceed $12.5
million at any one time outstanding;


 


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


 


(n)  the Incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness which serves to refund or refinance any
Indebtedness Incurred as permitted under the first paragraph of this covenant
and clauses (b) and (c) of this paragraph, or any Indebtedness issued to so
refund or refinance such Indebtedness (subject to the following proviso,
“Refinancing Indebtedness”); provided, however, that such
Refinancing Indebtedness:


 


(i)        has
a Weighted Average Life to Maturity at the time such Refinancing Indebtedness
is Incurred which is not less than the remaining Weighted Average Life to
Maturity of the Indebtedness being refunded or refinanced;


 


(ii)       has
a Stated Maturity which is no earlier than the Stated Maturity of the
Indebtedness being refunded or refinanced;


 


(iii)      to
the extent such Refinancing Indebtedness refinances Indebtedness pari passu
with, or subordinate to, the Notes or the Guarantees, is pari passu with, or
subordinate to, the Notes or the Guarantees, as applicable;


 


(iv)     is
Incurred in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding of the Indebtedness being refinanced plus
premium and fees Incurred in connection with such refinancing; and


 


(v)      shall
not include (x) Indebtedness of a Restricted Subsidiary that is not a Guarantor
that refinances Indebtedness of the Company or (y)


 


46





















 


Indebtedness
of the Company or a Restricted Subsidiary that refinances Indebtedness of an
Unrestricted Subsidiary;


 


and provided  further that
subclauses (i) and (ii) of this clause (n) shall not apply to any refunding or
refinancing of any Senior Indebtedness;


 


(o)  Indebtedness or Disqualified Stock of Persons
that are acquired by the Company or any of its Restricted Subsidiaries or
merged into a Restricted Subsidiary in accordance with the terms of this
Indenture; provided, however, that such Indebtedness or Disqualified Stock is
not Incurred in contemplation of such acquisition or merger or to provide all
or a portion of the funds or credit support required to consummate such
acquisition or merger; provided, further, however, that after giving effect to
such acquisition and the Incurrence of such Indebtedness or Disqualified Stock
either (i) the Company would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Leverage Ratio test set forth in the first
sentence of this covenant or (ii) the Leverage Ratio would be less than
immediately prior to such acquisition;


 


(p)  The Incurrence by the Company or any
Restricted Subsidiary of Indebtedness to finance, in whole or in part, an
acquisition of a business or assets consummated within 60 days of such
Incurrence; provided that after giving effect to such acquisition and
the Incurrence of such Indebtedness the Leverage Ratio would be less than
immediately prior to such acquisition;


 


(q)  Indebtedness of the Company and any
Restricted Subsidiary arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds, so long as such Indebtedness is covered within five
business days;


 


(r)  the incurrence by the Company or any
Restricted Subsidiary of Indebtedness, the net proceeds of which are used to
defease the Notes as provided in Article 8 of this Indenture; and


 


(s)  Indebtedness represented by the issuance of
Additional Notes and related Guarantees in connection with the exchange of
Class B common stock of the Company outstanding on the Issue Date (or Class B
common stock issued or distributed in respect of, or in substitution for, Class
B common stock outstanding on the Issue Date, in connection with any stock
split or combination) for IDSs provided that all the Exchange Conditions are
satisfied at the time of such exchange and issuance.


 


For purposes of determining compliance with
this Section 4.03, in the event that an item of Indebtedness meets the criteria
of more than one of the categories of permitted Indebtedness specified in clauses
(a) through (s) above or is entitled to be Incurred pursuant to the first
paragraph of this covenant, the Company may, in its sole discretion, classify
or reclassify such item of Indebtedness or any portion thereof in any manner
that complies with this covenant and such item or such portion of such item of
Indebtedness will be treated as having been Incurred pursuant to only one of
such clauses or pursuant to the first paragraph hereof; 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 Indebtedness, becoming
Indebtedness shall not be deemed an


 


47





















 


Incurrence of Indebtedness. Accrual of
interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness will not be deemed to be an Incurrence of
Indebtedness for purposes of this covenant.


 


SECTION 4.04.      Limitation
on Restricted Payments.  The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly:


 


(1)  declare or pay any dividend or make any
distribution or payment on account of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests, including any payment made in connection with
any merger or consolidation involving the Company (other than (A) dividends or
distributions by the Company payable solely in Equity Interests (other than
Disqualified Stock) of the Company, (B) dividends or distributions or payments by
a Restricted Subsidiary that is a Wholly Owned Restricted Subsidiary or (C)
dividends, distributions or payments by a Restricted Subsidiary that is not a
Wholly Owned Restricted Subsidiary so long as, in the case of any dividend or
distribution payable on or in respect of any class or series of securities
issued by a Restricted Subsidiary that is not a Wholly Owned Restricted
Subsidiary, the Company or a Restricted Subsidiary receives at least its pro
rata share of such dividend or distribution in accordance with its Equity
Interests in such class or series of securities);


 


(2)  purchase or otherwise acquire or retire for
value any Equity Interests of the Company or any Restricted Subsidiary;


 


(3)  make any principal payment on, cause a
defeasance of, or purchase, repurchase, redeem or otherwise acquire or retire
for value, prior to any scheduled maturity, scheduled repayment or scheduled
sinking fund payment, any Subordinated Indebtedness;


 


(4)  make any Restricted Investment (all such
payments and other actions set forth in this clause (4) and in clauses (1), (2)
and (3) above being collectively referred to as “Restricted Payments”), unless,
at the time of such Restricted Payment,


 


(a)           no Default or Event of Default shall
have occurred and be continuing or would occur as a consequence thereof;


 


(b)  (x) no Dividend Suspension Period shall have
occurred and be continuing, (y) no Interest Deferral Period shall have occurred
and be continuing, and (z) no interest deferred during a prior Interest
Deferral Period (including interest thereon) remains unpaid; and


 


(c)  such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the Issue Date (including, without duplication, Restricted
Payments permitted by clauses (1), (4) and (6) of the next succeeding
paragraph, but excluding all other Restricted Payments permitted by the next
succeeding paragraph), is less than the sum of, without duplication:


 


48





















 


(i)            100%
of the Excess Cash of the Company for the period (taken as one accounting
period) from the fiscal quarter that first begins after the Issue Date to the
end of the Company’s most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payments,
plus


 


(ii)           100%
of the aggregate net cash proceeds or property, other than cash, but only when
and to the extent that such property is converted to cash, in each case
received by the Company and its
Restricted Subsidiaries since the Issue Date from the issue or sale of Equity
Interests of the Company (excluding Refunding Capital Stock (as defined below),
Designated Preferred Stock and Disqualified Stock), including Equity Interests
issued upon conversion of Indebtedness, Disqualified Stock and Designated
Preferred Stock or upon exercise of warrants or options (other than an issuance
or sale to a Subsidiary of the Company or an employee stock ownership plan or
trust established by the Company or any of its Subsidiaries) plus


 


(iii)          100%
of the aggregate amount of contributions to the capital of the Company since
the Issue Date received in cash or in property other than cash, but only when
and to the extent that such property is converted to cash (other than Refunding
Capital Stock, Designated Preferred Stock and Disqualified Stock), plus


 


(iv)          100%
of the aggregate amount of cash or property other than cash, but only when and
to the extent that such property is converted to cash, in each case received
from (A) the sale or other disposition (other than to the Company or a
Restricted Subsidiary) of Restricted Investments made by the Company and its
Restricted Subsidiaries and from repurchases and redemptions of such Restricted
Investments from the Company and its Restricted Subsidiaries by any Person
(other than the Company or any of its Subsidiaries) and from repayments of
loans or advances which constituted Restricted Investments, (B) the sale (other
than to the Company or a Restricted Subsidiary) of the Capital Stock of an
Unrestricted Subsidiary or (C) a distribution or dividend from an Unrestricted
Subsidiary, plus


 


(v)           in
the event any Unrestricted Subsidiary has been redesignated as a Restricted
Subsidiary or has been merged, consolidated or amalgamated with or into, or
transfers or conveys its assets to, or is liquidated into, the Company or a
Restricted Subsidiary, (A) 100% of the amount of Cash Equivalents on the
balance sheet of such Unrestricted Subsidiary at the time of such redesignation,
combination or transfer (except to the extent such Cash Equivalents were
financed with an incurrence of indebtedness) and (B) 100% of the aggregate net
cash proceeds received by the Company (i) at the time of such redesignation,
combination or transfer, or (ii) with respect to assets other than cash, but
only when and to the extent that such property is converted to cash.


 


The foregoing provisions shall not prohibit:


 


49





















 


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


 


(2)  (a) the repurchase, retirement or other
acquisition of any Equity Interests (“Retired Capital Stock”) or Subordinated
Indebtedness of the Company in exchange for, or out of the proceeds of the
substantially concurrent sale of, Equity Interests of the Company or
contributions to the equity capital of the Company (other than any Disqualified
Stock or any Equity Interests sold to a Subsidiary of the Company or to an
employee stock ownership plan or any trust established by the Company or any of
its Subsidiaries) (collectively, including any such contributions, “Refunding
Capital Stock”) and (b) the declaration and payment of accrued dividends on the
Retired Capital Stock out of the proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company or to an employee stock ownership
plan or any trust established by the Company or any of its Subsidiaries) of
Refunding Capital Stock or the sale of Subordinated Indebtedness;


 


(3)  the declaration and payment of dividends or
distributions to holders of any class or series of Disqualified Stock of the
Company or any of its Restricted Subsidiaries issued or incurred in accordance
with Section 4.03 hereof;


 


(4)  the declaration and payment of dividends or
distributions to holders of any class or series of Designated Preferred Stock
issued after the Issue Date; provided, however, that (A) for the
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date of issuance of such
Designated Preferred Stock, after giving effect to such issuance (and the payment
of dividends or distributions) on a pro forma basis, the Company would have had
a Leverage Ratio of no more than 6.25 to 1.00 and (B) the aggregate amount of
dividends declared and paid pursuant to this clause (4) does not exceed the net
cash proceeds received by the Company from the sale of Designated Preferred
Stock issued after the Issue Date;


 


(5)  the redemption, repurchase or other
acquisition or retirement of Subordinated Indebtedness of the Company made by
exchange for, or out of the proceeds of the substantially concurrent sale of,
new Indebtedness of the Company so long as (A) the principal amount of such new
Subordinated Indebtedness does not exceed the principal amount of the
Subordinated Indebtedness being so redeemed, repurchased, acquired or retired
for value (plus the amount of any premium required to be paid under the terms
of the instrument governing the Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired), (B) such Indebtedness is subordinated to the
Senior Indebtedness and the Notes and the Guarantees at least to the same
extent as such Subordinated Indebtedness so purchased, exchanged, redeemed,
repurchased, acquired or retired for value, (C) such Indebtedness has a final
scheduled maturity date equal to or later than the final scheduled maturity
date of the Subordinated Indebtedness being so redeemed, repurchased, acquired
or retired and (D) such


 


50





















 


Indebtedness has a Weighted Average Life to
Maturity equal to or greater than the remaining Weighted Average Life to
Maturity of the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired;


 


(6)  Investments in Unrestricted Subsidiaries
having an aggregate Fair Market Value, taken together with all other
Investments made pursuant to this clause (6) that are at that time outstanding,
not to exceed $5.0 million (with the Fair Market Value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value);


 


(7)  other Restricted Payments in an aggregate
amount not to exceed $5.0 million;


 


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


 


(9)  the acquisition of Class B common stock
outstanding on the Issue Date (or Class B common stock issued or distributed in
respect of, or in substitution for, Class B common stock outstanding on the
Issue Date, in connection with any stock split or combination) in connection
with the issuance of IDSs upon exchange of the Class B common stock; provided
that all the Exchange Conditions are satisfied at the time of such exchange and
acquisition; provided further that such exchange and acquisition will not increase
the amount available for Restricted Payments under clause (c)(ii) of the
preceding paragraph; and


 


(10)         repurchases of 10,275 shares of  Class B Common Stock and 59,723 IDSs on the
Issue Date.


 


provided,
however, that at the time of, and after giving effect to, any Restricted
Payment permitted under clauses (3), (4), (6), (7) and (9), no Default or Event
of Default shall have occurred and be continuing or would occur as a
consequence thereof.


 


SECTION 4.05.      Dividend
and Other Payment Restrictions Affecting Subsidiaries.  The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any Restricted
Subsidiary to:


 


(a)  (i) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (ii) pay any Indebtedness owed to the Company or
any of its Restricted Subsidiaries;


 


(b)  make loans or advances to the Company or any
of its Restricted Subsidiaries; or


 


(c)  sell, lease or transfer any of its properties
or assets to the Company or any of its Restricted Subsidiaries;


 


51





















 


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


 


(1)  contractual encumbrances or restrictions in
effect on the Issue Date, including pursuant to the Credit Agreement and the
other Senior Credit Documents;


 


(2)  this Indenture, the Notes and the Guarantees;


 


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


 


(4)  any agreement or other instrument relating to
Indebtedness of a Person acquired by the Company or any Restricted Subsidiary
which was in existence at the time of such acquisition (but not created in
contemplation thereof or to provide all or any portion of the funds or credit
support utilized to consummate such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired;


 


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


 


(6)  Secured Indebtedness otherwise permitted to
be Incurred pursuant to Sections 4.03 and Section 4.08 that limit the right of
the debtor to dispose of the assets securing such Indebtedness;


 


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


 


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


 


(9)  customary provisions contained in leases,
licenses, agreements to provide services and other similar agreements entered
into in the ordinary course of business that impose restrictions of the type
specified in clause (c) above, including but not limited to, customary
non-assignment provisions;


 


(10)  other Indebtedness of Restricted Subsidiaries
permitted to be Incurred subsequent to the Issue Date pursuant to Section
4.03(l); or


 


(11)  any encumbrances or restrictions of the type
referred to in clauses (a), (b) and (c) above imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (1) through (10) above; provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith


 


52





















 


judgment of the Board of Directors, no more
restrictive with respect to such dividend and other payment restrictions than
those contained in the dividend or other payment restrictions prior to such
amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.


 


SECTION 4.06.      Asset
Sales.  (a) The Company shall
not, and shall not permit any of its Restricted Subsidiaries to cause or make
an Asset Sale, unless (x) the Company, or its Restricted Subsidiaries, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value (as determined in good faith by the Company) of
the assets sold or otherwise disposed of and (y) except in the case of a
Permitted Asset Swap, at least 75% of the consideration therefor received by
the Company, or such Restricted Subsidiary, as the case may be, is in the form
of Cash Equivalents; provided that the amount of the following shall be deemed
to be Cash Equivalents for the purposes of this provision:


 


(i)        any
liabilities (as shown on the Company’s or such Restricted Subsidiary’s most
recent balance sheet or in the notes thereto) of the Company or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
Notes) that are assumed by the transferee of any such assets;


 


(ii)       any
notes or other obligations or other securities received by the Company or such
Restricted Subsidiary from such transferee that are converted by the Company or
such Restricted Subsidiary into Cash Equivalents within 180 days of the receipt
thereof (to the extent of the Cash Equivalents received); and


 


(iii)      any
Designated Noncash Consideration received by the Company or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market
Value, taken together with all other Designated Noncash Consideration received
pursuant to this clause that is at that time outstanding, not to exceed the
greater of 7.5% of Tangible Assets or $5.0 million (with the Fair Market Value
of each item of Designated Noncash Consideration being measured at the time
received and without giving effect to subsequent changes in value).


 


(b)  Within 365 days after the Company’s or any
Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, the
Company or such Restricted Subsidiary may apply the Net Proceeds from such
Asset Sale, at its option to:


 


(i)        permanently
reduce Obligations under the Credit Agreement (and, in the case of revolving
Obligations, to temporarily reduce such Obligations) or other Senior
Indebtedness or Pari Passu Indebtedness (provided that if the Company shall so
reduce Obligations under Pari Passu Indebtedness, it will equally and ratably
reduce Obligations under the Notes by making an offer (in accordance with the
procedures set forth below for an Asset Sale Offer) to all Holders to purchase
at a purchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, the pro rata principal amount of Notes) or
Indebtedness of a Restricted Subsidiary, in each case other than Indebtedness
owed to the Company or an Affiliate of the Company;


 


53





















 


(ii)                    make
an investment in any one or more businesses, capital expenditures or
acquisitions of other assets in each case used or useful in a Similar Business,
or set aside in respect of a project in connection therewith that has been
commenced or for
which a binding contractual commitment has been entered into; and/or


 


(iii)                 make
an investment in properties or assets that replace the properties and assets
that are the subject of such Asset Sale, or set aside in respect of a project
in connection therewith that has been commenced or for which a binding
contractual commitment has been entered into.


 


Pending the final application of any such Net Proceeds, the Company or
such Restricted Subsidiary may temporarily reduce Indebtedness under a
revolving credit facility, if any, or otherwise invest such Net Proceeds in
Cash Equivalents or Investment Grade Securities. Any Net Proceeds from any
Asset Sale that are not applied as provided and within the time period set
forth in the first sentence of this paragraph will be deemed to constitute
“Excess Proceeds.”


 


When the aggregate amount of Excess Proceeds exceeds $10.0 million, the
Company shall make an offer to all Holders of Notes (an “Asset Sale Offer”) to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to but not
including the date fixed for the closing of such offer, in accordance with the
procedures set forth in this Indenture. The Company will commence an Asset Sale
Offer with respect to Excess Proceeds within ten Business Days after the date
that Excess Proceeds exceed $10.0 million by mailing the notice required
pursuant to the terms of this Indenture, with a copy to the Trustee. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining
Excess Proceeds for general corporate purposes. If the aggregate principal
amount of Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes to be purchased pursuant to
Section 4.06(c)(3). Upon completion of any such Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.


 


(c) (1) 
Promptly, and in any event within ten Business Days after the Company
becomes obligated to make an Asset Sale Offer, the Company shall deliver to the
Trustee and send, by first-class mail, postage prepaid, to each Holder at such
Holder’s registered address, a written notice stating that the Holder may elect
to have such Holder’s Notes purchased by the Company either in whole or in part
(subject to prorating pursuant to Section 4.06(c)(3)), at the applicable
purchase price.  The notice shall be
mailed at least 30 but not more than 60 days before the purchase date.  If any Note is to be purchased in part only,
any notice of purchase that relates to such Note shall state the portion of the
principal amount thereof that has been or is to be purchased.


 


(2)  Not later than the date upon which written
notice of an Asset Sale Offer is delivered to the Trustee as provided above,
the Company shall deliver to the Trustee an Officers’ Certificate as to (i) the
amount of the Excess Proceeds, (ii) the allocation of the Net Proceeds from the
Asset Sales pursuant to which such Asset Sale Offer is being made and (iii) the
compliance of such allocation with


 


54





















 


the provisions of Section 4.06(b).  On such date, the Company shall also
irrevocably deposit with the Trustee or with a paying agent (or, if the Company
is acting as its own paying agent, segregate and hold in trust) an amount equal
to the Excess Proceeds to be invested in Cash Equivalents selected by the
Company and to be held for payment in accordance with the provisions of this
Section 4.06.  Upon the expiration
of the period for which the Offer remains open (the “Offer Period”), the
Company shall deliver to the Trustee for cancellation the Notes or portions
thereof that have been properly tendered to and are to be accepted by the
Company.  The Trustee (or the Paying
Agent, if not the Trustee) shall, on the date of purchase, mail or deliver
payment to each tendering Holder in the amount of the purchase price.  In the event that the Excess Proceeds
delivered by the Company to the Trustee is greater than the purchase price of
the Notes tendered, the Trustee shall deliver the excess to the Company immediately
after the expiration of the Offer Period for application in accordance with
Section 4.06(b) above.


 


(3)  Holders electing to have a Note purchased
shall be required to surrender the Note, with an appropriate form duly
completed, to the Company at the address specified in the notice at least three
Business Days prior to the purchase date. 
Holders shall be entitled to withdraw their election if the Trustee or
the Company receives not later than one Business Day prior to the purchase
date, a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note which was delivered by the
Holder for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased.  If
at the expiration of the Offer Period more Notes are tendered pursuant to an
Asset Sale Offer than the Company is required to purchase, selection of such
Notes for purchase shall be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
such Notes are listed, or if such Notes are not so listed, on a pro rata basis,
by lot or by such other method as the Trustee shall deem fair and appropriate
(and in such manner as complies with applicable legal requirements).  A new Note in principal amount equal to the
unpurchased portion of any Note purchased in part will be issued in the name of
the Holder thereof upon cancellation of the original Note.  On and after the purchase date, unless the
Company defaults in payment of the purchase price, interest shall cease to
accrue on Notes or portions thereof purchased.


 


(d) 
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations to the extent such
laws or regulations are applicable in connection with the repurchase of the
Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Indenture,
the Company shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations described in this
Indenture by virtue thereof.


 


SECTION 4.07.                                         Transactions
with Affiliates.  The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property


 


55





















 


or assets from, or enter into or make or amend any transaction or
series of transactions, contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate of the Company (each of
the foregoing, an “Affiliate Transaction”) involving aggregate consideration in
excess of $1.0 million, unless:


 


(1) 
such Affiliate Transaction is on terms that are not materially less
favorable to the Company or the relevant Restricted Subsidiary than those that
could have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and


 


(2) 
with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, the
Company delivers to the Trustee a resolution adopted by the majority of the
Board of Directors of the Company, approving such Affiliate Transaction and set
forth in an Officers’ Certificate certifying that such Affiliate Transaction
complies with clause (1) above.


 


The foregoing provisions shall not apply to
the following:


 


(i)                                     transactions
between or among the Company and/or any of its Restricted Subsidiaries;


 


(ii)                                  Permitted
Investments and Restricted Payments permitted by Section 4.04;


 


(iii)                               the
payment of compensation (including amounts paid pursuant to employee benefit
plans) or the provision of indemnity to officers, directors and/or employees of
the Company or any of the Restricted Subsidiaries so long as such payments are
pursuant to a policy (i) established by the Board of Directors in good faith
and (ii) evidenced by a resolution of the Board of Directors;


 


(iv)                              maintenance
in the ordinary course of business of customary benefit plans or arrangements
for employees, officers and/or directors, including vacation plans, health and
life insurance plans, deferred compensation plans, retirement or savings plans
and similar plans or arrangements;


 


(v)                                 issuance
of securities or other payments, awards or grants in cash, securities or
otherwise, or the grant of options, pursuant to any employment arrangements or
employee benefit plans or arrangements which are approved by a majority of the
Board of Directors in good faith;


 


(vi)                              the
payment of all fees and expenses relating to the Transactions;


 


(vii)                           transactions
in which the Company or any of its Restricted Subsidiaries, as the case may be,
delivers to the Trustee a letter from an Independent Financial Advisor stating
that such transaction is fair to the Company or such Restricted Subsidiary from
a financial point of view or meets the requirements of clause (1) of the
preceding paragraph;


 


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(viii)                        payments
or loans to employees or consultants in the ordinary course of business which
are approved by a majority of the Board of Directors in good faith;


 


(ix)                                any
agreement as in effect as of the Issue Date or any amendment thereto (so long
as any such amendment is not disadvantageous to the holders of the Notes in any
material respect) or any transaction contemplated thereby;


 


(x)                                   the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of its obligations under the terms of, any stockholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party as of the Issue Date and any similar agreements
which it may enter into thereafter, provided, however, that the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of its obligations under any future amendment to any such existing
agreement or under any similar agreement entered into after the Issue Date
shall only be permitted by this clause to the extent that the terms of any such
amendment or new agreement are not otherwise disadvantageous to the Holders of
the Notes in any material respect;


 


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


 


(xii)                             the
issuance of Capital Stock (other than Disqualified Stock) of the Company or
IDSs in respect of the Company’s securities (including such securities
represented thereby) or Additional Notes or other Pari Passu Indebtedness evidenced
by a different series of notes or shares of the Company’s Capital Stock to any
Permitted Holder.


 


SECTION 4.08.                                         Liens.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, Incur or
suffer to exist any Lien on any asset or property of the Company or such
Restricted Subsidiary, or any income or profits therefrom, or assign or convey
any right to receive income therefrom, that secures any Indebtedness of the
Company or any of its Subsidiaries (other than Senior Indebtedness) unless the
Notes are equally and ratably secured with (or on a senior basis to, in the
case of Indebtedness subordinated in right of payment to the Notes) the
Indebtedness so secured or until such time as such obligations are no longer
secured by a Lien.  The preceding
sentence will not require the Company or any Restricted Subsidiary to secure
the Notes if the Lien consists of a Permitted Lien.


 


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No Guarantor shall directly or indirectly
create, Incur or suffer to exist any Lien on any asset or property of such
Guarantor or any income or profits therefrom, or assign or convey any right to
receive income therefrom, that secures any Indebtedness of such Guarantor
(other than Senior Indebtedness of such Guarantor) unless the Guarantee of such
Guarantor is equally and ratably secured with (or on a senior basis to, in the
case of Indebtedness subordinated in right of payment to such Guarantor’s
Guarantee) the Indebtedness so secured or until such time as such obligations
are no longer secured by a Lien.  The
preceding sentence will not require any Guarantor to secure its Guarantee if
the Lien consists of a Permitted Lien.


 


SECTION 4.09.                                         Change of
Control.  (a)  Upon the occurrence of a Change of Control,
each Holder shall have the right to require that the Company repurchase all or
any part of such Holder’s Notes at a purchase price in cash equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, if any, to but
not including the date of repurchase (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date that is on or prior to the date of purchase), in accordance with
the terms contemplated in Section 4.09(b) ; provided, however,
that notwithstanding the occurrence of a Change of Control, the Company shall
not be obligated to purchase the Notes pursuant to this Section 4.09 in
the event that it has exercised its right to redeem all the Notes pursuant to
Section 3.07.  In the event that at
the time of such Change of Control the terms of any Senior Lender Indebtedness
restrict or prohibit the repurchase of Notes pursuant to this
Section 4.09, then prior to the mailing of the notice to Holders provided
for in Section 4.09(b) below but in any event within 30 days following any
Change of Control, the Company shall (i) repay in full all Senior Lender
Indebtedness or offer to repay in full all Senior Lender Indebtedness and repay
the Senior Lender Indebtedness of each lender who has accepted such offer or
(ii) obtain the requisite consent under the agreements governing the Senior
Lender Indebtedness to permit the repurchase of the Notes as provided for in
Section 4.09(b).


 


(b) 
Within 30 days following any Change of Control, unless the Company has
exercised its right to redeem the Notes pursuant to Section 3.07, the
Company shall mail a notice (the “Change of Control Offer”) to each Holder with
a copy to the Trustee stating:


 


(1)  that a Change of Control has occurred and
that such Holder has the right to require the Company to purchase such Holder’s
Notes of such series at a purchase price in cash equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, to but not including
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest on the relevant interest payment
date);


 


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


 


(3)  whether the agreements then governing the
Senior Lender Indebtedness will permit the repurchase of the Notes;


 


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


 


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(5)  the instructions determined by the Company,
consistent with this Section 4.09, that a Holder must follow in order to
have its Notes purchased.


 


(c)  In
order to exercise the right to require the Company to repurchase the Notes, a
Holder must separate its IDSs into the shares of Class A Common Stock and Notes
represented thereby.


 


(d) 
Notwithstanding the foregoing provisions of this Section 4.09, the
Company shall not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.09(b) applicable to a Change of Control Offer made by the Company
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.


 


(e) 
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Notes pursuant to this
Section 4.09.  To the extent that
the provisions of any securities laws or regulations conflict with provisions
of this Section 4.09, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.09 by virtue thereof.


 


SECTION 4.10.                                         Compliance
Certificate.  The Company
shall deliver to the Trustee within 120 days after the end of each fiscal year
of the Company commencing with the fiscal year ending on December 31,
2004, an Officers’ Certificate stating that in the course of the performance by
the signers of their duties as officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default
that occurred during such period.  If
they do, the certificate shall describe the Default, its status and what action
the Company is taking or proposes to take with respect thereto.  The Company also shall comply with
Section 314(a)(4) of the TIA.


 


SECTION 4.11.                                         Further
Instruments and Acts.  Upon
request of the Trustee or as otherwise necessary, the Company shall execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this
Indenture.


 


SECTION 4.12.                                         Future
Guarantors.  The Company shall
cause each Restricted Subsidiary organized under the laws of the United States
of America or any state or territory thereof that Incurs Indebtedness or issues
shares of Disqualified Stock or Preferred Stock (other than Mid-Missouri
Telephone Company or any other Restricted Subsidiary that cannot guarantee
Indebtedness without obtaining the consent or waiver of any U.S. federal or state
regulatory or governmental agency or body) to execute and deliver to the
Trustee a supplemental indenture in the form of Exhibit C hereto
pursuant to which such Subsidiary shall guarantee payment of the Notes.


 


SECTION 4.13.                                         Limitation
on Layering. The Company shall not incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is contractually
subordinate or junior in right of payment to any Senior Indebtedness of the
Company and senior


 


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in right of payment to the Notes. No Guarantor shall incur, create,
issue, assume, guarantee or otherwise become liable for any Indebtedness that
is contractually subordinate or junior in right of payment to the Senior
Indebtedness of such Guarantor and senior in right of payment to such
Guarantor’s Guarantee, provided, however, that this
Section 4.13 shall not apply to distinctions between categories of
Indebtedness that exist by reason of any Liens or Guarantees securing or in
favor of some but not all of such Indebtedness or securing such Indebtedness
with greater or lesser priority or with different collateral.


 


SECTION 4.14.                                         Subsequent
Issuance.


 


(a) 
The Company may issue Additional Notes:


 


(i)                                     in
connection with the exchange of shares of Class B Common Stock of the Company
outstanding on the Issue Date (or Class B common stock issued or distributed in
respect of, or in substitution for, Class B common stock outstanding on the
Issue Date, in connection with any stock split or combination); or


 


(ii)                                  for
other purposes so long as the Incurrence of Indebtedness evidenced by such
Additional Notes is permitted under Section 4.03 hereof.


 


(b) 
Any Additional Notes will vote on all matters with the Notes issued in
the Offering. The Additional Notes will be deemed to have the same accrued
current period interest, deferred interest and defaults as the Notes issued in
the Offering and will be deemed to have expended Payment Blockage Periods and
interest deferral periods to the same extent as the Notes issued in the
Offering.


 


(c) 
The Company agrees, and by purchasing the Notes each Holder shall be
deemed to have agreed, that in the event there is an issuance of Additional
Notes with original issue discount (and any issuance of Additional Notes thereafter),
a portion of such Holder’s Notes (whether held directly in book-entry form or
certificated form or held as part of IDSs) will be exchanged, without any
further action of such Holder, for a portion of the Additional Notes purchased
by the Holders of such Additional Notes, such that, following any such
additional issuance and exchange, each Holder of the Notes or the IDSs (as the
case may be) owns an indivisible unit composed of the Notes and Additional
Notes of each issuance in the same proportion as each other Holder, and the
records of DTC and the Trustee will be revised to reflect each such exchange
without any further action of such Holder (each such exchange, an “Automatic
Exchange”). The aggregate principal amount of the Notes owned by each Holder
will not change as a result of an Automatic Exchange. Any Additional Notes will
be guaranteed by the Guarantors on the same basis as the Original Notes.


 


(d) 
The Company may issue Additional Notes only if it delivers to the
Trustee prior to or simultaneously with such issuance (i) an opinion of tax
counsel to the effect that the Additional Notes should be treated as debt for
U.S. federal income tax purposes and (ii) an Opinion of Counsel to the effect
that the Additional Notes and the related Guarantees constitute valid and
binding obligations of the Company and the respective Guarantors entitled to
the benefits of the Indenture and are enforceable against the Company and the
respective Guarantors


 


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in accordance with their terms. In addition, if an issuance of
Additional Notes would trigger the automatic exchange provisions of this
Indenture, the Company may not issue such Additional Notes unless it delivers
to the Trustee on the date of such issuance a certificate of the Company’s
principal financial officer in the form of Exhibit D hereto.


 


ARTICLE 5


 


SUCCESSOR COMPANY 


 


SECTION 5.01.                                         Merger,
Consolidation or Sale of All or Substantially All Assets.  (a) 
The Company may not consolidate or merge with or into or wind up into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to any Person unless:


 


(i)                                     the
Company is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition will have been
made is a corporation, partnership or limited liability company organized or
existing under the laws of the United States, any state thereof, the District
of Columbia, or any territory thereof (the Company or such Person, as the case
may be, being herein called the “Successor Company”);


 


(ii)                                  the
Successor Company (if other than the Company) expressly assumes all the
obligations of the Company under this Indenture and the Notes pursuant to a
supplemental indenture or other documents or instruments in form reasonably
satisfactory to the Trustee;


 


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


 


(iv)                              immediately
after giving pro forma effect to such transaction, as if such transaction had
occurred at the beginning of the applicable four-quarter period, either (A) the
Successor Company would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Leverage Ratio test set forth in the first
sentence of Section 4.03 or (B) the Leverage Ratio for the Successor
Company and its Restricted Subsidiaries would be less than or equal to such
ratio for the Company and its Restricted Subsidiaries immediately prior to such
transaction;


 


(v)                                 each
Guarantor, unless it is the other party to the transactions described above,
shall have by supplemental indenture confirmed that its


 


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Guarantee
shall apply to the Successor Company’s obligations under this Indenture and the
Notes; and


 


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


 


The Successor Company will succeed to, and be substituted for, the
Company under this Indenture and the Notes. 
Notwithstanding clauses (iii) and (iv) above, (a) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company or to another Restricted Subsidiary; and
(b) the Company may merge with an Affiliate incorporated solely for the purpose
of reincorporating the Company in another state of the United States so long as
the amount of Indebtedness of the Company and its Restricted Subsidiaries is
not increased thereby.


 


(b) 
Subject to Section 11.02(b) hereof, each Guarantor shall not, and
the Company shall not permit a Guarantor to, consolidate or merge with or into
or wind up into (whether or not such Guarantor is the surviving corporation),
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions to, any Person unless:


 


(i)                                     such
Guarantor is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than such Guarantor) or to which such
sale, assignment, transfer, lease, conveyance or other disposition will have
been made is a corporation, partnership or limited liability company organized
or existing under the laws of the United States, any state thereof, the
District of Columbia, or any territory thereof (such Guarantor or such Person,
as the case may be, being herein called the “Successor Guarantor”);


 


(ii)                                  the
Successor Guarantor (if other than such Guarantor) expressly assumes all the
obligations of such Guarantor under this Indenture and such Guarantor’s
Guarantee pursuant to a supplemental indenture or other documents or
instruments in form reasonably satisfactory to the Trustee;


 


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


 


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


 


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Subject to the limitations set forth in this
Indenture, the Successor Guarantor shall succeed to, and be substituted for,
such Guarantor under this Indenture and such Guarantor’s Guarantee.  Notwithstanding clause (iii) of this
Section 5.01(b), a Guarantor may merge with an Affiliate incorporated
solely for the purpose of reincorporating such Guarantor in another
jurisdiction so long as the amount of Indebtedness of the Guarantor is not
increased thereby.


 


ARTICLE 6


 


DEFAULTS AND REMEDIES


 


SECTION 6.01.                                         Events of
Default.  An “Event of
Default” means:


 


(a)  a
default in any payment of interest on any Note when due, whether or not such
payment shall be prohibited by the provisions of Article 10, continued for
30 days, subject to the interest deferral provisions contained in
Section 4.01 hereof; provided, however, that a default in
any payment of interest on the Note required to be made on December 30,
2009 shall immediately constitute an Event of Default (without regard to the
length of time for which such default continues);


 


(b)  a
default in the payment of principal or premium, if any, of any Note when due at
its Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise, whether or not such payment shall be prohibited by
Article 10;


 


(c) 
the failure by the Company to comply with Section 5.01 of this
Indenture;


 


(d) 
the failure by the Company to comply for 30 days, after notice to it,
with Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.12 or 4.13 (in
each case, other than a failure to purchase Notes);


 


(e) 
the failure by the Company to comply for 60 days after notice with its
other agreements contained in the Notes or this Indenture;


 


(f) 
the failure by the Company or any Significant Subsidiary to pay any
Indebtedness (other than Indebtedness owing to the Company or a Restricted
Subsidiary) within any applicable grace period after final maturity or the
acceleration of any such Indebtedness by the holders thereof because of a
default if the total amount of such Indebtedness unpaid or accelerated exceeds
$7.5 million or its foreign currency equivalent;


 


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


 


(i)                                     commences
a voluntary case under Bankruptcy Law;


 


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


 


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


 


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


 


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


 


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


 


(ii)                                  appoints
a Custodian of the Company or any of its Significant Subsidiaries or for all or
substantially all of the property of the Company or any of its Significant
Subsidiaries; or


 


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


 


and the order or decree remains unstayed and in effect for 60 days;


 


(i) 
the rendering of any judgment or decree for the payment of money (other
than judgments which are covered by enforceable insurance policies issued by
solvent carriers) in excess of $7.5 million or its foreign currency equivalent
against the Company or a Significant Subsidiary if (A) an enforcement
proceeding thereon is commenced and not discharged or stayed within 60 days
thereafter or (B) such judgment or decree remains outstanding for a period of 60
days following such judgment and is not discharged, waived or stayed (the
“judgment default provision”);


 


(j) 
any Guarantee ceases to be in full force and effect, except as
contemplated by the terms thereof, or any Guarantor denies or disaffirms its
obligations under this Indenture or any Guarantee and the Default continues for
10 days; or


 


(k) 
except as permitted by clause (1) of Section 4.04, the Company pays
any dividend on shares of the Common Stock (A) during the period that any
interest is being deferred, so long as any deferred interest and accrued
interest thereon has not been paid in full or (B) during a Dividend Suspension
Period or the continuance of an Event of Default.


 


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


 


However, a Default under clause (d) or (e)
shall not constitute an Event of Default until the Holders of 25% in principal
amount of the outstanding Notes notify the Company of the Default and the
Company does not cure such Default within the time specified in clause (d) or
(e), as the case may be, 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.”  When a Default or Event of Default is cured,
it ceases.


 


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 of Default and any event


 


64





















 


which with the giving of notice or the lapse of time would become an
Event of Default under, its status and what action the Company is taking or
proposes to take with respect thereto.


 


SECTION 6.02.                                         Acceleration.


 


(a)  If
an Event of Default (other than an Event of Default specified in
Section 6.01(g) or (h)) occurs and is continuing, the Trustee by notice to
the Company, or the Holders of at least 25% in principal amount of the
outstanding Notes, by notice in writing to the Company and the Representative
under the Credit Agreement, may declare the principal of, premium, if any, and
accrued but unpaid interest on all the Notes to be due and payable, subject to
the proviso in the next sentence and to clause (b) of this
Section 6.02.  Upon such a
declaration, such principal and interest shall be due and payable immediately; provided
that so long as there are any amounts outstanding under the Credit Agreement,
such declaration of acceleration shall not be effective until the earlier of
(1) the acceleration of any Indebtedness under the Credit Agreement or (2) five
business days after receipt by the Company and the Representative under the
Credit Agreement of written notice of declaration of acceleration of
Indebtedness hereunder.  If an Event of
Default specified in Section 6.01(g) or (h) occurs, the principal of,
premium, if any, and interest on all the Notes shall become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holders.


 


(b) 
After a declaration of acceleration has been made, but before a judgment
or decree for payment of the money due has been obtained by the Trustee, the
holders of a majority in aggregate principal amount of Notes outstanding, by
written notice to the Trustee, may annul such declaration and its consequences
if all Events of Default, other than the non-payment of principal of the Notes
which have become due solely by such declaration of acceleration, have been
cured or waived.


 


(c)  In
the event of a declaration of acceleration of the Notes because an Event of
Default has occurred and is continuing as a result of the acceleration of any
Indebtedness described in Section 6.01(f) above, the declaration of
acceleration of the Notes shall be automatically annulled if the Holders of all
Indebtedness described in Section 6.01(f) have rescinded the declaration
of acceleration in respect of such Indebtedness within 30 Business Days of the
date of such declaration, and if the annulment of the acceleration of the Notes
would not conflict with any judgment or decree of a court of competent jurisdiction,
and all existing Events of Default, except non-payment of principal or interest
on the Notes that became due solely because of the acceleration of the Notes,
have been cured or waived.


 


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 Notes or to enforce
the performance of any provision of the Notes or this Indenture.


 


The Trustee may maintain a proceeding even if
it does not possess any of the Notes or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee 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.


 


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SECTION 6.04.                                         Waiver
of Past Defaults.  The Holders
of a majority in principal amount of the Notes Outstanding of all series
affected by such waiver by notice to the Trustee may on behalf of the Holders
of all such Notes waive any existing Default or Event of Default and its
consequences except (i) a continuing Default or an Event of Default in the
payment of the principal of or premium, if any, or interest on a Note or (ii)
any Default or Event of Default in respect of a provision that under
Section 9.02 cannot be amended without the consent of each Holder affected.
 Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.  In case of any
such waiver, the Company, any other obligor upon the Notes, the Trustee and the
Holders shall be restored to their former positions and rights hereunder and
under the Notes, respectively.  This paragraph
of this Section 6.04(a) shall be in lieu of § 316(a)(1)(B) of the TIA
and such § 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.


 


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


 


SECTION 6.06.                                         Limitation
on Suits.  Subject to the
provisions of Article 9 relating to the duties of the Trustee, in case an
Event of Default occurs and is continuing, except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no Holder
may pursue any remedy with respect to this Indenture or the Notes unless:


 


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


 


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


 


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


 


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


 


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


 


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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. 
Subject to Sections 10.15 and 12.15 hereof, the right of any Holder to
receive payment of principal of and interest on the Notes held by such Holder,
on or after the respective due dates expressed in the Notes, 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, any Subsidiary or
Guarantor, their creditors or their property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder
to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07.


 


SECTION 6.10.                                         Trustee
May Enforce Claims Without Possession of Notes.  All rights of action and claims under this
Indenture or the Notes may be prosecuted and enforced by the Trustee without
the possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Notes in respect of which such
judgment has been recovered.


 


SECTION 6.11.                                         Priorities.  If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order:


 


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


 


SECOND: 
to holders of Senior Indebtedness of the Company to the extent required
by Article 10;


 


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


 


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FOURTH: to the Company or any other obligor
on the Notes or as a court of competent jurisdiction shall direct in writing.


 


The Trustee may fix a record date and payment
date for any payment to Holders pursuant to this Section 6.11.  At least 15 days before such record date, the
Trustee shall mail to each Holder and the Company a notice that states the
record date, the payment date and amount to be paid.


 


SECTION 6.12.                                         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 6.12 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in principal amount of the Notes.


 


SECTION 6.13.                                         Waiver
of Stay or Extension Law. 
Neither the Company nor any Guarantor (to the extent it may lawfully do
so) shall at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company and each Guarantor (to
the extent that it may lawfully do so) hereby expressly waive all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.


 


ARTICLE 7


 


TRUSTEE


 


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


 


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


 


(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


 


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Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of this
Indenture.


 


(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;


 


(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.


 


(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, if it shall
have reasonable grounds to believe that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.


 


(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 7.01 and to the provisions of the TIA.


 


SECTION 7.02.                                         Rights of
Trustee.


 


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


 


(b) 
Before the Trustee acts or refrains from acting, it may require an
Officer’s 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.


 


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


 


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


 


(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 reasonably satisfactory to it against the
costs, expenses and liabilities which might reasonably 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 an officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is received
by the Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Notes and this Indenture.


 


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


 


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


 


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


 


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


 


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


 


SECTION 7.07.                                         Compensation
and Indemnity. The Company 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 shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it in accordance with the provisions
of this Indenture, including costs of collection, in addition to the
compensation for its services, except for any such expenses as may be
attributable to its negligence, bad faith or willful misconduct.  Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee’s agents,
counsel, accountants and experts.  The
Company and each Guarantor, 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 or in connection with the
administration of this trust and the performance of its duties hereunder
without negligence, bad faith or willful misconduct.  The Trustee shall notify the Company of any
claim for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided, however, that any failure so to notify the
Company shall not relieve the Company or any Guarantor of its indemnity
obligations hereunder.  The Company shall
defend the claim and the indemnified party shall provide reasonable cooperation
at the Company’s expense in the defense of such claim.  Such indemnified parties may together have
one counsel at any time and the Company and the Guarantors, as applicable shall
pay the fees and expenses of such counsel; provided, however,
that the Company shall not be required to pay such fees and expenses if it
assumes such indemnified parties’ defense and, in such indemnified parties’
reasonable judgment, there is no conflict of interest between the Company and
the Guarantors, as applicable, and such parties in connection with such
defense.  The Company need not reimburse
any expense or indemnify against any loss, liability, claim, damage or expense
incurred by an indemnified party through such party’s own negligence, bad faith
or willful misconduct.


 


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To secure the Company’s payment obligations
in this Section, the Trustee shall have a lien prior to the Notes 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 Notes.


 


The Company’s payment obligations pursuant to
this Section shall survive the satisfaction or discharge of this
Indenture, any rejection or termination of this Indenture under any Bankruptcy
Law or the resignation or removal of the Trustee.  When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(i) or (j) 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 in writing.  The Holders of a majority in principal amount
of the Notes may remove the Trustee by so notifying the Trustee and may appoint
a successor Trustee.  The Company shall
remove the Trustee if:


 


(1)  the Trustee fails to comply with Section 7.10
or 7.11;


 


(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.


 


If the Trustee resigns, is removed by the
Company or by the Holders of a majority in principal amount of the Notes 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.


 


No resignation or removal of the Trustee and
no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of this Section 7.08.


 


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 principal amount of the Notes may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee.


 


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


 


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


 


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


 


In case at the time such successor or
successors by merger, conversion or consolidation to the Trustee shall succeed
to the trusts created by this Indenture any of the Notes 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 Notes
so authenticated with the same effect as if such successor Trustee had itself
authenticated the Notes, and in case at that time any of the Notes shall not
have been authenticated, any successor to the Trustee may authenticate such
Notes 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 as provided anywhere in the Notes or in this Indenture that the
certificate of the Trustee shall have.


 


SECTION 7.10.                                         Eligibility;
Disqualification.  The Trustee
shall at all times satisfy the requirements of Section 310(a) of the
TIA.  The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. 
The Trustee shall comply with Section 310(b) of the TIA; provided,
however, that there shall be excluded from the operation of
Section 310(b)(1) of the TIA 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
Section 310(b)(1) of the TIA are met.


 


SECTION 7.11.                                         Conflicting
Interests.  If the Trustee has
or shall acquire a conflicting interest within the meaning of the TIA, the
Trustee shall eliminate such interest, apply to the SEC for permission to
continue as Trustee with such conflict or resign, to the extent and in the
manner provided by, and subject to the provisions of, the TIA and this
Indenture.  To the extent permitted by
the TIA, the Trustee shall not be deemed to have a conflicting interest by
virtue of being a trustee under this Indenture with respect to Original Notes
and Additional Notes, or a trustee under any other indenture between the
Company and the Trustee.


 


SECTION 7.12.                                         Preferential
Collection of Claims Against Company.  The Trustee shall comply with
Section 311(a) of the TIA, excluding any creditor relationship listed in
Section 311(b) of the TIA.  A
Trustee who has resigned or been removed shall be subject
to Section 311(a) of the TIA to the extent indicated.  The Trustee herby waives any right to set-off
any claim that it may have against the Company in any capacity (other than as
Trustee and Paying Agent) against any of the assets of the Company held by the
Trustee; provided, however, that if the Trustee is or becomes a
lender of any other Indebtedness permitted hereunder to be Pari Passu with the
notes, then such waiver shall not apply to the extent of such Indebtedness.


 


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ARTICLE 8


 


DISCHARGE OF INDENTURE; DEFEASANCE


 


SECTION 8.01.                                         Satisfaction
and Discharge of Indenture. 
(a)  This Indenture shall, subject
to Section 8.01(c), cease to be of further effect as to all Notes issued
hereunder and the Trustee, on demand of and at the expense of the Company,
accompanied by an Officers’ Certificate and an Opinion of Counsel, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when either


 


(i) all Notes
that have been authenticated (except lost, stolen or destroyed Notes that have
been replaced or paid and Notes for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Company) have been delivered to
the Trustee for cancellation; or


 


(ii) (A) all
Notes that have not been delivered to the Trustee for cancellation have become
due and payable by reason of the making of a notice of redemption or otherwise
or will become due and payable within one year and the Company or any Guarantor
has irrevocably deposited or caused to be deposited with the Trustee as trust
funds in trust solely for the benefit of the Holders, Cash Equivalents,
Investment Grade Securities, or a combination thereof, in such amounts as will
be sufficient without consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and additional interest, if any, and
accrued interest to the date of maturity or redemption;


 


(B) no Event
of Default (other than one resulting solely from the borrowing of funds or the
granting of any Liens to provide such deposit) shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound;


 


(C) the Company
or any Guarantor has paid or caused to be paid all sums payable by it under
this Indenture; and


 


(D) the
Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at maturity
or the redemption date, as the case may be.


 


(b) Upon satisfaction of the conditions set
forth herein and upon request of the Company, the Trustee shall acknowledge in
writing the satisfaction and discharge of this Indenture.


 


(c) Notwithstanding clauses (a) and (b)
above, the Company’s obligations under Sections 2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.10, 7.07, 7.08 and this Article 8 shall survive until the Notes
have been paid in full.  Thereafter, the
Company’s obligations in Sections 7.07, 8.04 and 8.05 shall survive such
satisfaction and discharge.


 


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SECTION 8.02.                                         Legal
and Covenant Defeasance; Conditions to Defeasance.


 


(a) 
Subject to Section 8.01(c), the Company at any time may terminate
(i) all of its obligations under the Notes 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, 4.12 and 4.13, the operation of 6.01(f), 6.01(g)
and 6.01(h) (with respect to Subsidiaries of the Company only), and the
judgment default provision specified in Section 6.01(i) and the
limitations specified in Section 5.01(a)(iv)  (“covenant defeasance option”).  The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance
option.  In the event that the Company
exercises either its legal defeasance option or its covenant defeasance option,
each Guarantor will be released from all its obligations with respect to its
Guarantee.


 


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


 


(b) 
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:


 


(1)  the Company irrevocably deposits or causes to
be deposited in trust with the Trustee money or U.S. Government Obligations for
the payment of principal, premium (if any) and interest on the Notes to
redemption or maturity, as the case may be;


 


(2)  the Company delivers to the Trustee an
Opinion of Counsel to the effect that holders of the Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
deposit and defeasance and will be subject to U.S. federal income tax on the
same amount and in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred (and, in the case of legal
defeasance only, such Opinion of Counsel must be based on a ruling of the IRS
or other change in applicable U.S. federal income tax law);


 


(3)  on the date or dates the respective amounts
were paid into the trust, such payments were made with respect to the Notes
without violating the subordination provisions of this Indenture or any other
material agreement binding on the Company, including the Credit Agreement; and


 


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


 


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


 


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The Trustee shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to this Article 8.  It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on
the Notes.  Subject to Sections 10.03 and
10.04, money and securities so held in trust are not subject to
Article 10.


 


SECTION 8.03.                                         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 written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years, and, thereafter, Securityholders entitled to
the money must look to the Company for payment as general creditors.


 


SECTION 8.04.                                         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 8.05.                                         Reinstatement.  If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company’s obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to this Article 8 until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the Company has made any
payment of interest on or principal of any Notes because of the reinstatement
of its obligations, the Company shall be subrogated to the rights of the
Holders of such Notes to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.


 


ARTICLE 9


 


AMENDMENTS


 


SECTION 9.01.                                         Without
Consent of Holders.  The
Company and the Trustee may amend this Indenture or the Notes without consent
of any Holder to:


 


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


 


(2)  provide for the assumption by a successor
corporation, partnership, limited liability company or other entity of the
obligations of the Company under this Indenture;


 


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(3)  provide for uncertificated Notes in addition
to or in place of Physical Notes; provided that the uncertificated Notes
are issued in registered form for purposes of Section 163(f) of the
Internal Revenue Code or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Internal Revenue Code;


 


(4)  make any change in Article 10 or
Article 12 that would limit or terminate the benefits available to any
holder of Senior Indebtedness (or Representatives therefor) under
Article 10 or Article 12;


 


(5)  add Guarantees with respect to the Notes;


 


(6)  secure the Notes;


 


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


 


(8)  make any change that does not adversely
affect the legal rights under this Indenture of any Holder to comply with any
requirement of the SEC or in connection with the qualification of this
Indenture under the TIA; or


 


(9)  enter into one or more supplemental
indentures to effect any of the amendments set forth herein or to set forth the
terms of and issue any Additional Notes in accordance with the provisions of
this Indenture.


 


Notwithstanding the foregoing, an amendment
under this Section 9.01 may not make any change that adversely affects the
rights under Article 10 or Article 12 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any group or representative thereof authorized to give a consent) consent
to such change.


 


SECTION 9.02.                                         With
Consent of Holders.  The
Company, the Guarantors and the Trustee may amend this Indenture or the Notes
with the written consent of the Holders of at least a majority in aggregate
principal amount of the Notes of all series affected by such amendment then
outstanding.


 


Without the consent of each Holder affected,
an amendment or waiver may not:


 


(1)  reduce the amount of Notes whose Holders must
consent to an amendment;


 


(2)  reduce the rate of or extend the time for
payment of interest on any Note, or amend the Company’s right to defer interest
on the Notes in a manner adverse to the Holders;


 


(3)  reduce the principal of or extend the Stated
Maturity of any Note;


 


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


 


(5)  make any Note payable in money other than
that stated in the Note;


 


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


 


(7)  impair the right of any Holder to receive
payment of principal of, premium, if any, and interest on such Holder’s Notes
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 Notes;


 


(8)  except in connection with an offer by the
Company to purchase all of the Notes (in which case a majority in principal
amount of Notes will be sufficient)


 


(A)                              make
any change to the provisions of Section 4.05 of this Indenture that
eliminate the prohibition on paying dividends while interest is being deferred,
while any previously Deferred Interest remains unpaid or during a Dividend
Suspension Period or the continuance of any Event of Default;


 


(B)                                make
a change to lower the Interest Coverage Ratio threshold for a Dividend
Suspension Period or make a change to paragraph (c) of Section 4.04 that
would have the effect of increasing the amounts permitted to be distributed in
respect of the Company’s Capital Stock;


 


(C)                                waive
an Event of Default under Section 6.01(k); or


 


(9)  make any change in the amendment provisions
which require each Holder’s consent or in the waiver provisions; or


 


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


 


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


 


Notwithstanding the foregoing, an amendment
or waiver under this Section 9.02 may not make any change that adversely
affects the rights under Article 10 or Article 12 of any holder of
Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any group or representative thereof authorized to give a consent) consent
in writing to such change.


 


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SECTION 9.03.                                         Notice to
Holders.  After an amendment
or waiver under this Section becomes effective, the Company shall mail to
Holders, a notice briefly describing such amendment or waiver.  The failure to give such notice to all
Holders, or any defect therein, shall not in any way impair or affect the
validity or effectiveness of an amendment or waiver under this Article 9.


 


SECTION 9.04.                                         Compliance
with Trust Indenture Act. 
Every amendment to this Indenture or the Notes shall comply with the TIA
as then in effect.


 


SECTION 9.05.                                         Revocation
and Effect of Consent and Waivers. 
A consent to an amendment or a waiver by a Holder of a Note shall bind
the Holder and every subsequent Holder of that Note or portion of the Note that
evidences the same debt as the consenting Holder’s Note, even if notation of
the consent or waiver is not made on the Note. 
However, any such Holder or subsequent Holder may revoke the consent or
waiver as to such Holder’s Note or portion of the Note if the Trustee receives
the notice of revocation before the date on which the Trustee receives an
Officers’ Certificate from the Company certifying that the requisite number of
consents has been received.  After an
amendment or waiver becomes effective, it shall bind every Holder.  An amendment or waiver becomes effective upon
the (i) receipt by the Company or the Trustee of the requisite number of
consents, (ii) satisfaction of conditions to effectiveness as set forth in this
Indenture and an indenture supplemental hereto containing such amendment or
waiver, (iii) execution of such amendment or waiver (or supplemental indenture)
by the Company and the Trustee and (iv) any other conditions thereto specified
in the notice thereto.


 


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.


 


SECTION 9.06.                                         Notation
on or Exchange of Notes.  If
an amendment changes the terms of a Note, the Trustee may (if required by the
Company and in accordance with specific directions of the Company) require the
Holder of the Note to deliver it to the Trustee.  The Trustee may place an appropriate notation
on the Note regarding the changed terms and return it to the Holder.  Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.  Failure to make the appropriate notation or
to issue a new Note shall not affect the validity of such amendment.


 


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SECTION 9.07.                                         Trustee
To Sign Amendments.  The
Trustee shall sign any amendment authorized pursuant to this Article 9 if
the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee.  If it does,
the Trustee may but need not sign it.  In
signing such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it, shall be provided with, and (subject to
Section 7.01) shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture and that such amendment is the legal, valid and
binding obligation of the Company and the Guarantors enforceable against them
in accordance with its terms, subject to customary exceptions, and complies
with the provisions hereof (including Section 9.03).


 


SECTION 9.08.                                         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 Indenture or the Notes 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 10


 


SUBORDINATION


 


SECTION 10.01.                                   Agreement
To Subordinate.  The Company
agrees, and each Holder by accepting a Note agrees, that the Indebtedness
evidenced by the Notes and all other amounts payable under the Notes or this
Indenture are subordinated in right of payment, to the extent and in the manner
provided in this Indenture, to the prior payment in full in cash of all
existing and future Senior Indebtedness of the Company, and that the
subordination is for the benefit of and enforceable by the holders of Senior
Indebtedness.


 


SECTION 10.02.                                   Liquidation,
Dissolution or Bankruptcy. 
Upon any payment or distribution of the assets of the Company upon a
total or partial liquidation or dissolution, bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, or an assignment for the benefit of its creditors or any marshalling
of the Company’s assets or liabilities, the holders of Senior Indebtedness
shall be entitled to receive payment in full in cash of all the Senior
Indebtedness before Holders are entitled to receive any payment, and until the
Senior Indebtedness of the Company is paid in full in cash, any payment or
distribution to which Holders would be entitled but for this Article 10
shall be made to holders of the Senior Indebtedness as their interests may
appear.


 


SECTION 10.03.                                   Default
on Designated Senior Indebtedness.


 


(a) 
The Company may not pay principal of, premium (if any) or interest on,
the Notes or any other payment on or relating to the Notes or under this
Indenture, or make any deposit pursuant to Section 8.01 and may not
otherwise purchase, redeem or otherwise retire any Notes (except that Holders
may receive and retain (a) Permitted Junior Securities and (b)


 


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payments made from the trust described in Section 8.01 so long as,
on the date or dates the respective amounts were paid into the trust, such
payments were made with respect to the Notes without violating this
Article 10 or any other material agreement binding on the Company,
including the Credit Agreement) (collectively, “pay the Notes”) if (i) a
default in the payment of the principal of, premium, if any, or interest on any
Designated Senior Indebtedness of the Company occurs and is continuing or any
other amount owing in respect of any Designated Senior Indebtedness is not paid
when due, or (ii) any other default on any Designated Senior Indebtedness of
the Company occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the
default has been cured or waived and any such acceleration has been rescinded
or (y) such Designated Senior Indebtedness has been paid in full in cash.  However, the Company may pay the Notes
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of each series of the Designated
Senior Indebtedness with respect to which either of the events in clause (i) or
(ii) of the immediately preceding sentence has occurred and is continuing. In
addition to the foregoing, during the continuance of any default (other than a
default described in clause (i) or (ii) of the second preceding sentence) with
respect to any Designated Senior Indebtedness pursuant to which the maturity
thereof may be accelerated (x) immediately without further notice (except such
notice as may be required to effect such acceleration) or (y) upon the expiration
of any applicable grace periods, the Company may not pay the Notes for a period
(a “Payment Blockage Period”) commencing upon the receipt by the Trustee (with
a copy to the Company) of written notice (a “Blockage Notice”) of such default
from the Representative of such defaulted Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period and ending on the
earliest to occur of the following events: (1) 179 days shall have elapsed
since the receipt of such Blockage Notice; (2) such Payment Blockage Period is
terminated by written notice to the Trustee and the Company from the Person or
Persons who gave such Blockage Notice; (3) the repayment in full in cash of
such defaulted Designated Senior Indebtedness; or (4) the default giving rise
to such Blockage Notice is no longer continuing.  Notwithstanding the provisions described in
the immediately preceding sentence (but subject to the provisions contained in
the first sentence of this Section 10.03 and in Section 10.02), unless
the holders of such defaulted Designated Senior Indebtedness or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness, the Company may resume payments on the Notes,
after the end of such Payment Blockage Period. 
In no event may the total number of days during which any Payment
Blockage Period or Periods is in effect exceed 179 days in the aggregate during
any 360 consecutive day period. For purposes of this provision, no default or
event of default that existed or was continuing on the date of the commencement
of any Payment Blockage Period with respect to the Designated Senior
Indebtedness initiating such Payment Blockage Period shall be, or be made, the
basis of the commencement of a subsequent Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, unless such default or
event of default shall have been cured or waived for a period of not less than
90 consecutive days.


 


(b) 
After the occurrence of an Event of Default, the Company or the Trustee
shall promptly notify the holders of each series of the Designated Senior
Indebtedness (or their respective Representative) of such occurrence.  If any Designated Senior Indebtedness is
outstanding, the Company may not make any payments then due on the Notes until
five Business Days after the holders or the Representative of such Designated
Senior Indebtedness receives


 


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notice of such occurrence and, thereafter, may pay the Notes only if
the provisions of this Article 10 otherwise permit payment at that time.


 


SECTION 10.04.                                   When
Distribution Must Be Paid Over. 
If a payment or distribution is made to Holders that due to this
Article 10 should not have been made to them, such Holders shall hold it
in trust for the holders of Senior Indebtedness and pay it over to them as
their interests may appear (except that Holders may receive and retain (i)
Permitted Junior Securities and (ii) payments made from the trust pursuant to
Section 8.01 so long as, on the date or dates the respective amounts were
paid into the trust, such payments were made with respect to the Notes without
violating this Article 10 or any other material agreement binding on the
Company, including the Credit Agreement).


 


SECTION 10.05.                                   Subrogation.  After all Senior Indebtedness of the Company
is paid in full in cash and until the Notes are paid in full in cash, Holders
shall be subrogated to the rights of holders of Senior Indebtedness of the
Company to receive distributions applicable to Senior Indebtedness.  A distribution made under this
Article 10 to holders of Senior Indebtedness of the Company which
otherwise would have been made to Holders is not, as between the Company and
Holders, a payment by the Company on its Senior Indebtedness.


 


SECTION 10.06.                                   Relative Rights.  This Article 10 defines the relative
rights of Holders and holders of Senior Indebtedness of the Company. Nothing in
this Indenture shall:


 


(1)  impair, as between the Company and Holders,
the obligation of the Company which is absolute and unconditional, to make
payments with respect to principal of and interest on the Notes; or


 


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


 


SECTION 10.07.                                   Subordination
May Not Be Impaired by the Company. 
No right of any holder of Senior Indebtedness of the Company to enforce
the subordination of the Indebtedness evidenced by the Notes shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.


 


SECTION 10.08.                                   Right
of Trustee and Paying Agent. 
Notwithstanding Section 10.03, the Trustee or the Paying Agent may
continue to make payments on the Notes and shall not be charged with knowledge
of the existence of facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives notice satisfactory to it that such
payments may not be made under this Article 10.  The Company, the Registrar or co-registrar,
the Paying Agent, a Representative or a holder of Senior Indebtedness of the Company
may give the notice; provided, however, that if an issue of
Senior Indebtedness of the Company has a Representative, only the
Representative may give the notice.


 


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Notwithstanding the other provisions of this
Indenture, if the Trustee or the Paying Agent holds or receives any payment or
distribution in respect of any Obligations with respect to the Notes at a time
when the Trustee or the Paying Agent, as applicable, has actual knowledge that
such payment or distribution is prohibited by this Article 10, the Trustee
or the Paying Agent, as applicable, shall hold it in trust for the holders of
Senior Indebtedness and pay it over to them as their interest may appear.


 


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


 


SECTION 10.09.                                   Distribution
or Notice to Representative. 
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness of the Company, the distribution may be made and the notice
given to their Representative (if any).


 


SECTION 10.10.                                   Article 10
Not To Prevent Events of Default or Limit Right To Accelerate.  The failure to make a payment pursuant to the
Notes by reason of any provision in this Article 10 shall not be construed
as preventing the occurrence of a Default. 
Except as otherwise provided in Section 10.04, nothing in this
Article 10 shall have any effect on the right of the Holders or the
Trustee to accelerate the maturity of the Notes.


 


SECTION 10.11.                                   Trust
Moneys Not Subordinated. 
Subject to Sections 10.03 and 10.04, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the
Trustee for the payment of principal of and interest on the Notes shall not be
subordinated to the prior payment of any Senior Indebtedness of the Company or
subject to the restrictions set forth in this Article 10, and none of the
Securityholders shall be obligated to pay over any such amount to the Company
or any holder of Senior Indebtedness of the Company or any other creditor of
the Company.


 


SECTION 10.12.                                   Trustee
Entitled To Rely.  Upon any
payment or distribution pursuant to this Article 10, the Trustee and the
Holders shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 10.02 are pending, (ii) upon a certificate of the liquidating trustee
or agent or other Person making such payment or distribution to the Trustee or
to the Holders or (iii) upon the Representatives for the holders of Senior
Indebtedness of the Company for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Indebtedness and other Indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 10.  In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness of the Company to participate in any payment
or distribution pursuant to this Article 10, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of such Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and
other facts pertinent to the rights of


 


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such Person under this Article 10, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.  The provisions of Sections 7.01 and 7.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article 10.


 


SECTION 10.13.                                   Trustee
To Effectuate Subordination. 
Each Holder by accepting a Note authorizes and directs the Trustee on
such Holder’s behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holders and the holders
of Senior Indebtedness of the Company as provided in this Article 10 and
appoints the Trustee as attorney-in-fact for any and all such purposes.


 


SECTION 10.14.                                   Trustee
Not Fiduciary for Holders of Senior Indebtedness.  The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Company and shall
not be liable to any such holders if it shall mistakenly pay over or distribute
to Holders or the Company or any other Person, money or assets to which any
holders of Senior Indebtedness of the Company shall be entitled by virtue of
this Article 10 or otherwise.


 


SECTION 10.15.                                   Reliance
by Holders of Senior Indebtedness on Subordination Provisions.  Each Holder, by accepting a Note,
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of the Company, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Notes, to acquire and
continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of such Senior Indebtedness shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.


 


SECTION 10.16.                                   Defeasance.  The terms of this Article 10 shall not
apply to payments from money or the proceeds of U.S. Government Obligations
held in trust by the Trustee pursuant to Article 8 for the payment of
principal of and interest on the Notes pursuant to the provisions described in
Section 8.02.


 


ARTICLE 11


 


GUARANTEES


 


SECTION 11.01.                                   Guarantee.  (a) 
Each Guarantor hereby jointly and severally fully and unconditionally
guarantees to each Holder and to the Trustee and its successors and assigns the
performance and punctual payment when due, whether at Stated Maturity, by
acceleration or otherwise, of all obligations of the Company under this
Indenture and the Notes, whether for payment of principal of, premium, if any,
or interest on, the Notes, expenses, indemnification or otherwise (all the
foregoing being hereinafter collectively called the “Guaranteed
Obligations”).  Each Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed, in whole or
in part, without notice or further assent from each such Guarantor, and that
each such Guarantor shall remain bound under this Article 11
notwithstanding any extension or renewal of any Guaranteed Obligation.


 


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


 


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


 


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


 


The Guarantee of each Guarantor is, to the
extent and in the manner set forth in Article 12, subordinated and subject
in right of payment to the prior payment in full in cash of all Senior
Indebtedness of the relevant Guarantor and is made subject to such provisions
of this Indenture.


 


Except as expressly set forth in Sections
8.01(b), 11.02 and 11.06, the obligations of each Guarantor hereunder shall not
be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Guaranteed Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of any Guarantor or would
otherwise operate as a discharge of any Guarantor as a matter of law or equity.


 


Each Guarantee is a continuing guarantee and
shall until released in accordance with the next succeeding paragraph:


 


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(1)  remain in full force and effect until payment
in full of all the Guaranteed Obligations;


 


(2)  be binding upon each such Guarantor and its
successors; and


 


(3)  inure to the benefit of and be enforceable by
the Trustee, the Holders and their successors, transferees and assigns.


 


Each Guarantor further agrees that its
Guarantee herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of or
interest on any Guaranteed Obligation is rescinded or must otherwise be
restored by any Holder or the Trustee upon the bankruptcy or reorganization of
the Company or otherwise.


 


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


 


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


 


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


 


(e) 
Each Guarantor that makes a payment or distribution under its Guarantee
shall have the right to seek contribution from the Company or any non-paying
Guarantor that has also Guaranteed the relevant Guaranteed Obligations in
respect of which such payment or distribution is made, so long as the exercise
of such right does not impair the rights of the Holders under the Guarantees.


 


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(f) 
Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and
that its Guarantee is knowingly made in contemplation of such benefits.


 


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


 


SECTION 11.02.                                   Limitation
on Liability.                                                 (a)  Any term or provision of this Indenture to
the contrary notwithstanding, the maximum, aggregate amount of the Guaranteed
Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum
amount that, after giving effect to all other contingent and fixed liabilities
of such Guarantor (including, without limitation, all of its obligations with
respect to the Credit Agreement) and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to its
contribution obligations under this Indenture, can be hereby guaranteed without
rendering this Indenture or the Guarantee, as it relates to such Guarantor,
voidable or unenforceable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally. After the Issue Date, the Company will cause each
Restricted Subsidiary that guarantees any Indebtedness under any Senior Credit
Document and each Restricted Subsidiary that the Company shall otherwise cause
to become a Guarantor pursuant to the terms of this Indenture, to execute and
deliver to the Trustee a supplemental indenture pursuant to which such Restricted
Subsidiary will guarantee payment of the Notes on an unsecured senior
subordinated basis.


 


(b)  A
Guarantee as to any Guarantor that is a Subsidiary of the Company shall
terminate and be of no further force or effect and such Guarantor shall be
deemed to be released from all obligations under this Article 11; provided
that at the time of such release, no Default or Event of Default has occurred
and is continuing, upon: (i) the sale or disposition (by merger or otherwise)
of such Guarantor, following which such Guarantor is no longer a Restricted
Subsidiary of the Company; provided, however, that each such sale
or disposition shall comply with this Indenture (including Section 4.06
and Section 5.01(b)); (ii) the merger or consolidation of such Guarantor
with and into the Company or another Guarantor that is the surviving Person of
such merger or consolidation; or (iii) upon legal defeasance of the Company’s
and all Guarantors’ obligations under this Indenture or satisfaction and
discharge of this Indenture, in each case, in accordance with the provisions of
this Indenture. Upon any such occurrence specified in this Section 11.02,
the Trustee shall execute and deliver an appropriate instrument evidencing such
release.


 


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


 


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SECTION 11.04.                                   No Waiver.  Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege.  The
rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or benefits
which either may have under this Article 11 at law, in equity, by statute
or otherwise.


 


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


 


SECTION 11.06.                                   Execution
of Supplemental Indenture for Future Guarantors.  Each Subsidiary which is required to become a
Guarantor pursuant to Section 4.12 hereof shall execute and deliver to the
Trustee a supplemental indenture substantially in the form of Exhibit B
hereto pursuant to which such Subsidiary shall become a Guarantor under this
Article 11 and shall guarantee the Guaranteed Obligations.  Concurrently with the execution and delivery
of such supplemental indenture, the Company shall deliver to the Trustee an
Opinion of Counsel and an Officers’ Certificate to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such
Subsidiary and that, subject to the application of bankruptcy, insolvency,
moratorium, fraudulent conveyance or transfer and other similar laws relating
to creditors’ rights generally and to the principles of equity, whether
considered in a proceeding at law or in equity, the Guarantee of such Guarantor
is a legal, valid and binding obligation of such Guarantor, enforceable against
such Guarantor in accordance with its terms.


 


SECTION 11.07.                                   Notation
Not Required.  Neither the
Company nor any Guarantor shall be required to make a notation on the Notes to
reflect any Guarantee or any such release, termination or discharge thereof.


 


ARTICLE 12

SUBORDINATION OF THE GUARANTEES


 


SECTION 12.01.                                   Agreement
To Subordinate.  Each
Guarantor agrees, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by each Guarantee and all other amounts payable under
each Guarantee are subordinated in right of payment, to the extent and in the
manner provided in this Indenture, to the prior payment in full in cash of all
existing and future Senior Indebtedness of such Guarantor (including, without
limitation, the Senior Indebtedness of each Guarantor represented by such
Guarantor’s guarantee of Obligations under the Credit Agreement), and that the
subordination is for the benefit of and enforceable by the holders of Senior
Indebtedness.


 


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


 


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bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to such Guarantor or its property, or an assignment for the
benefit of its creditors or any marshalling of the Guarantor’s assets or
liabilities, the holders of Senior Indebtedness of such Guarantor shall be
entitled to receive payment in full in cash of all such Senior Indebtedness of
such Guarantor before Holders are entitled to receive any payment under any
Guarantee, and until the Senior Indebtedness of such Guarantor is paid in full
in cash, any payment or distribution to which Holders would be entitled but for
this Article 12 shall be made to holders of such Senior Indebtedness of
such Guarantor as their interests may appear.


 


SECTION 12.03.                                   Default
on Designated Senior Indebtedness of a Guarantor.


 


(a)  A
Guarantor may not make any payment pursuant to any of the Guaranteed
Obligations and may not otherwise purchase, redeem or otherwise retire any
Notes (collectively, “pay its Guarantee”) if (i) a default in the payment of
the principal of, premium, if any, or interest on any Designated Senior
Indebtedness of such Guarantor occurs and is continuing or any other amount
owing in respect of any Designated Senior Indebtedness of such Guarantor is not
paid when due, or (ii) any other default on Designated Senior Indebtedness of
such Guarantor occurs and the maturity of such Designated Senior Indebtedness
is accelerated in accordance with its terms unless, in either case, (x) the
default has been cured or waived and any such acceleration has been rescinded
or (y) such Designated Senior Indebtedness has been paid in full in cash.  However, such Guarantor may pay its Guarantee
without regard to the foregoing if such Guarantor and the Trustee receive
written notice approving such payment from the Representative of each series of
the Designated Senior Indebtedness with respect to which either of the events
in clause (i) or (ii) of the immediately preceding sentence has occurred and is
continuing. In addition to the foregoing, during the continuance of any default
(other than a default described in clause (i) or (ii) of the second preceding
sentence) with respect to any Designated Senior Indebtedness of a Guarantor
pursuant to which the maturity thereof may be accelerated (x) immediately
without further notice (except such notice as may be required to effect such
acceleration) or (y) upon the expiration of any applicable grace periods, no
Guarantor may pay its Guarantee for a period (a “Guarantee Payment Blockage
Period”) commencing upon the receipt by the Trustee (with a copy to the
Company) of written notice (a “Guarantee Blockage Notice”) of such default from
the Representative of such Designated Senior Indebtedness specifying an
election to effect a Guarantee Payment Blockage Period and ending on the
earliest to occur of the following events: (1) 
179 days shall have elapsed since the receipt of such Guarantee Blockage
Notice; (2) such Guarantee Payment Blockage Period is terminated by written
notice to the Trustee and the Company from the Person or Persons who gave such
Guarantee Blockage Notice; (3) the repayment in full in cash of such defaulted
Designated Senior Indebtedness; or (4) the default giving rise to such
Guarantee Blockage Notice is no longer continuing. Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section 12.03 and in
Section 12.02), unless the holders of such Designated Senior Indebtedness
or the Representative of such holders shall have accelerated the maturity of
such Designated Senior Indebtedness, such Guarantor may resume payment on its
Guarantee, after the end of such Guarantee Payment Blockage Period.  In no event may the total number of days
during which any Guarantee Payment Blockage Period or Periods is in effect
exceed 179 days in the aggregate during any 360 consecutive day period. For
purposes of this provision, no default or event of default that existed or was
continuing on the date of the commencement of any Guarantee Payment Blockage
Period


 


89





















 


with respect to the Designated Senior Indebtedness initiating such
Guarantee Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Guarantee Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, unless such default or
event of default shall have been cured or waived for a period of not less than
90 consecutive days.


 


(b) 
After the occurrence of an Event of Default, the Company or the Trustee
shall promptly notify the holders of the Designated Senior Indebtedness (or
their Representative) of such occurrence. 
If any Designated Senior Indebtedness is outstanding, a Guarantor may
not make any payments pursuant to any of the Guaranteed Obligations until five
Business Days after the holders or the Representative of such Designated Senior
Indebtedness receives notice of such occurrence and, thereafter, may pay the
Notes only if the provisions of this Article 12 otherwise permit payment
at that time.


 


SECTION 12.04.                                   Demand for
Payment.  After the occurrence
of an Event of Default and a demand for payment is made on a Guarantor pursuant
to Article 11, the Trustee shall promptly notify the holders of the
Designated Senior Indebtedness (or the Representative of such holders) of such
occurrence.


 


SECTION 12.05.                                   When
Distribution Must Be Paid Over. 
If a payment or distribution is made to Holders that due to this
Article 12 should not have been made to them, such Holders shall hold it
in trust for the holders of Senior Indebtedness of such Guarantor and pay it
over to them as their interests may appear (except that Holders may receive and
retain (i) Permitted Junior Securities and (ii) payments made from the trust
pursuant to Section 8.01 so long as, on the date or dates the respective
amounts were paid into the trust, such payments were made with respect to the
Notes without violating this Article 12 or any other material agreement
binding on the Company, including the Credit Agreement).


 


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


 


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


 


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


 


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


 


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


 


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


 


Notwithstanding the other provisions of this
Indenture, if the Trustee or the Paying Agent holds or receives any payment or
distribution in respect of any Obligations with respect to the Notes at a time
when the Trustee or the Paying Agent, as applicable, has actual knowledge that
such payment or distribution is prohibited by this Article 12, the Trustee
or the Paying Agent, as applicable, shall hold it in trust for the holders of
Senior Indebtedness and pay it over to them as their interest may appear.


 


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


 


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


 


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


 


SECTION 12.12.                                   Trustee
Entitled To Rely.  Upon any
payment or distribution pursuant to this Article 12, the Trustee and the
Holders shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 12.02 are pending, (ii) upon a certificate of the liquidating
trustee or agent or other Person making such payment or distribution to the Trustee
or to the Holders or (iii) upon the


 


91





















 


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


 


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


 


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


 


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


 


SECTION 12.16.                                   Defeasance.  The terms of this Article 12 shall not
apply to payments from money or the proceeds of U.S. Government Obligations
held in trust by the Trustee pursuant to Article 8 for the payment of
principal of and interest on the Notes pursuant to Section 8.02.


 


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ARTICLE 13


 


MISCELLANEOUS


 


SECTION 13.01.                                   Trust
Indenture Act Controls.  If
any provision of this Indenture limits, qualifies or conflicts with another
provision which is required to be included in this Indenture by the TIA, the
required provision shall control.


 


SECTION 13.02.                                   Notices.  Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:


 


if to the Company or any Guarantor c/o:


 


Otelco Inc.


505 Third Avenue East


Oneonta, Alabama 35121


 


Attention: Michael D. Weaver


 


With a copy to:


 


Richard A Boehmer, Esq.


O’Melveny & Myers LLP


400 South Hope Street


Los Angeles, California 90071


 


if to the Trustee:

Wells Fargo Bank, National Association

Corporate Trust Services

Sixth Street & Marquette Avenue

Minneapolis, MN 55479


 


Attention: 
Otelco Administrator


 


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


 


93





















 


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


 


SECTION 13.04.                                   Certificate
and Opinion as to Conditions Precedent.  After the date of this Indenture, 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)                                  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.


 


SECTION 13.05.                                   Statements
Required in Certificate or Opinion. 
Each certificate or opinion with respect to compliance with a covenant
or condition provided for in this Indenture, except for certificates provided
for in Section 4.10, shall include:


 


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


 


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


 


(3)  a statement that, in the opinion of such
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


 


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


 


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


 


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


 


94





















 


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


 


SECTION 13.09.                                   Governing Law.
 THIS
INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.  THE
TRUSTEE, THE COMPANY, ANY OTHER OBLIGOR IN RESPECT OF THE NOTES AND (BY THEIR
ACCEPTANCE OF THE NOTES) THE HOLDERS AGREE TO SUBMIT TO THE JURISDICTION OF ANY
UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN
THE CITY OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS INDENTURE OR THE NOTES.


 


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


 


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


 


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


 


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


 


95





















 


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


 


	
   

  	
  OTELCO INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
  Title: 
  President

  
	
   

  	
   

  
	
   

  	
  OTELCO TELECOMMUNICATIONS LLC (as Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OTELCO TELEPHONE LLC

  
	
   

  	
  (as Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOPPER HOLDING COMPANY, INC.

  
	
   

  	
  (as Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOPPER TELECOMMUNICATIONS

  COMPANY, INC. (as Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  President

  



 


[Indenture
Signature Page]


 





















 


	
   

  	
  BRINDLEE HOLDINGS LLC

  
	
   

  	
  (as Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRINDLEE MOUNTAIN TELEPHONE

  COMPANY (as Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PAGE & KISER COMMUNICATIONS, INC. (as
  Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLOUNTSVILLE TELEPHONE COMPANY INC.

  (as Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  President

  
	
   

  	
   

  
	
   

  	
  MID-MISSOURI HOLDING CORP. (as

  Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  Chief Executive Officer

  



 





















 


	
   

  	
  IMAGINATION, INC. (as Guarantor)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Weaver

  
	
   

  	
   

  	
  Name: 
  Michael D. Weaver

  
	
   

  	
   

  	
  Title: 
  Chief Executive Officer

  



 





















 


	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Rose

  
	
   

  	
  Name: 
  Jeffrey Rose

  
	
   

  	
  Title: 
  Corporate Trust Officer

  



 





















 


EXHIBIT A


Part I


 


[FORM
OF DEPOSITORY NOTE]


 


[Global Note 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 NOTE 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 NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.


 


THE COMPANY MAY SUBSEQUENTLY ISSUE NOTES THAT ARE IDENTICAL IN ALL
MATERIAL RESPECTS TO THIS NOTE BUT HAVE ORIGINAL ISSUE DISCOUNT.  IN SUCH CASE, THE HOLDER OF THIS NOTE WILL
EXCHANGE A PORTION OF HIS NOTES FOR SUCH NEWLY ISSUED NOTES WITH ORIGINAL ISSUE
DISCOUNT.  THE AGGREGATE PRINCIPAL AMOUNT
OF NOTES OWNED BY SUCH HOLDER, HOWEVER, WILL NOT CHANGE AS A RESULT OF SUCH
EXCHANGE.  AFTER ISSUANCE OF ANY SUCH
NOTES WITH ORIGINAL DISCOUNT, A HOLDER MAY OBTAIN THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, THE ISSUE PRICE AND THE YIELD TO MATURITY BY
SUBMITTING A WRITTEN REQUEST TO THE COMPANY AT 505 THIRD AVENUE EAST, ONEONTA,
ALABAMA 35121, ATTN:  CHIEF FINANCIAL
OFFICER.


 





















 


	
  No. 

  	
   

  	
  $

  



 


13% Senior Surbordinated Note
due 2019


 


CUSIP No.
                   


 


OTELCO INC., a Delaware corporation, promises
to pay to Cede & Co., or registered assigns, the principal sum [of      Dollars]  [listed
on the Schedule of Increases or Decreases in Global Note attached hereto](1)
on December 30, 2019.


 


Interest Payment Dates:


 


Record
Dates:                     .


 










(1)                                  Use
the Schedule of Increases and Decreases language for a Global Note.


 





















 


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


 


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


 


	
   

  	
  OTELCO INC.

  
	
   

  	
   

  
	
   

  	
   By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  	
   

  
	
  AUTHENTICATION

  	
   

  
	
  WELLS FARGO BANK, NATIONAL ASSOCIATION,

  	
   

  
	
  as Trustee,
  certifies that this is one of

  	
   

  
	
  the Notes
  referred to in the Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  
						



 





















 


[FORM
OF REVERSE SIDE OF NOTE]


 


13% Senior Subordinated Note
due 2019


 


Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Indenture (as defined).


 


1.               Interest;
Extension of Maturity


 


Otelco Inc., 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 13% senior surbordinated note due 2019 (the
“Note”) at the rate per annum shown above. 
The Company shall pay interest from December 21, 2004 or from the
most recent date to which interest has been paid or provided for, payable
quarterly in arrears on March 30, June 30, September 30 and December 30,
to Holders of record at the close of business on the 15th day of
such month, commencing March 30, 2005, provided that if any such
day is not a Business Day, such day shall be the next Business Day, and no
interest on such payment shall accrue for the period from and after such
interest payment date.


 


Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.


 


Prior to December 30, 2009, the Company
may, at its election, defer interest payments on the Notes on one or more
occasions for not more than eight quarters in the aggregate (any such period,
an “Initial Interest Deferral Period”); provided that (1) at the end of each
occasion, the Company will be obligated to resume quarterly payments of
interest on the Notes including interest on deferred interest; and (2) no later
than December 30, 2009, the Company must pay in full all deferred
interest, together with accrued interest thereon.


 


In addition, after December 30, 2009 the
Company may, at its election, defer interest payments on the Notes on up to
four occasions with respect to up to two quarters per occasion (each such
occasion together with the Initial Interest Deferral Period, an “Interest
Deferral Period”); provided that (1) the Company may not defer interest on any
occasion after December 30, 2009 unless and until all interest deferred on
any prior occasion, together with accrued interest thereon, has been paid in
full; (2) at the end of each occasion, the Company will be obligated to resume
quarterly payments of interest on the Notes including interest on deferred
interest; and (3) no later than December 30, 2019, the Company must pay
all deferred interest, together with accrued interest thereon.


 


On each occasion that the Company elects to
defer interest, it will be required to deliver to the Trustee a copy of a
resolution of the Company’s Board of Directors to the effect that, based upon a
good-faith determination of the Company’s Board of Directors, (x) such interest
deferral is reasonably necessary for bona-fide cash management purposes,
whether indicated by cumulative distributable cash shortfall or otherwise, or
to reduce the likelihood of or avoid a payment default under any Designated
Senior Indebtedness or (y) as long the Credit Agreement remains in effect, the
Company has failed to maintain a fixed charge coverage ratio of at least
1.15:1:00 or a senior leverage ratio of not more than 3.20 to 1.00, in each
case, as calculated in


 


96





















 


accordance with the provisions contained in the Credit Agreement the
date hereof, irrespective of any subsequent changes to the Credit Agreement;
provided no such deferral may be commenced, and any ongoing deferral shall cease,
if a default in payment of interest, principal or premium, if any, on the Notes
has occurred and is continuing, or another Event of Default with respect to the
Notes has occurred and is continuing and the Notes have been accelerated as a
result of the occurrence of such Event of Default.


 


Deferred interest on the Notes shall bear
interest at the same rate as the stated rate on the Notes, compounded
quarterly, until paid in full.  Following
the end of any Interest Deferral Period, the Company shall be obligated to
resume quarterly payments of interest on the Notes, including interest on
deferred interest. All interest deferred prior to December 30, 2009, shall
be repaid no later than December 30, 2009. All interest deferred after December 30,
2009 shall be repaid on or before maturity. The Company may prepay all or part
of the deferred interest, at any time other than during an Interest Deferral
Period.


 


The Notes will mature on December 30,
2019.


 


2.               Method of
Payment


 


The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered holders of Notes
at the close of business on the 15th day of the month of the
interest payment date even if Notes are canceled after the record date and on
or before the interest payment date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, and interest in money of the United States.  Payments in respect of the Notes represented
by a Global Note (including principal, premium, if any, and interest) shall be
made by wire transfer of immediately available funds to the accounts specified
by The Depository Trust Company. The Company will make all payments in respect
of a Physical Note (including principal, premium, if any, and interest), and
the Notes may be exchanged or transferred, at office or agency of the Company
in the Borough of Manhattan, The City of New York (which initially shall be the
office of the Trustee maintained for such purpose at The Depository Trust
Company, 55 Water Street, New York, NY 10041), except that, at the option of
the Company, payment of interest may be made by check mailed to the Holders at
their registered addresses.


 


3.               Paying Agent and
Registrar


 


Initially, the Trustee will act as Paying
Agent and as Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar upon written notice to such Paying Agent or Registrar
and the Trustee. The Company or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.


 


4.               Indenture


 


The Company issued the Notes under an
Indenture dated as of December 21, 2004 (the “Indenture”), among the
Company, the Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in
effect on the date of the Indenture (the “TIA”). Terms defined in the Indenture
and not defined herein have the meanings


 





















 


ascribed thereto in the Indenture. The Notes are subject to all terms
and provisions of the Indenture, and Holders are referred to the Indenture and
the TIA for a statement of such terms and provisions.


 


This Note is one of the Notes referred to in
the Indenture. The Notes include the Original Notes and any Additional Notes.
The Original Notes and any Additional Notes shall be part of the same series
issued and will vote together on all matters subject to the conditions set
forth in the Indenture.  The Company
shall only be entitled to issue Additional Notes in accordance with Section 4.14
of the Indenture.  Additional Notes shall
be issued with terms substantially identical to the Original Notes, except for
any variation in issuance date and, upon the issuance of Additional Notes with
original issue discount (and any issuance of Additional Notes thereafter),
CUSIP number.  The Indenture imposes
certain limitations on the ability of the Company and its Restricted
Subsidiaries to, among other things, incur Indebtedness and issue Disqualified
Stock and Preferred Stock; pay dividends on, and redeem, capital stock and
redeem Indebtedness that is subordinate in right of payment to the Notes; make
certain other Restricted Payments, including Investments; enter into consensual
restrictions on the payment of certain dividends and distributions by
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 to consolidate or merge with
or into or wind up into any other Person or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of their property or
assets in one or more related transactions to any Person.


 


To guarantee the due and punctual payment of
the principal and interest on the Notes and all other amounts payable by the
Company under the Indenture and the Notes when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Notes and the Indenture, the Guarantors have jointly and
severally, fully and unconditionally guaranteed the Guaranteed Obligations on a
subordinated basis pursuant to the terms of the Indenture.


 


5.               Optional
Redemption


 


The Company may, at its option, redeem all,
but not less than all, of the Notes at any time upon not less than 30 nor more
than 60 days’ prior notice, at a redemption price equal to 100% of the
principal amount of the Notes plus accrued and unpaid interest to the
redemption date, upon the occurrence of a Tax event.


 


Except as set forth in the preceding
paragraph, the Company may not redeem Notes at its option prior to December 30,
2011.


 


At any time and from time to time on or after
December 30, 2011, the Notes shall be redeemable, at the Company’s option,
in whole or in part for cash at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest on the Notes
redeemed, to the relevant Redemption Date, if redeemed during the 12-month
period commencing on December 30 of the years set forth below:


 





















 




	
  Period

  	
   

  	
  Redemption

  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2011

  	
   

  	
  106.500

  	
  %

  
	
  2012

  	
   

  	
  105.200

  	
  %

  
	
  2013

  	
   

  	
  103.900

  	
  %

  
	
  2014

  	
   

  	
  102.600

  	
  %

  
	
  2015

  	
   

  	
  101.300

  	
  %

  
	
  2016 and
  thereafter

  	
   

  	
  100.000

  	
  %

  






 


On and after the redemption date, interest
will cease to accrue on Notes or portions thereof called for redemption, so
long as the Company has deposited with the paying agent funds (in US Dollars)
sufficient to pay the principal of, plus accrued and unpaid interest (including
any deferred interest and accrued interest thereon) on, the Notes to be
redeemed.


 


A full or partial redemption of the Notes
will result in an automatic separation of the IDSs.


 


6.               Sinking Fund


 


The Notes 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 Notes to be redeemed at his or her registered
address. Notes may be redeemed in part. 
If money sufficient to pay the redemption price of and accrued and
unpaid interest on all Notes (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent on or before 10:00 am, New
York City time on the Redemption Date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Notes (or
such portions thereof) called for redemption.


 


8.               Repurchase of
Notes at the Option of Holders upon Change of Control


 


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


 


9.               Subordination


 


The Notes and each Guarantee is subordinated
to Senior Indebtedness of the Company and the applicable Guarantor, as defined
in the Indenture, respectively. To the extent provided in the Indenture, Senior
Indebtedness of the Company and the applicable Guarantor must be paid in full
in cash before the Notes may be paid by the Company and the Guarantee of such
Guarantor


 


97





















 


may be paid by such Guarantor. 
The Company and each Guarantor agrees, and each Holder by accepting a
Note agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact
for such purpose.


 


10.         Transfer; Exchange


 


The Notes are in registered form without
coupons. A Holder may transfer or exchange Notes 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
Notes (i) selected for redemption (except, in the case of a Note to be redeemed
in part, the portion of the Note not to be redeemed), (ii) during a period
beginning at the opening of business 15 days prior to a selection of Notes to
be redeemed and ending on the relevant Redemption Date, (iii) tendered in a
Change of Control Offer or Asset Sale Offer or (iv) during a period beginning
on the opening of business 15 days before a record date for the payment of
interest and ending on the applicable succeeding interest payment date.


 


11.         Persons Deemed Owners


 


The registered Holder of this Note 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 Notes and the
Indenture if the Company deposits or causes to be deposited with the Trustee
money or U.S. Government Obligations for the payment of principal and interest
on the Notes to redemption or maturity, as the case may be. In the event that
the Company exercises its right to terminate some of or all its obligations
under the Notes and the Indenture in accordance with the preceding sentence,
each Guarantor will be released from its related obligations with respect to
its Guarantee.


 


14.         Amendment, Waiver


 


Without the consent of each Holder affected,
an amendment or waiver may not: (1) reduce the amount of Notes whose Holders
must consent to an amendment; (2) reduce the rate of or extend the time for
payment of interest on any Note, or amend the Company’s right to defer interest
on the Notes in a manner adverse to the Holders; (3) reduce the principal of or
extend the Stated Maturity of any Note; (4) reduce the premium payable upon the
redemption of any Note or change the time at which any Note may be redeemed in
accordance with Article 3 of the


 





















 


Indenture; (5) make any Note payable in money other than that stated in
the Note; (6) make any change in Article 10 or Article 12 of the
Indenture that adversely affects the rights of any Holder under Article 10
or Article 12 of the Indenture; (7) impair the right of any Holder to
receive payment of principal of, premium, if any, and interest on such Holder’s
Notes 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 Notes; (8)
except in connection with an offer by the Company to purchase all of the Notes
(in which case a majority in principal amount of Notes will be
sufficient),  (A) make any change to the
provisions of Section 4.05 of the Indenture that eliminate the prohibition
on paying dividends while interest is being deferred, while any previously
Deferred Interest remains unpaid or during a Dividend Suspension Period, or
during the continuance of any Event of Default, (B) make a change to lower the
Interest Coverage Ratio threshold for a Dividend Suspension Period or make a
change to paragraph (c) of Section 4.04 of the Indenture that would have
the effect of increasing the amounts permitted to be distributed in respect of
the Company’s Capital Stock, (C) waive an Event of Default under Section 6.01(k)
of the Indenture; (9) make any change in the amendment provisions which require
each Holder’s consent or in the waiver provisions; or (10) modify the
Guarantees in any manner adverse to the Holders.


 


Without the consent of any Holder of Notes,
the Company and the Trustee may amend the Indenture or the Notes to (1) cure
any ambiguity, omission, defect or inconsistency; (2) provide for the
assumption by a successor corporation, partnership, limited liability company
or other entity of the obligations of the Company under this Indenture; (3)
provide for uncertificated Notes in addition to or in place of Physical Notes; provided
that the uncertificated Notes are issued in registered form for purposes of Section 163(f)
of the Internal Revenue Code or in a manner such that the uncertificated Notes
are described in Section 163(f)(2)(B) of the Internal Revenue Code; (4) to
make any change in Article 10 or Article 12 of the Indenture that
would limit or terminate the benefits available to any holder of Senior
Indebtedness (or Representatives therefor) under Article 10 or Article 12
of the Indenture; (5) add additional Guarantees with respect to the Notes; (6)
secure the Notes; (7) add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon the
Company; (8)  make any change that does
not adversely affect the legal rights or entitlements under this Indenture of
any Holder to comply with any requirement of the SEC or in connection with the
qualification of this Indenture under the TIA; or (9) enter into one or more
supplemental indentures to effect any of the amendments set forth herein or to
set forth the terms of and issue any Additional Notes in accordance with the
provisions of this Indenture.


 


Notwithstanding the foregoing, an amendment
under this paragraph 14 may not make any change that adversely affects the
rights under Article 10 or Article 12 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any group or representative thereof authorized to give a consent) consent
to such change.


 


15.         Defaults and Remedies


 


If an Event of Default occurs (other than an
Event of Default pursuant to Section 6.01(g) or (h)) and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the
outstanding Notes may declare the principal of, premium if any, and accrued but
unpaid interest on all the Notes to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable. If an Event
of Default relating to certain events of bankruptcy, insolvency or


 





















 


reorganization of the Company occurs, the principal of, premium, if
any, and interest on all the Notes shall become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holders.


 


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


 


If a Default occurs and is continuing and is
actually known to the Trustee, the Trustee must mail to each Holder notice of
the Default within the earlier of 90 days after it occurs or 30 days after it
is actually known to a Trust Officer or written notice of it is received by the
Trustee. Except in the case of a Default in the payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding notice is in the interests of the Noteholders. In addition, the
Company is required to deliver, to the Trustee, within 120 days after the end
of each fiscal year, a certificate indicating whether the signers thereof know
of any Event of Default that occurred during the previous year. The Company
also is required to deliver to the Trustee, within 30 days after the occurrence
thereof, written notice of any event which would constitute certain Defaults,
their status and what action the Company is taking or proposes to take in
respect thereof.


 


16.         Subsequent Issuance


 


The Company may only issue Additional Notes
in accordance with Section 4.14 of the Indenture.


 


The Company agrees, and by purchasing the
Notes each Holder shall be deemed to have agreed, that upon the issuance by the
Company of any Additional Notes, if the Company determines that such Additional
Notes were issued with original issue discount, immediately following such
issuance (and any issuance of Additional Notes thereafter), a portion of each
Holder’s Original Notes and/or Additional Notes, as applicable, will
automatically, without any


 





















 


action by such Holder, be exchanged (the “Automatic Exchange”) for a
portion of each other Holder’s Notes, such that immediately after the Automatic
Exchange, each Holder will hold Notes issued prior to the date of issuance of
such Additional Notes and such Additional Notes in the same proportion as the
ratio of the then outstanding aggregate principal amount of such Notes to the
then outstanding aggregate principal amount of such Additional Notes.  The aggregate stated principal amount of
Notes owned by each Holder will not change as a result of the Automatic
Exchange.  Immediately following the
Automatic Exchange, the Company and the Trustee will instruct DTC to facilitate
the combination of the Notes issued prior to the date of issuance of such
Additional Notes and such Additional Notes into indivisible units.


 


At least ten (10) business days prior to the
closing of the issuance of Additional Notes that will result in an Automatic
Exchange, the Company shall notify the Trustee, in writing of its intention to
consummate such subsequent issuance and shall instruct the Trustee and DTC to
take any action necessary to effect the Automatic Exchange.  Such notice may be revoked at any time prior
to the date fixed for such Automatic Exchange.


 


The Company agrees, and by acceptance of
beneficial ownership in the Notes each beneficial owner of the Notes shall be
deemed to have agreed, that (1) the Company will report any “original issue
discount” (as determined for U.S. federal income tax purposes) associated with
the Original Notes and Additional Notes among all beneficial owners in
proportion to their ownership of the aggregate principal amount of Notes and
(2) each beneficial owner of the Notes shall report such original issue
discount in this manner and shall not take an inconsistent position for any
applicable tax purpose.


 


17.         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 Notes 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.


 


18.         No Recourse Against
Others


 


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


 


19.         Authentication


 


This Note 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 Note.


 





















 


20.         Abbreviations


 


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


 


21.         Governing Law


 


THIS NOTE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.  THE HOLDERS AGREE TO SUBMIT TO THE
JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH
OF MANHATTAN, IN THE CITY OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THE INDENTURE OR THIS NOTE.


 


22.         CUSIP Numbers


 


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


 


23.         Tax Treatment.  


 


By acceptance of beneficial ownership
interest in this Note each beneficial Owner of Notes will be deemed to have
agreed, (1) to treat itself as owner of the Notes for all purposes, including
the preparation and filing of any United States federal, state, local or
foreign tax return, report, or other information; (2) to treat the Notes as
indebtedness for all tax purposes, (3) to treat the acquisition of an IDS as
the acquisition of the Notes and Common Stock which are represented by the IDS
and (4) to allocate the initial purchase price of the IDS upon original
issuance between the Notes and the Common Stock in the proportions as
$                     
and
$                       
respectively.


 


The Company will
furnish to any Holder of Notes upon written request and without charge to the
Holder a copy of the Indenture which has in it the text of this Note.


 





















 


ASSIGNMENT FORM


 


To assign this Note, fill in the form below:


 


I or we assign and transfer this Note to


 


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


 


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


 


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


 


 


	
   

  
	
   

  	
   

  
	
  Date: 

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

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

  	
   

  
						



 





















 


[TO
BE ATTACHED TO GLOBAL NOTES]


 


SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL NOTE


 


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


 


	
  Date of

  Exchange

  	
   

  	
  Amount of decrease

  in Principal Amount

  of this Global Note

  	
   

  	
  Amount of increase

  in Principal

  Amount of this

  Global Note

  	
   

  	
  Principal amount of

  this Global Note

  following such

  decrease or increase

  	
   

  	
  Signature of authorized

  signatory of Trustee or

  Notes Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


OPTION OF HOLDER TO ELECT
PURCHASE


 


If you want to elect to have this Note
purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.09
(Change of Control) of the Indenture, check the box:


 




	
  Asset Sale o

  	
   

  	
  Change of Control o

  






 


If you want to elect to have only part of
this Note purchased by the Company pursuant to Section 4.06 or 4.09 of the
Indenture, state the amount:


 


	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee: 

  	
   

  
	
   

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

  
						



 





















 


Part II


 


[FORM
OF GLOBAL NOTE CUSTODIAN NOTE]


 


[Global Note Legend]


 


UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
WELLS FARGO BANK, NATIONAL ASSOCIATION (“WELLS FARGO”), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF WELLS FARGO OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF WELLS FARGO (AND ANY PAYMENT IS
MADE TO WELLS FARGO OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF WELLS FARGO), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, WELLS FARGO, HAS AN INTEREST HEREIN.


 


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


 


THE COMPANY MAY SUBSEQUENTLY ISSUE NOTES THAT ARE IDENTICAL IN ALL
MATERIAL RESPECTS TO THIS NOTE BUT HAVE ORIGINAL ISSUE DISCOUNT.  IN SUCH CASE, THE HOLDER OF THIS NOTE WILL
EXCHANGE A PORTION OF HIS NOTES FOR SUCH NEWLY ISSUED NOTES WITH ORIGINAL ISSUE
DISCOUNT.  THE AGGREGATE PRINCIPAL AMOUNT
OF NOTES OWNED BY SUCH HOLDER, HOWEVER, WILL NOT CHANGE AS A RESULT OF SUCH
EXCHANGE.  AFTER ISSUANCE OF ANY SUCH
NOTES WITH ORIGINAL DISCOUNT, A HOLDER MAY OBTAIN THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, THE ISSUE PRICE AND THE YIELD TO MATURITY BY
SUBMITTING A WRITTEN REQUEST TO THE COMPANY AT 505 THIRD AVENUE EAST, ONEONTA,
ALABAMA 35121, ATTN:  CHIEF FINANCIAL
OFFICER.


 





















 


	
  No.             

  	
  $                         

  



 


13% Senior
Surbordinated Note due 2019


 


CUSIP No.                   


 


OTELCO INC., a
Delaware corporation, promises to pay to Wells Fargo Bank, National
Association, or registered assigns, the principal sum [of         Dollars]  [listed on the
Schedule of Increases or Decreases in Global Note attached hereto](2) on December 30, 2019.


 


Interest
Payment Dates:


 


Record Dates:                  .


 










(2)           Use the Schedule of Increases and
Decreases language for a Global Note.


 





















 


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


 


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


 


	
   

  	
  OTELCO INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


 


Dated:


	
  TRUSTEE’S CERTIFICATE OF

  	
   

  
	
   

  	
  AUTHENTICATION

  
	
  WELLS FARGO BANK, NATIONAL ASSOCIATION,

  	
   

  
	
  as Trustee, certifies that this is one of the
  Notes referred to in the Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
					



 





















 


[FORM
OF REVERSE SIDE OF NOTE]


 


13% Senior
Subordinated Note due 2019


 


Capitalized
terms used but not defined herein shall have the meanings given to such terms
in the Indenture (as defined).


 


1.  Interest; Extension of Maturity


 


Otelco Inc., 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 13% senior
surbordinated note due 2019 (the “Note”) at the rate per annum shown
above.  The Company shall pay interest
from December 21, 2004 or from the most recent date to which interest has been
paid or provided for, payable quarterly in arrears on March 30, June 30,
September 30 and December 30, to Holders of record at the close of business on
the 15th day of such month, commencing March 30, 2005, provided
that if any such day is not a Business Day, such day shall be the next Business
Day, and no interest on such payment shall accrue for the period from and after
such interest payment date.


 


Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.


 


Prior to
December 30, 2009, the Company may, at its election, defer interest payments on
the Notes on one or more occasions for not more than eight quarters in the
aggregate (any such period, an “Initial Interest Deferral Period”); provided
that (1) at the end of each occasion, the Company will be obligated to resume
quarterly payments of interest on the Notes including interest on deferred
interest; and (2) no later than December 30, 2009, the Company must pay in full
all deferred interest, together with accrued interest thereon.


 


In addition,
after December 30, 2009 the Company may, at its election, defer interest
payments on the Notes on up to four occasions with respect to up to two
quarters per occasion (each such occasion together with the Initial Interest
Deferral Period, an “Interest Deferral Period”); provided that (1) the Company
may not defer interest on any occasion after December 30, 2009 unless and until
all interest deferred on any prior occasion, together with accrued interest
thereon, has been paid in full; (2) at the end of each occasion, the Company
will be obligated to resume quarterly payments of interest on the Notes
including interest on deferred interest; and (3) no later than December 30,
2019, the Company must pay all deferred interest, together with accrued
interest thereon.


 


On each
occasion that the Company elects to defer interest, it will be required to
deliver to the Trustee a copy of a resolution of the Company’s Board of Directors
to the effect that, based upon a good-faith determination of the Company’s
Board of Directors, (x) such interest deferral is reasonably necessary for
bona-fide cash management purposes, whether indicated by cumulative
distributable cash shortfall or otherwise, or to reduce the likelihood of or
avoid a payment default under any Designated Senior Indebtedness or (y) as long
the Credit Agreement remains in effect, the Company has failed to maintain a
fixed charge coverage ratio of at least 1.15:1:00 or a senior leverage ratio of
not more than 3.20 to 1.00, in each case, as calculated in


 





















 


accordance
with the provisions contained in the Credit Agreement the date hereof,
irrespective of any subsequent changes to the Credit Agreement; provided no
such deferral may be commenced, and any ongoing deferral shall cease, if a
default in payment of interest, principal or premium, if any, on the Notes has
occurred and is continuing, or another Event of Default with respect to the
Notes has occurred and is continuing and the Notes have been accelerated as a
result of the occurrence of such Event of Default.


 


Deferred
interest on the Notes shall bear interest at the same rate as the stated rate
on the Notes, compounded quarterly, until paid in full.  Following the end of any Interest Deferral
Period, the Company shall be obligated to resume quarterly payments of interest
on the Notes, including interest on deferred interest. All interest deferred
prior to December 30, 2009, shall be repaid no later than December 30, 2009.
All interest deferred after December 30, 2009 shall be repaid on or before
maturity. The Company may prepay all or part of the deferred interest, at any
time other than during an Interest Deferral Period.


 


The Notes will
mature on December 30, 2019.


 


2.  Method of Payment


 


The Company
shall pay interest on the Notes (except defaulted interest) to the Persons who
are registered holders of Notes at the close of business on the 15th
day of the month of the interest payment date even if Notes are canceled after
the record date and on or before the interest payment date. Holders must
surrender Notes to a Paying Agent to collect principal payments. The Company
shall pay principal, premium, if any, and interest in money of the United
States.  Payments in respect of the Notes
represented by a Global Note (including principal, premium, if any, and
interest) shall be made by wire transfer of immediately available funds to the
accounts specified by Wells Fargo Bank, National Association. The Company will
make all payments in respect of a Physical Note (including principal, premium,
if any, and interest), and the Notes may be exchanged or transferred, at the
office or agency of Wells Fargo Bank, National Association, except that, at the
option of the Company, payment of interest may be made by check mailed to the
Holders at their registered addresses.


 


3.  Paying Agent and Registrar


 


Initially, the
Trustee will act as Paying Agent and as Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar upon written notice to such
Paying Agent or Registrar and the Trustee. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.


 


4.  Indenture


 


The Company issued the Notes under an Indenture dated as of December
21, 2004 (the “Indenture”), among the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all terms and provisions of
the


 





















 


Indenture, and Holders are referred to the Indenture and the TIA for a
statement of such terms and provisions.


 


This Note is
one of the Notes referred to in the Indenture. The Notes include the Original
Notes and any Additional Notes. The Original Notes and any Additional Notes
shall be part of the same series issued and will vote together on all matters
subject to the conditions set forth in the Indenture.  The Company shall only be entitled to issue
Additional Notes in accordance with Section 4.14 of the Indenture.  Additional Notes shall be issued with terms
substantially identical to the Original Notes, except for any variation in
issuance date and, upon the issuance of Additional Notes with original issue
discount (and any issuance of Additional Notes thereafter), CUSIP number.  The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, incur Indebtedness and issue Disqualified Stock and Preferred Stock;
pay dividends on, and redeem, capital stock and redeem Indebtedness that is
subordinate in right of payment to the Notes; make certain other Restricted
Payments, including Investments; enter into consensual restrictions on the
payment of certain dividends and distributions by 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 to consolidate or merge with or into or wind up into any
other Person or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of their property or assets in one or more related
transactions to any Person.


 


To guarantee
the due and punctual payment of the principal and interest on the Notes and all
other amounts payable by the Company under the Indenture and the Notes when and
as the same shall be due and payable, whether at maturity, by acceleration or
otherwise, according to the terms of the Notes and the Indenture, the
Guarantors have jointly and severally, fully and unconditionally guaranteed the
Guaranteed Obligations on a subordinated basis pursuant to the terms of the
Indenture.


 


5.  Optional Redemption


 


The Company may, at its option, redeem all,
but not less than all, of the Notes at any time upon not less than 30 nor more
than 60 days’ prior notice, at a redemption price equal to 100% of the
principal amount of the Notes plus accrued and unpaid interest to the
redemption date, upon the occurrence of a Tax event.


 


Except as set forth in the preceding
paragraph, the Company may not redeem Notes at its option prior to December 30,
2011.


 


At any time and from time to time on or after
December 30, 2011, the Notes shall be redeemable, at the Company’s option, in
whole or in part for cash at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest on the Notes
redeemed, to the relevant Redemption Date, if redeemed during the 12-month
period commencing on December 30 of the years set forth below:


 





















 


	
  Period

  	
   

  	
  Redemption

  Price

  	
   

  
	
  2011

  	
   

  	
  106.500

  	
  %

  
	
  2012

  	
   

  	
  105.200

  	
  %

  
	
  2013

  	
   

  	
  103.900

  	
  %

  
	
  2014

  	
   

  	
  102.600

  	
  %

  
	
  2015

  	
   

  	
  101.300

  	
  %

  
	
  2016 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


On and after
the redemption date, interest will cease to accrue on Notes or portions thereof
called for redemption, so long as the Company has deposited with the paying
agent funds (in US Dollars) sufficient to pay the principal of, plus accrued
and unpaid interest (including any deferred interest and accrued interest
thereon) on, the Notes to be redeemed.


 


A full or
partial redemption of the Notes will result in an automatic separation of the
IDSs.


 


6.  Sinking Fund


 


The Notes 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 Notes to be redeemed
at his or her registered address. Notes may be redeemed in part.  If money sufficient to pay the redemption
price of and accrued and unpaid interest on all Notes (or portions thereof) to
be redeemed on the Redemption Date is deposited with the Paying Agent on or
before 10:00 am, New York City time on the Redemption Date and certain other
conditions are satisfied, on and after such date interest ceases to accrue on
such Notes (or such portions thereof) called for redemption.


 


8.  Repurchase of Notes at the Option of
Holders upon Change of Control


 


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


 


9.  Subordination


 


The Notes and
each Guarantee is subordinated to Senior Indebtedness of the Company and the
applicable Guarantor, as defined in the Indenture, respectively. To the extent
provided in the Indenture, Senior Indebtedness of the Company and the
applicable Guarantor must be paid in full in cash before the Notes may be paid
by the Company and the Guarantee of such Guarantor may be paid by such
Guarantor.  The Company and each
Guarantor agrees, and each Holder by


 





















 


accepting a
Note agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.


 


10.  Transfer; Exchange


 


The Notes are
in registered form without coupons. A Holder may transfer or exchange Notes 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 Notes (i) selected for redemption (except, in the case of a Note
to be redeemed in part, the portion of the Note not to be redeemed), (ii)
during a period beginning at the opening of business 15 days prior to a
selection of Notes to be redeemed and ending on the relevant Redemption Date,
(iii) tendered in a Change of Control Offer or Asset Sale Offer or (iv) during
a period beginning on the opening of business 15 days before a record date for
the payment of interest and ending on the applicable succeeding interest
payment date.


 


11.  Persons Deemed Owners


 


The registered
Holder of this Note 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 Notes and the Indenture if the Company deposits or causes
to be deposited with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Notes to redemption or maturity, as
the case may be. In the event that the Company exercises its right to terminate
some of or all its obligations under the Notes and the Indenture in accordance
with the preceding sentence, each Guarantor will be released from its related
obligations with respect to its Guarantee.


 


14.  Amendment, Waiver


 


Without the
consent of each Holder affected, an amendment or waiver may not: (1) reduce the
amount of Notes whose Holders must consent to an amendment; (2) reduce the rate
of or extend the time for payment of interest on any Note, or amend the Company’s
right to defer interest on the Notes in a manner adverse to the Holders; (3)
reduce the principal of or extend the Stated Maturity of any Note; (4) reduce
the premium payable upon the redemption of any Note or change the time at which
any Note may be redeemed in accordance with Article 3 of the Indenture; (5)
make any Note payable in money other than that stated in the Note; (6) make any


 





















 


change in
Article 10 or Article 12 of the Indenture that adversely affects the rights of
any Holder under Article 10 or Article 12 of the Indenture; (7) impair the right
of any Holder to receive payment of principal of, premium, if any, and interest
on such Holder’s Notes 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 Notes;
(8) except in connection with an offer by the Company to purchase all of the
Notes (in which case a majority in principal amount of Notes will be
sufficient),  (A) make any change to the
provisions of Section 4.05 of the Indenture that eliminate the prohibition on
paying dividends while interest is being deferred, while any previously
Deferred Interest remains unpaid or during a Dividend Suspension Period, or
during the continuance of any Event of Default, (B) make a change to lower the
Interest Coverage Ratio threshold for a Dividend Suspension Period or make a
change to paragraph (c) of Section 4.04 of the Indenture that would have the
effect of increasing the amounts permitted to be distributed in respect of the
Company’s Capital Stock, (C) waive an Event of Default under Section 6.01(k) of
the Indenture; (9) make any change in the amendment provisions which require
each Holder’s consent or in the waiver provisions; or (10) modify the
Guarantees in any manner adverse to the Holders.


 


Without the
consent of any Holder of Notes, the Company and the Trustee may amend the
Indenture or the Notes to (1) cure any ambiguity, omission, defect or
inconsistency; (2) provide for the assumption by a successor corporation,
partnership, limited liability company or other entity of the obligations of
the Company under this Indenture; (3) provide for uncertificated Notes in
addition to or in place of Physical Notes; provided that the
uncertificated Notes are issued in registered form for purposes of Section
163(f) of the Internal Revenue Code or in a manner such that the uncertificated
Notes are described in Section 163(f)(2)(B) of the Internal Revenue Code; (4)
to make any change in Article 10 or Article 12 of the Indenture that would
limit or terminate the benefits available to any holder of Senior Indebtedness
(or Representatives therefor) under Article 10 or Article 12 of the Indenture;
(5) add additional Guarantees with respect to the Notes; (6) secure the Notes;
(7) add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company; (8)  make any change that does not adversely
affect the legal rights or entitlements under this Indenture of any Holder to
comply with any requirement of the SEC or in connection with the qualification
of this Indenture under the TIA; or (9) enter into one or more supplemental
indentures to effect any of the amendments set forth herein or to set forth the
terms of and issue any Additional Notes in accordance with the provisions of
this Indenture.


 


Notwithstanding
the foregoing, an amendment under this paragraph 14 may not make any change
that adversely affects the rights under Article 10 or Article 12 of any holder
of Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any group or representative thereof authorized to give a consent) consent
to such change.


 


15.  Defaults and Remedies


 


If an Event of
Default occurs (other than an Event of Default pursuant to Section 6.01(g) or
(h)) and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the outstanding Notes may declare the principal of, premium if any,
and accrued but unpaid interest on all the Notes to be due and payable. Upon
such a declaration, such principal and interest shall be due and payable. If an
Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs, the principal of, premium, if any, and
interest on all the 


 





















 


Notes shall
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders.


 


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


 


If a Default
occurs and is continuing and is actually known to the Trustee, the Trustee must
mail to each Holder notice of the Default within the earlier of 90 days after
it occurs or 30 days after it is actually known to a Trust Officer or written
notice of it is received by the Trustee. Except in the case of a Default in the
payment of principal of, premium, if any, or interest on any Note, the Trustee
may withhold notice if and so long as a committee of its Trust Officers in good
faith determines that withholding notice is in the interests of the Noteholders.
In addition, the Company is required to deliver, to the Trustee, within 120
days after the end of each fiscal year, a certificate indicating whether the
signers thereof know of any Event of Default that occurred during the previous
year. The Company also is required to deliver to the Trustee, within 30 days
after the occurrence thereof, written notice of any event which would
constitute certain Defaults, their status and what action the Company is taking
or proposes to take in respect thereof.


 


16.  Subsequent Issuance


 


The Company
may only issue Additional Notes in accordance with Section 4.14 of the
Indenture.


 


The Company
agrees, and by purchasing the Notes each Holder shall be deemed to have agreed,
that upon the issuance by the Company of any Additional Notes, if the Company
determines that such Additional Notes were issued with original issue discount,
immediately following such issuance (and any issuance of Additional Notes
thereafter), a portion of each Holder’s Original Notes and/or Additional Notes,
as applicable, will automatically, without any action by such Holder, be
exchanged (the “Automatic Exchange”) for a portion of each other


 





















 


Holder’s
Notes, such that immediately after the Automatic Exchange, each Holder will
hold Notes issued prior to the date of issuance of such Additional Notes and
such Additional Notes in the same proportion as the ratio of the then
outstanding aggregate principal amount of such Notes to the then outstanding
aggregate principal amount of such Additional Notes.  The aggregate stated principal amount of
Notes owned by each Holder will not change as a result of the Automatic
Exchange.  Immediately following the
Automatic Exchange, the Company and the Trustee will instruct DTC to facilitate
the combination of the Notes issued prior to the date of issuance of such
Additional Notes and such Additional Notes into indivisible units.


 


At least ten
(10) business days prior to the closing of the issuance of Additional Notes
that will result in an Automatic Exchange, the Company shall notify the
Trustee, in writing of its intention to consummate such subsequent issuance and
shall instruct the Trustee and Wells Fargo Bank, National Association, as
custodian for the benefit of the owners hereof, to take any action necessary to
effect the Automatic Exchange.  Such
notice may be revoked at any time prior to the date fixed for such Automatic
Exchange.


 


The Company
agrees, and by acceptance of beneficial ownership in the Notes each beneficial
owner of the Notes shall be deemed to have agreed, that (1) the Company will
report any “original issue discount” (as determined for U.S. federal income tax
purposes) associated with the Original Notes and Additional Notes among all
beneficial owners in proportion to their ownership of the aggregate principal
amount of Notes and (2) each beneficial owner of the Notes shall report such
original issue discount in this manner and shall not take an inconsistent
position for any applicable tax purpose.


 


17.  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 Notes 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.


 


18.  No Recourse Against Others


 


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


 


19.  Authentication


 


This Note
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 Note.


 





















 


20.  Abbreviations


 


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


 


21.  Governing Law


 


THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.  THE HOLDERS AGREE TO
SUBMIT TO THE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED
IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE OR THIS NOTE.


 


22.  CUSIP Numbers


 


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


 


23.  Tax Treatment.  


 


By acceptance
of beneficial ownership interest in this Note each beneficial Owner of  Notes will be deemed to have agreed, (1) to
treat itself as owner of the Notes for all purposes, including the preparation
and filing of any United States federal, state, local or foreign tax return,
report, or other information; (2) to treat the Notes as indebtedness for all
tax purposes, (3) to treat the acquisition of an IDS as the acquisition of the
Notes and Common Stock which are represented by the IDS and (4) to allocate the
initial purchase price of the IDS upon original issuance between the Notes and
the Common Stock in the proportions as $                           
and $                    
respectively.


 


The Company will furnish to any Holder of
Notes upon written request and without charge to the Holder a copy of the
Indenture which has in it the text of this Note.


 





















 


ASSIGNMENT
FORM


 


To assign this Note, fill in the form below:


 


I or we assign and transfer this Note to


 


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


 


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


 


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


 


	
   

  
	
   

  
	
  Date: 

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  
	
   

  
	
   

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

  



 





















 


[TO
BE ATTACHED TO GLOBAL NOTES]


 


SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL NOTE


 


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


 


	
  Date of Exchange

  	
   

  	
  Amount of decrease

  in Principal Amount

  of this Global Note

  	
   

  	
  Amount of increase

  in Principal

  Amount of this

  Global Note

  	
   

  	
  Principal amount of

  this Global Note

  following such

  decrease or increase

  	
   

  	
  Signature of authorized

  signatory of Trustee or

  Notes Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


OPTION OF
HOLDER TO ELECT PURCHASE


 


If you want to
elect to have this Note purchased by the Company pursuant to Section 4.06
(Asset Sale) or 4.09 (Change of Control) of the Indenture, check the box:


 


	
  Asset Sale o

  	
   

  	
  Change of Control o

  



 


If you want to
elect to have only part of this Note purchased by the Company pursuant to
Section 4.06 or 4.09 of the Indenture, state the amount:


 


 


	
  Date:

  	
   

  	
  Your Signature:

  	
   

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

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

  
							



 





















 


EXHIBIT B


 


[FORM
OF PHYSICAL NOTE]


 


[Physical Note Legend]


 


THE COMPANY MAY SUBSEQUENTLY
ISSUE NOTES THAT ARE IDENTICAL IN ALL MATERIAL RESPECTS TO THIS NOTE BUT HAVE
ORIGINAL ISSUE DISCOUNT.  IN SUCH CASE,
THE HOLDER OF THIS NOTE WILL EXCHANGE A PORTION OF HIS NOTES FOR SUCH NEWLY
ISSUED NOTES WITH ORIGINAL ISSUE DISCOUNT. 
THE AGGREGATE PRINCIPAL AMOUNT OF NOTES OWNED BY SUCH HOLDER, HOWEVER,
WILL NOT CHANGE AS A RESULT OF SUCH EXCHANGE. 
AFTER ISSUANCE OF ANY SUCH NOTES WITH ORIGINAL DISCOUNT, A HOLDER MAY
OBTAIN THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE, THE ISSUE PRICE
AND THE YIELD TO MATURITY BY SUBMITTING A WRITTEN REQUEST TO THE COMPANY AT 505
THIRD AVENUE EAST, ONEONTA, ALABAMA 35121, ATTN:  CHIEF FINANCIAL OFFICER.


 





















 


	
  No. 

  	
  $                  

  



 


13% Senior Surbordinated
Note due 2019


 


CUSIP No.                   


 


OTELCO INC., a Delaware corporation, promises
to pay to Wells Fargo Bank, National Association, or registered assigns, the
principal sum [of       Dollars]
[listed on the Schedule of Increases or
Decreases in Global Note attached hereto](3) on
December 30, 2019.


 


Interest Payment Dates:


 


Record Dates:                   .


 










(3)           Use the Schedule of Increases and Decreases language for a
Global Note.


 





















 


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


 


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


 


	
   

  	
  OTELCO INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF 

  	
   

  
	
  AUTHENTICATION

  	
   

  
	
  WELLS FARGO BANK, NATIONAL ASSOCIATION,

  	
   

  
	
  as Trustee, certifies that this is one of

  	
   

  
	
  the Notes referred to in the Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
       Authorized Signatory

  	
   

  	
   

  



 





















 


[FORM
OF REVERSE SIDE OF NOTE]


 


13% Senior
Subordinated Note due 2019


 


Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Indenture (as defined).


 


1.     Interest; Extension of
Maturity


 


Otelco Inc., 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 13% senior
surbordinated note due 2019 (the “Note”) at the rate per annum shown
above.  The Company shall pay interest
from December 21, 2004 or from the most recent date to which interest has been
paid or provided for, payable quarterly in arrears on March 30, June 30,
September 30 and December 30, to Holders of record at the close of business on
the 15th day of such month, commencing March 30, 2005, provided
that if any such day is not a Business Day, such day shall be the next Business
Day, and no interest on such payment shall accrue for the period from and after
such interest payment date.


 


Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.


 


Prior to December 30, 2009, the Company may,
at its election, defer interest payments on the Notes on one or more occasions
for not more than eight quarters in the aggregate (any such period, an “Initial
Interest Deferral Period”); provided that (1) at the end of each occasion, the
Company will be obligated to resume quarterly payments of interest on the Notes
including interest on deferred interest; and (2) no later than December 30,
2009, the Company must pay in full all deferred interest, together with accrued
interest thereon.


 


In addition, after December 30, 2009 the
Company may, at its election, defer interest payments on the Notes on up to
four occasions with respect to up to two quarters per occasion (each such
occasion together with the Initial Interest Deferral Period, an “Interest
Deferral Period”); provided that (1) the Company may not defer interest on any
occasion after December 30, 2009 unless and until all interest deferred on any
prior occasion, together with accrued interest thereon, has been paid in full;
(2) at the end of each occasion, the Company will be obligated to resume
quarterly payments of interest on the Notes including interest on deferred
interest; and (3) no later than December 30, 2019, the Company must pay all
deferred interest, together with accrued interest thereon.


 


On each
occasion that the Company elects to defer interest, it will be required to
deliver to the Trustee a copy of a resolution of the Company’s Board of
Directors to the effect that, based upon a good-faith determination of the
Company’s Board of Directors, (x) such interest deferral is reasonably
necessary for bona-fide cash management purposes, whether indicated by cumulative
distributable cash shortfall or otherwise, or to reduce the
likelihood of or avoid a payment default under any Designated Senior
Indebtedness or (y) as long the Credit Agreement remains in effect, the Company has failed to maintain
a fixed charge coverage ratio of at least 1.15:1:00 or a senior leverage ratio
of not more than 3.20 to 1.00,
in each case, as calculated in


 





















 


accordance with the provisions
contained in the Credit Agreement the date hereof, irrespective of any subsequent changes to the
Credit Agreement; provided no such deferral may be commenced, and any ongoing
deferral shall cease, if a default in payment of interest, principal or premium,
if any, on the Notes has occurred and is continuing, or another Event of
Default with respect to the Notes has occurred and is continuing and the Notes
have been accelerated as a result of the occurrence of such Event of Default.


 


Deferred
interest on the Notes shall bear interest at the same rate as the stated rate
on the Notes, compounded quarterly, until paid in full.  Following the end of any Interest Deferral
Period, the Company shall be obligated to resume quarterly payments of interest
on the Notes, including interest on deferred interest. All interest deferred
prior to December 30, 2009, shall be repaid no later than December 30, 2009.
All interest deferred after December 30, 2009 shall be repaid on or before
maturity. The Company may prepay all or part of the deferred interest, at any
time other than during an Interest Deferral Period.


 


The Notes will
mature on December 30, 2019.


 


2.     Method of Payment


 


The Company
shall pay interest on the Notes (except defaulted interest) to the Persons who
are registered holders of Notes at the close of business on the 15th
day of the month of the interest payment date even if Notes are canceled after
the record date and on or before the interest payment date. Holders must
surrender Notes to a Paying Agent to collect principal payments. The Company
shall pay principal, premium, if any, and interest in money of the United
States.  Payments in respect of the Notes
represented by a Global Note (including principal, premium, if any, and
interest) shall be made by wire transfer of immediately available funds to the
accounts specified by Wells Fargo Bank, National Association. The Company will
make all payments in respect of a Physical Note (including principal, premium,
if any, and interest), and the Notes may be exchanged or transferred, at the
office or agency of Wells Fargo Bank, National Association, except that, at the
option of the Company, payment of interest may be made by check mailed to the
Holders at their registered addresses.


 


3.     Paying Agent and
Registrar


 


Initially, the
Trustee will act as Paying Agent and as Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar upon written notice to such
Paying Agent or Registrar and the Trustee. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.


 


4.     Indenture


 


The Company issued the Notes under an Indenture dated as of December
21, 2004 (the “Indenture”), among the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all terms and provisions of
the


 





















 


Indenture, and Holders are
referred to the Indenture and the TIA for a statement of such terms and
provisions.


 


This Note is
one of the Notes referred to in the Indenture. The Notes include the Original
Notes and any Additional Notes. The Original Notes and any Additional Notes
shall be part of the same series issued and will vote together on all matters
subject to the conditions set forth in the Indenture.  The Company shall only be entitled to issue
Additional Notes in accordance with Section 4.14 of the Indenture.  Additional Notes shall be issued with terms
substantially identical to the Original Notes, except for any variation in
issuance date and, upon the issuance of Additional Notes with original issue
discount (and any issuance of Additional Notes thereafter), CUSIP number.  The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, incur Indebtedness and issue Disqualified Stock and Preferred Stock;
pay dividends on, and redeem, capital stock and redeem Indebtedness that is subordinate
in right of payment to the Notes; make certain other Restricted Payments,
including Investments; enter into consensual restrictions on the payment of
certain dividends and distributions by 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 to consolidate or merge with or into or wind up into any other Person
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of their property or assets in one or more related
transactions to any Person.


 


To guarantee
the due and punctual payment of the principal and interest on the Notes and all
other amounts payable by the Company under the Indenture and the Notes when and
as the same shall be due and payable, whether at maturity, by acceleration or
otherwise, according to the terms of the Notes and the Indenture, the
Guarantors have jointly and severally, fully and unconditionally guaranteed the
Guaranteed Obligations on a subordinated basis pursuant to the terms of the
Indenture.


 


5.     Optional Redemption


 


The Company may, at its option, redeem all,
but not less than all, of the Notes at any time upon not less than 30 nor more
than 60 days’ prior notice, at a redemption price equal to 100% of the
principal amount of the Notes plus accrued and unpaid interest to the
redemption date, upon the occurrence of a Tax event.


 


Except as set forth in the preceding
paragraph, the Company may not redeem Notes at its option prior to December 30,
2011.


 


At any time and from time to time on or after
December 30, 2011, the Notes shall be redeemable, at the Company’s option, in
whole or in part for cash at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest on the Notes
redeemed, to the relevant Redemption Date, if redeemed during the 12-month
period commencing on December 30 of the years set forth below:


 





















 




	
  Period

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2011

  	
   

  	
  106.500

  	
  %

  
	
  2012

  	
   

  	
  105.200

  	
  %

  
	
  2013

  	
   

  	
  103.900

  	
  %

  
	
  2014

  	
   

  	
  102.600

  	
  %

  
	
  2015

  	
   

  	
  101.300

  	
  %

  
	
  2016 and thereafter

  	
   

  	
  100.000

  	
  %

  






 


On and after the redemption date, interest
will cease to accrue on Notes or portions thereof called for redemption, so
long as the Company has deposited with the paying agent funds (in US Dollars)
sufficient to pay the principal of, plus accrued and unpaid interest (including
any deferred interest and accrued interest thereon) on, the Notes to be
redeemed.


 


A full or
partial redemption of the Notes will result in an automatic separation of the
IDSs.


 


6.     Sinking Fund


 


The Notes 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 Notes to be redeemed
at his or her registered address. Notes may be redeemed in part.  If money sufficient to pay the redemption
price of and accrued and unpaid interest on all Notes (or portions thereof) to
be redeemed on the Redemption Date is deposited with the Paying Agent on or
before 10:00 am, New York City time on the Redemption Date and certain other
conditions are satisfied, on and after such date interest ceases to accrue on
such Notes (or such portions thereof) called for redemption.


 


8.     Repurchase of Notes at
the Option of Holders upon Change of Control


 


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


 


9.     Subordination


 


The Notes and
each Guarantee is subordinated to Senior Indebtedness of the Company and the
applicable Guarantor, as defined in the Indenture, respectively. To the extent
provided in the Indenture, Senior Indebtedness of the Company and the
applicable Guarantor must be paid in full in cash before the Notes may be paid
by the Company and the Guarantee of such Guarantor may be paid by such
Guarantor.  The Company and each
Guarantor agrees, and each Holder by


 





















 


accepting a Note agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such
purpose.


 


10.   Transfer; Exchange


 


The Notes are
in registered form without coupons. A Holder may transfer or exchange Notes 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 Notes (i) selected for redemption (except, in the case of a Note
to be redeemed in part, the portion of the Note not to be redeemed), (ii)
during a period beginning at the opening of business 15 days prior to a
selection of Notes to be redeemed and ending on the relevant Redemption Date,
(iii) tendered in a Change of Control Offer or Asset Sale Offer or (iv) during
a period beginning on the opening of business 15 days before a record date for
the payment of interest and ending on the applicable succeeding interest
payment date.


 


11.   Persons Deemed Owners


 


The registered
Holder of this Note 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 Notes and the Indenture if the Company deposits or causes
to be deposited with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Notes to redemption or maturity, as
the case may be. In the event that the Company exercises its right to terminate
some of or all its obligations under the Notes and the Indenture in accordance
with the preceding sentence, each Guarantor will be released from its related
obligations with respect to its Guarantee.


 


14.   Amendment, Waiver


 


 Without the consent of each Holder affected,
an amendment or waiver may not: (1) reduce the amount of Notes whose Holders
must consent to an amendment; (2) reduce the rate of or extend the time for
payment of interest on any Note, or amend the Company’s right to defer interest
on the Notes in a manner adverse to the Holders; (3) reduce the principal of or
extend the Stated Maturity of any Note; (4) reduce the premium payable upon the
redemption of any Note or change the time at which any Note may be redeemed in
accordance with Article 3 of the Indenture; (5) make any Note payable in money
other than that stated in the Note; (6) make any


 





















 


change in Article 10 or Article
12 of the Indenture that adversely affects the rights of any Holder under
Article 10 or Article 12 of the Indenture; (7) impair the right of any Holder
to receive payment of principal of, premium, if any, and interest on such
Holder’s Notes 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 Notes; (8)
except in connection with an offer by the Company to purchase all of the Notes
(in which case a majority in principal amount of Notes will be
sufficient),  (A) make any change to the
provisions of Section 4.05 of the Indenture that eliminate the prohibition on
paying dividends while interest is being deferred, while any previously
Deferred Interest remains unpaid or during a Dividend Suspension Period, or
during the continuance of any Event of Default, (B) make a change to lower the
Interest Coverage Ratio threshold for a Dividend Suspension Period or make a change
to paragraph (c) of Section 4.04 of the Indenture that would have the effect of
increasing the amounts permitted to be distributed in respect of the Company’s
Capital Stock, (C) waive an Event of Default under Section 6.01(k) of the
Indenture; (9) make any change in the amendment provisions which require each
Holder’s consent or in the waiver provisions; or (10) modify the Guarantees in
any manner adverse to the Holders.


 


Without the
consent of any Holder of Notes, the Company and the Trustee may amend the
Indenture or the Notes to (1) cure any ambiguity, omission, defect or
inconsistency; (2) provide for the assumption by a successor corporation,
partnership, limited liability company or other entity of the obligations of
the Company under this Indenture; (3) provide for uncertificated Notes in
addition to or in place of Physical Notes; provided that the
uncertificated Notes are issued in registered form for purposes of Section
163(f) of the Internal Revenue Code or in a manner such that the uncertificated
Notes are described in Section 163(f)(2)(B) of the Internal Revenue Code; (4)
to make any change in Article 10 or Article 12 of the Indenture that would
limit or terminate the benefits available to any holder of Senior Indebtedness
(or Representatives therefor) under Article 10 or Article 12 of the Indenture;
(5) add additional Guarantees with respect to the Notes; (6) secure the Notes;
(7) add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company; (8)  make any change that does not adversely
affect the legal rights or entitlements under this Indenture of any Holder to
comply with any requirement of the SEC or in connection with the qualification
of this Indenture under the TIA; or (9) enter into one or more supplemental
indentures to effect any of the amendments set forth herein or to set forth the
terms of and issue any Additional Notes in accordance with the provisions of
this Indenture.


 


Notwithstanding
the foregoing, an amendment under this paragraph 14 may not make any change
that adversely affects the rights under Article 10 or Article 12 of any holder
of Senior Indebtedness then outstanding unless the holders of such Senior
Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.


 


15.   Defaults and Remedies


 


If an Event of
Default occurs (other than an Event of Default pursuant to Section 6.01(g) or
(h)) and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the outstanding Notes may declare the principal of, premium if any,
and accrued but unpaid interest on all the Notes to be due and payable. Upon
such a declaration, such principal and interest shall be due and payable. If an
Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs, the principal of, premium, if any, and
interest on all the


 





















 


Notes shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.


 


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


 


If a Default
occurs and is continuing and is actually known to the Trustee, the Trustee must
mail to each Holder notice of the Default within the earlier of 90 days after
it occurs or 30 days after it is actually known to a Trust Officer or written
notice of it is received by the Trustee. Except in the case of a Default in the
payment of principal of, premium, if any, or interest on any Note, the Trustee
may withhold notice if and so long as a committee of its Trust Officers in good
faith determines that withholding notice is in the interests of the
Noteholders. In addition, the Company is required to deliver, to the Trustee,
within 120 days after the end of each fiscal year, a certificate indicating
whether the signers thereof know of any Event of Default that occurred during
the previous year. The Company also is required to deliver to the Trustee, within
30 days after the occurrence thereof, written notice of any event which would
constitute certain Defaults, their status and what action the Company is taking
or proposes to take in respect thereof.


 


16.   Subsequent Issuance


 


The Company
may only issue Additional Notes in accordance with Section 4.14 of the
Indenture.


 


The Company
agrees, and by purchasing the Notes each Holder shall be deemed to have agreed,
that upon the issuance by the Company of any Additional Notes, if the Company
determines that such Additional Notes were issued with original issue discount,
immediately following such issuance (and any issuance of Additional Notes
thereafter), a portion of each Holder’s Original Notes and/or Additional Notes,
as applicable, will automatically, without any action by such Holder, be
exchanged (the “Automatic Exchange”) for a portion of each other


 





















 


Holder’s Notes, such that
immediately after the Automatic Exchange, each Holder will hold Notes issued
prior to the date of issuance of such Additional Notes and such Additional
Notes in the same proportion as the ratio of the then outstanding aggregate
principal amount of such Notes to the then outstanding aggregate principal
amount of such Additional Notes.  The
aggregate stated principal amount of Notes owned by each Holder will not change
as a result of the Automatic Exchange. 
Immediately following the Automatic Exchange, the Company and the
Trustee will instruct DTC to facilitate the combination of the Notes issued prior
to the date of issuance of such Additional Notes and such Additional Notes into
indivisible units.


 


At least ten
(10) business days prior to the closing of the issuance of Additional Notes
that will result in an Automatic Exchange, the Company shall notify the
Trustee, in writing of its intention to consummate such subsequent issuance and
shall instruct the Trustee and Wells Fargo Bank, National Association, as
custodian for the benefit of the owners hereof, to take any action necessary to
effect the Automatic Exchange.  Such
notice may be revoked at any time prior to the date fixed for such Automatic
Exchange.


 


The Company
agrees, and by acceptance of beneficial ownership in the Notes each beneficial
owner of the Notes shall be deemed to have agreed, that (1) the Company will
report any “original issue discount” (as determined for U.S. federal income tax
purposes) associated with the Original Notes and Additional Notes among all
beneficial owners in proportion to their ownership of the aggregate principal
amount of Notes and (2) each beneficial owner of the Notes shall report such
original issue discount in this manner and shall not take an inconsistent
position for any applicable tax purpose.


 


17.   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 Notes 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.


 


18.   No Recourse Against
Others


 


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


 


19.   Authentication


 


This Note
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 Note.


 





















 


20.   Abbreviations


 


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


 


21.   Governing Law


 


THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  THE HOLDERS AGREE TO SUBMIT TO THE
JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH
OF MANHATTAN, IN THE CITY OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THE INDENTURE OR THIS NOTE.


 


22.   CUSIP Numbers


 


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


 


23.   Tax Treatment.  


 


By acceptance
of beneficial ownership interest in this Note each beneficial Owner of  Notes will be deemed to have agreed, (1) to
treat itself as owner of the Notes for all purposes, including the preparation
and filing of any United States federal, state, local or foreign tax return,
report, or other information; (2) to treat the Notes as indebtedness for all
tax purposes, (3) to treat the acquisition of an IDS as the acquisition of the
Notes and Common Stock which are represented by the IDS and (4) to allocate the
initial purchase price of the IDS upon original issuance between the Notes and
the Common Stock in the proportions as $                  
and $                     
respectively.


 


The Company will furnish to any Holder of
Notes upon written request and without charge to the Holder a copy of the
Indenture which has in it the text of this Note.


 





















 


ASSIGNMENT
FORM


 


To assign this Note, fill in the form below:


 


I or we assign and transfer this Note to


 


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


 


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


 


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


 


	
   

  
	
   

  
	
  Date: 

  	
   

  	
   

  	
  Your Signature: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  	
   

  



 





















 


OPTION OF HOLDER
TO ELECT PURCHASE


 


If you want to
elect to have this Note purchased by the Company pursuant to Section 4.06
(Asset Sale) or 4.09 (Change of Control) of the Indenture, check the box:


 


	
  Asset Sale 
  o

  	
   

  	
  Change of Control  o

  



 


If you want to
elect to have only part of this Note purchased by the Company pursuant to
Section 4.06 or 4.09 of the Indenture, state the amount:


 


	
  Date:

  	
   

  	
   

  	
  Your Signature: 

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee: 

  	
   

  
						



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


 





















 


EXHIBIT C


 


FORM OF
SUPPLEMENTAL INDENTURE FOR NEW GUARANTORS


 


SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”) dated as of
        , among [GUARANTOR] (the “New Guarantor”), an indirect subsidiary of OTELCO
INC. (or its successor), a Delaware corporation (the “Company “), [EXISTING GUARANTORS] and Wells
Fargo Bank, National Association, a national banking association, as trustee
under the Indenture referred to below (the “Trustee”).


 


W I T N E S S E T H :


 


WHEREAS the
Company and [OLD GUARANTORS] (the “Existing Guarantors”) have heretofore executed and
delivered to the Trustee an Indenture (the “Indenture”) dated as of
           , 2004, providing
for the issuance of an unlimited aggregate principal amount of notes (the “Notes”)
and [Original Notes have been issued and
our outstanding under the Indenture];


 


WHEREAS
Section 4.12 of the Indenture provides that under certain circumstances the
Company is required to cause the New Guarantor to execute and deliver to the
Trustee a supplemental indenture pursuant to which the New Guarantor shall
unconditionally guarantee all the Company’s obligations under the Notes pursuant
to a Guarantee on the terms and conditions set forth herein; and


 


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


 


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


 


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


 


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


 


3.             Governing Law.  THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  THE TRUSTEE, THE COMPANY, ANY OTHER OBLIGOR IN RESPECT
OF THE NOTES AND (BY THEIR ACCEPTANCE OF THE NOTES) THE HOLDERS AGREE TO SUBMIT
TO THE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE
BOROUGH OF


 





















 


MANHATTAN, IN
THE CITY OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS INDENTURE OR THE NOTES.


 


4.             Trustee Makes No Representation.  The Trustee makes no representation as to the
validity or sufficiency of this Supplemental Indenture.


 


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


 


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


 


7.             Definitions.  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.


 





















 


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


 


	
   

  	
  [NEW
  GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  OTELCO INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [EXISTING
  GUARANTORS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL

  
	
   

  	
  ASSOCIATION,
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 





















 


EXHIBIT D


 


FORM OF
SOLVENCY CERTIFICATE


 


OTELCO INC.


SOLVENCY CERTIFICATE


 


Reference is
hereby made to the Indenture (the “Indenture”), dated as of December 21, 2004
by and among Otelco Inc., a Delaware corporation (the “Company”), the Guarantors named therein
(the “Subsidiary Guarantors”) and
Wells Fargo Bank, National Association, as Trustee (the “Trustee”), governing the Company’s 13%
Senior Subordinated Notes due 2019. Capitalized terms used herein but not
defined herein shall have the meanings ascribed to them in the Indenture.


 


I,                            ,
pursuant to Section 4.14 of the Indenture, do hereby certify, in my capacity as
Chief Financial Officer of the Company, as follows:


 


(1)   [The Company is in compliance with its material
financial obligations and covenants.](1)


 


(2)   Neither the Company nor any of the Subsidiary
Guarantors intend to hinder, delay, or defraud either present or future
creditors or any other person to which the Company or each of the Subsidiary
Guarantors, respectively, is or will become, on or after the date hereof,
indebted.


 


(3)   After giving effect to the issuance of an
additional $                
million aggregate principal amount of the Company’s 13% Senior Subordinated
Notes due 2019 (the “Additional Notes”)
and the related guarantees in accordance with Sections 2.01 and 4.14 of the
Indenture and the application of the proceeds therefrom:


 


(a)           Each
of the Company and the Subsidiary Guarantors are and will be Solvent.


 


As
used herein, “Solvent” shall mean, for any person or entity on a particular
date, that on such date (A) the fair value of the property of such person or
entity is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such person or entity, (B) the present
fair saleable value of the assets of such person is not less than the amount
that will be required to pay the probable liability of such person on its debts
as they become absolute and matured, (C) such person or entity does not intend
to, and does not believe that it will, incur debts and liabilities beyond such
person’s or such entity’s ability to pay as such debts and liabilities mature,
(D) such person or entity is not engaged in a business or a transaction, and is
not about to engage in a business or a transaction, for which such person’s or
such entity’s property would constitute an unreasonably


 










(1)           Delete this
paragraph if Additional Notes are issued in connection with the exchange of
shares of Class B Common Stock of the Company outstanding on the Issue Date (as
defined in the Indenture).


 





















 


small
capital and (E) such person or entity is able to pay its debts as they become
due and payable.


 


This
certificate is of today’s date and is made pursuant to the best of my
knowledge. I have made such investigations and inquiries (including, without
limitation, of personnel and employees having familiarity with such
transactions and factual matters) as I determined to be necessary to enable me
to attest to the matters set forth in this certificate and to execute and
deliver this certificate.  As to each
statement that describes an anticipated future event or method of operation, I
have no reason to believe that such event or method of operation will not occur
as described.  I understand that the
Trustee is relying on this certificate in authenticating the Additional Notes.


 


IN WITNESS
WHEREOF, the undersigned has executed this certificate as of the          
day of             .


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title: