exv4w1





Exhibit
4.1


 

 







BASIC ENERGY SERVICES, INC.

as Issuer,


The GUARANTORS named herein


and


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee





 



INDENTURE


Dated as of July 31, 2009

 



11.625% Senior Secured Notes due 2014, Series A


11.625% Senior Secured Notes due 2014, Series B






 

 








 









 












CROSS-REFERENCE TABLE




	 	 	 
	TIA	 	Indenture
	Section	 	Section
	310(a)(1)
	 	7.10
	 (a)(2)
	 	7.10
	 (a)(3)
	 	N.A.
	 (a)(4)
	 	N.A
	 (a)(5)
	 	7.10
	 (b)
	 	7.08; 7.10; 11.02
	 (b)(1)
	 	7.10
	 (c)
	 	N.A.
	311(a)
	 	7.11
	 (b)
	 	7.11
	 (c)
	 	N.A.
	312(a)
	 	2.05
	 (b)
	 	11.03
	 (c)
	 	11.03
	313(a)
	 	7.06
	 (b)(1)
	 	7.06
	 (b)(2)
	 	7.06
	 (c)
	 	7.06; 11.02
	 (d)
	 	7.06
	314(a)
	 	4.02; 4.04; 4.08; 11.02
	 (b)
	 	12.02; 12.07; 12.09
	 (c)(1)
	 	2.02; 9.01; 12.03
	 (c)(2)
	 	 9.01; 12.03
	 (c)(3)
	 	N.A.
	 (d)
	 	12.03; 12.07; 12.08
	 (e)
	 	11.05
	 (f)
	 	N.A.
	315(a)
	 	7.01; 7.02
	 (b)
	 	.7.05; 11.02
	 (c)
	 	7.01
	 (d)
	 	6.05; 7.01; 7.02
	 (e)
	 	6.11
	316(a) (last sentence)
	 	2.09
	 (a)(1)(A)
	 	6.05
	 (a)(1)(B)
	 	6.04
	 (a)(2)
	 	8.02
	 (b)
	 	6.07
	 (c)
	 	8.04
	317(a)(1)
	 	6.08
	 (a)(2)
	 	6.09
	 (b)
	 	2.04
	318(a)
	 	11.01






N.A. means Not Applicable







 




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




-i-









 





TABLE
OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 

	 	ARTICLE 1	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.01.

	 	Definitions	 	 	1	 
	Section 1.02.

	 	Incorporation by Reference of Trust Indenture Act
	 	 	26	 
	Section 1.03.

	 	Rules of Construction
	 	 	27	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE 2	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	THE NOTES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.01.

	 	Form and Dating
	 	 	27	 
	Section 2.02.

	 	Execution and Authentication
	 	 	28	 
	Section 2.03.

	 	Registrar and Paying Agent	 	 	29	 
	Section 2.04.

	 	Paying Agent to Hold Assets in Trust
	 	 	29	 
	Section 2.05.

	 	Noteholder Lists 	 	 	29	 
	Section 2.06.

	 	Transfer and Exchange
	 	 	29	 
	Section 2.07.

	 	Replacement Notes
	 	 	30	 
	Section 2.08.

	 	Outstanding Notes
	 	 	30	 
	Section 2.09.

	 	Treasury Notes
	 	 	31	 
	Section 2.10.

	 	Temporary Notes
	 	 	31	 
	Section 2.11.

	 	Cancellation
	 	 	31	 
	Section 2.12.

	 	Defaulted Interest
	 	 	31	 
	Section 2.13.

	 	Deposit of Moneys
	 	 	32	 
	Section 2.14.

	 	CUSIP Number
	 	 	32	 
	Section 2.15.

	 	Book-Entry Provisions for Global Notes
	 	 	32	 
	Section 2.16.

	 	Registration of Transfers and Exchanges
	 	 	33	 
	Section 2.17.

	 	Restrictive Legends
	 	 	37	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE 3	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	REDEMPTION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.01.

	 	Notices to Trustee
	 	 	39	 
	Section 3.02.

	 	Selection of Notes to be Redeemed
	 	 	39	 
	Section 3.03.

	 	Notice of Redemption
	 	 	39	 
	Section 3.04.

	 	Effect of Notice of Redemption
	 	 	40	 
	Section 3.05.

	 	Deposit of Redemption Price
	 	 	40	 
	Section 3.06.

	 	Notes Redeemed in Part
	 	 	41	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE 4	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.01.

	 	Payment of Notes
	 	 	41	 
	Section 4.02.

	 	Reports to Holders
	 	 	41	 






-ii-









 






	 	 	 	 	 	 	 
	Section 4.03.

	 	Waiver of Stay, Extension or Usury Laws
	 	 	42	 
	Section 4.04.

	 	Compliance Certificate; Notice of Default; Tax Information
	 	 	42	 
	Section 4.05.

	 	Payment of Taxes and Other Claims
	 	 	43	 
	Section 4.06.

	 	Corporate Existence
	 	 	43	 
	Section 4.07.

	 	Maintenance of Office or Agency
	 	 	44	 
	Section 4.08.

	 	Compliance with Laws
	 	 	44	 
	Section 4.09.

	 	Maintenance of Properties and Collateral and Insurance
	 	 	44	 
	Section 4.10.

	 	Limitations on Additional Indebtedness
	 	 	45	 
	Section 4.11.

	 	Limitations on Restricted Payments
	 	 	47	 
	Section 4.12.

	 	Limitations on Asset Sales and Collateral Dispositions
	 	 	49	 
	Section 4.13.

	 	Limitations on Transactions with Affiliates
	 	 	54	 
	Section 4.14.

	 	Limitation on Liens
	 	 	55	 
	Section 4.15.

	 	Change of Control
	 	 	56	 
	Section 4.16.

	 	Limitations on Dividend and Other Restrictions Affecting Restricted
Subsidiaries
	 	 	57	 
	Section 4.17.

	 	[RESERVED]
	 	 	59	 
	Section 4.18.

	 	Conduct of Business
	 	 	59	 
	Section 4.19.

	 	Limitations on Designation of Unrestricted Subsidiaries
	 	 	59	 
	Section 4.20.

	 	Additional Note Guarantees
	 	 	60	 
	Section 4.21.

	 	Limitations on Layering Indebtedness
	 	 	61	 
	 

	 	ARTICLE 5	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	SUCCESSOR CORPORATION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.01.

	 	Limitations on Mergers, Consolidations, Etc.
	 	 	61	 
	Section 5.02.

	 	Successor Person Substituted
	 	 	63	 
	 

	 	ARTICLE 6	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DEFAULTS AND REMEDIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.01.

	 	Events of Default
	 	 	63	 
	Section 6.02.

	 	Acceleration
	 	 	65	 
	Section 6.03.

	 	Other Remedies
	 	 	65	 
	Section 6.04.

	 	Waiver of Past Defaults and Events of Default
	 	 	66	 
	Section 6.05.

	 	Control by Majority
	 	 	66	 
	Section 6.06.

	 	Limitation on Suits
	 	 	66	 
	Section 6.07.

	 	Rights of Holders To Receive Payment
	 	 	67	 
	Section 6.08.

	 	Collection Suit by Trustee
	 	 	67	 
	Section 6.09.

	 	Trustee May File Proofs of Claim
	 	 	67	 
	Section 6.10.

	 	Priorities
	 	 	68	 
	Section 6.11.

	 	Undertaking for Costs
	 	 	68	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE 7	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	TRUSTEE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.01.

	 	Duties of Trustee
	 	 	69	 
	Section 7.02.

	 	Rights of Trustee
	 	 	70	 






-iii-









 






	 	 	 	 	 	 	 
	Section 7.03.

	 	Individual Rights of Trustee
	 	 	71	 
	Section 7.04.

	 	Trustee’s Disclaimer
	 	 	71	 
	Section 7.05.

	 	Notice of Defaults
	 	 	71	 
	Section 7.06.

	 	Reports by Trustee to Holders
	 	 	72	 
	Section 7.07.

	 	Compensation and Indemnity
	 	 	72	 
	Section 7.08.

	 	Replacement of Trustee
	 	 	73	 
	Section 7.09.

	 	Successor Trustee by Consolidation, Merger or Conversion
	 	 	74	 
	Section 7.10.

	 	Eligibility; Disqualification
	 	 	74	 
	Section 7.11.

	 	Preferential Collection of Claims Against the Issuer
	 	 	74	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE 8	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	AMENDMENTS, SUPPLEMENTS AND WAIVERS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.01.

	 	Without Consent of Holders
	 	 	74	 
	Section 8.02.

	 	With Consent of Holders
	 	 	75	 
	Section 8.03.

	 	Compliance with TIA
	 	 	76	 
	Section 8.04.

	 	Revocation and Effect of Consents
	 	 	76	 
	Section 8.05.

	 	Notation on or Exchange of Notes
	 	 	77	 
	Section 8.06.

	 	Trustee To Sign Amendments, etc.
	 	 	77	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE 9	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DISCHARGE OF INDENTURE; DEFEASANCE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.01.

	 	Satisfaction and Discharge of Indenture
	 	 	77	 
	Section 9.02.

	 	Legal Defeasance
	 	 	78	 
	Section 9.03.

	 	Covenant Defeasance
	 	 	79	 
	Section 9.04.

	 	Conditions to Legal Defeasance or Covenant Defeasance
	 	 	79	 
	Section 9.05.

	 	Application of Trust Money
	 	 	81	 
	Section 9.06.

	 	Repayment to the Issuer
	 	 	81	 
	Section 9.07.

	 	Reinstatement
	 	 	82	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE 10	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	GUARANTEES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.01.

	 	Unconditional Guarantee
	 	 	82	 
	Section 10.02.

	 	Severability
	 	 	83	 
	Section 10.03.

	 	Limitation on Guarantor’s Liability
	 	 	83	 
	Section 10.04.

	 	Successors and Assigns
	 	 	84	 
	Section 10.05.

	 	No Waiver
	 	 	84	 
	Section 10.06.

	 	Release of Guarantor
	 	 	84	 
	Section 10.07.

	 	Execution of Supplemental Indenture for Future Guarantors
	 	 	85	 
	Section 10.08.

	 	Notation of Note Guarantee
	 	 	85	 
	Section 10.09.

	 	Subordination of Subrogation and Other Rights
	 	 	85	 






-iv-









 






	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE 11	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	MISCELLANEOUS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 11.01.

	 	TIA Controls
	 	 	86	 
	Section 11.02.

	 	Notices
	 	 	86	 
	Section 11.03.

	 	Communications by Holders with Other Holders
	 	 	87	 
	Section 11.04.

	 	Certificate and Opinion as to Conditions Precedent
	 	 	87	 
	Section 11.05.

	 	Statements Required in Certificate and Opinion
	 	 	88	 
	Section 11.06.

	 	Rules by Trustee and Agents
	 	 	88	 
	Section 11.07.

	 	Legal Holidays
	 	 	88	 
	Section 11.08.

	 	Governing Law
	 	 	88	 
	Section 11.09.

	 	No Adverse Interpretation of Other Agreements
	 	 	88	 
	Section 11.10.

	 	No Recourse Against Others
	 	 	88	 
	Section 11.11.

	 	Successors
	 	 	89	 
	Section 11.12.

	 	Consent to Jurisdiction; Waiver of Immunities
	 	 	89	 
	Section 11.13.

	 	Multiple Counterparts
	 	 	89	 
	Section 11.14.

	 	Table of Contents, Headings, etc.
	 	 	89	 
	Section 11.15.

	 	Separability
	 	 	89	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE 12	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	COLLATERAL AND SECURITY	 	 	 	 
	 
	 	 	 	 	 	 
	Section 12.01.

	 	Security Documents
	 	 	90	 
	Section 12.02.

	 	Recording, Registration and Opinions; Trustee’s Disclaimer Regarding
Collateral
	 	 	90	 
	Section 12.03.

	 	Possession, Use and Release of Collateral
	 	 	91	 
	Section 12.04.

	 	Suits to Protect Collateral
	 	 	94	 
	Section 12.05.

	 	Powers Exercisable by Receiver or Trustee
	 	 	94	 
	Section 12.06.

	 	Determinations Relating to Collateral
	 	 	94	 
	Section 12.07.

	 	Certificates of the Issuer and the Guarantors
	 	 	95	 
	Section 12.08.

	 	Certificates of the Trustee
	 	 	95	 
	Section 12.09.

	 	Purchase Protected
	 	 	95	 
	 
	Signatures

	 	 	 	 	S-1	 






EXHIBITS




	 	 	 	 	 	 	 
	Exhibit A

	 	Form of Series A Note
	 	A-1
	Exhibit B

	 	Form of Series B Note
	 	B-1
	Exhibit C

	 	Form of Certificate to Be Delivered Upon Exchange or Registration
of Transfer of Notes
	 	C-1
	Exhibit D

	 	Form of Transferee Letter of Representation
	 	D-1
	Exhibit E

	 	Form of Certificate to Be Delivered in Connection with
Regulation S Transfers
	 	E-1
	Exhibit F

	 	Form of Supplemental Indenture
	 	F-1






 -v- 












 





          INDENTURE, dated as of July 31, 2009, among Basic Energy Services, Inc., a Delaware
corporation (the “Issuer”), each of the GUARANTORS (as defined herein) and The Bank of New
York Mellon Trust Company, N.A., a national banking association, as trustee (the
“Trustee”).




          The Issuer has duly authorized the creation of an issue of 11.625% Senior Secured Notes due
2014, Series A (the “Initial Notes”) and 11.625% Senior Secured Notes due 2014, Series B
(the “Exchange Notes”) and, to provide therefor, the Issuer and each Guarantor has duly
authorized the execution and delivery of this Indenture. All things necessary to make the Notes,
when duly issued and executed by the Issuer, and authenticated and delivered hereunder, the valid
obligations of the Issuer, and to make this Indenture a valid and binding agreement of the Issuer
and the Guarantors, have been done.




          Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders:




ARTICLE 1




DEFINITIONS AND INCORPORATION BY REFERENCE



Section 1.01. Definitions. The terms defined in this Section 1.01 have the meanings
indicated herein. Other capitalized terms used in this Indenture are defined elsewhere in this
Indenture.




                    “Acquired Indebtedness” means (1) with respect to any Person that becomes a Restricted
Subsidiary after the Issue Date, Indebtedness of such Person and its Subsidiaries (including, for
the avoidance of doubt, Indebtedness incurred in the ordinary course of such Person’s business to
acquire assets used or useful in its business) existing at the time such Person becomes a
Restricted Subsidiary that was not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary and (2) with respect to the Issuer or any Restricted Subsidiary,
any Indebtedness of a Person (including, for the avoidance of doubt, Indebtedness incurred in the
ordinary course of such Person’s business to acquire assets used or useful in its business), other
than the Issuer or a Restricted Subsidiary, existing at the time such Person is merged with or into
the Issuer or a Restricted Subsidiary, or Indebtedness expressly assumed by the Issuer or any
Restricted Subsidiary in connection with the acquisition of an asset or assets from another Person,
which Indebtedness was not, in any case, incurred by such other Person in connection with, or in
contemplation of, such merger or acquisition.




                    “Affiliate” of any Person means any other Person which directly or indirectly controls or is
controlled by, or is under direct or indirect common control with, the referent Person. For
purposes of Section 4.13, Affiliates shall be deemed to include, with respect to any Person, any
other Person (1) which beneficially owns or holds, directly or indirectly, 10% or more of any class
of the Voting Stock of the referent Person, (2) of which 10% or more of the Voting Stock is
beneficially owned or held, directly or indirectly, by the referenced Person or (3) with respect to
an individual, any immediate family member of such Person. For purposes of this definition,
“control” of a Person shall mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise.




                    “Agent” means any Registrar, Paying Agent, co-Registrar, Authenticating Agent or agent
for services of notices and demands.




                    Unless
the context otherwise requires, “amend” means to amend, supplement, restate, amend and
restate or otherwise modify, including successively, and “amendment” shall have a correlative
meaning.




1









 








          “Applicable Premium” means, as to each Note on any applicable Redemption Date, an
amount equal to the greater of




          (1) 1.0% of the principal amount of such Note; and




          (2) the excess, if any, of:





     (a) the present value at such Redemption Date of (i) the Redemption Price of
such Note at February 1, 2012 (such Redemption Price being set forth in the table
appearing in paragraph 5 of such Note) plus (ii) all required interest payments
(excluding accrued and unpaid interest to such Redemption Date) due on such Note
through February 1, 2012, computed using a discount rate equal to the Treasury Rate
as of such Redemption Date plus 50 basis points; over




     (b) the principal amount of such Note.



          Unless the context otherwise requires, “asset” means any asset or property.




          “Asset Acquisition” means





     (1) an Investment by the Issuer or any Restricted Subsidiary of the Issuer in any other
Person if, as a result of such Investment, such Person shall become a Restricted Subsidiary
of the Issuer, or shall be merged with or into the Issuer or any Restricted Subsidiary of
the Issuer, or




     (2) the acquisition by the Issuer or any Restricted Subsidiary of the Issuer of all or
substantially all of the assets of any other Person (other than a Restricted Subsidiary of
the Issuer) or any division or line of business of any such other Person (other than in the
ordinary course of business).



          “Asset Sale” means any sale, issuance, conveyance, transfer, lease, assignment or
other disposition by the Issuer or any Restricted Subsidiary to any Person other than the Issuer or
any Restricted Subsidiary (including by means of a sale and leaseback transaction or a merger or
consolidation) (collectively, for purposes of this definition, a
“transfer”), in one transaction or
a series of related transactions, of any assets of the Issuer or any of its Restricted Subsidiaries
other than in the ordinary course of business. For purposes of this definition, the term “Asset Sale” shall not include:





     (1) transfers of cash or Cash Equivalents;




     (2) transfers of assets (including Equity Interests) that are governed by, and made in
accordance with, Section 4.15 or Article 5;




     (3) Permitted Investments and Restricted Payments permitted under Section 4.11;




     (4) the creation of or realization on any Lien permitted under this Indenture or the
Security Documents and any disposition of assets resulting from the enforcement or
foreclosure of any such Lien;




     (5) transfers of damaged, worn-out or obsolete equipment or assets that, in the
Issuer’s reasonable judgment, are no longer used or useful in the business of the Issuer or
its Restricted Subsidiaries;



2









 







     (6) sales or grants of licenses or sublicenses to use the patents, trade secrets,
know-how and other intellectual property, and licenses, leases or subleases of other assets,
of the Issuer or any Restricted Subsidiary to the extent not materially interfering with the
business of the Issuer and the Restricted Subsidiaries;




     (7) any sale, lease, conveyance or other disposition of any assets or any sale or
issuance of Equity Interests in each case, made pursuant to a Permitted Joint Venture
Investment;




     (8) the trade or exchange by the Issuer or any Restricted Subsidiary of any asset for
any other asset or assets; provided, that the Fair Market Value of the asset or assets
received by the Issuer or any Restricted Subsidiary in such trade or exchange (including any
such cash or Cash Equivalents) is at least equal to the Fair Market Value (as determined in
good faith by the Board of Directors or an executive officer of the Issuer or of such
Restricted Subsidiary with responsibility for such transaction, which determination shall be
conclusive evidence of compliance with this provision) of the asset or assets disposed of by
the Issuer or any Restricted Subsidiary pursuant to such trade or exchange; and, provided,
further, that if any cash or Cash Equivalents are used in such trade or exchange to achieve
an exchange of equivalent value, that the amount of such cash and/or Cash Equivalents shall
be deemed proceeds of an “Asset Sale,” subject to the following clause (9); and




     (9) any transfer or series of related transfers that, but for this clause, would be
Asset Sales, if after giving effect to such transfers, the aggregate Fair Market Value of
the assets transferred in such transaction or any such series of related transactions does
not exceed $3.0 million per occurrence or $10.0 million in any fiscal year.



          “Board of Directors” means, with respect to any Person, (i) in the case of any
corporation, the board of directors of such Person, (ii) in the case of any partnership, the Board
of Directors of the general partner of such Person and (iii) in any other case, the functional
equivalent of the foregoing or, in each case, other than for purposes of the definition of “Change
of Control,” any duly authorized committee of such body.




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




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




          “Capitalized Lease” means a lease required to be capitalized for financial reporting
purposes in accordance with GAAP.




          “Capitalized Lease Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under a Capitalized Lease, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.




          “Cash Equivalents” means:




3









 









     (1) marketable obligations issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided, that the full
faith and credit of the United States of America is pledged in support thereof), maturing
within 360 days of the date of acquisition thereof;




     (2) demand and time deposits and certificates of deposit of any lender under any Credit
Facility or any commercial bank having, or which is the principal banking subsidiary of a
bank holding company organized under the laws of the United States, any state thereof or the
District of Columbia having, capital and surplus aggregating in excess of $300.0 million and
a rating of “A” (or such other similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) maturing within 360 days of the date of acquisition by such Person;




     (3) commercial paper issued by any Person incorporated in the United States rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody’s or an equivalent rating by a nationally recognized rating agency if both S&P and
Moody’s cease publishing ratings of commercial paper issuers generally, and in each case
maturing not more than one year after the date of acquisition by such Person;




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




     (5) securities issued and fully guaranteed by any state, commonwealth or territory of
the United States of America, or by any political subdivision or taxing authority thereof,
rated at least “A” by Moody’s or S&P and having maturities of not more than one year from
the date of acquisition;




     (6) investments in money market or other mutual funds substantially all of whose assets
comprise securities of the types described in clauses (1) through (5) above; and




     (7) demand deposit accounts maintained in the ordinary course of business.




     “Certificated Notes” means one or more certificated Notes in registered form.




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




     (1) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Issuer and its Restricted Subsidiaries,
taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange
Act) other than a Permitted Holder;




     (2) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more 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 that person or group shall be deemed to have “beneficial ownership” of all
securities 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 Voting Stock
representing 50% or



4









 






more of the voting power of the total outstanding Voting Stock of the
Issuer; provided, however, that such event shall not be deemed to be a Change of Control so
long as the Permitted Holders own Voting Stock representing in the aggregate a greater
percentage of the total voting power of the Voting Stock of the Issuer than such other
person or group;




     (3) during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors (together with any new directors whose
election to such Board of Directors or whose nomination for election by the stockholders of
the Issuer was approved by a vote of 66 2/3% of the directors of the Issuer then still in
office who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Issuer; and




     (4) the adoption by the stockholders of the Issuer of a Plan of Liquidation.



          For purposes of this definition, a Person shall not be deemed to have beneficial ownership of
securities subject to a stock purchase agreement, merger agreement or similar agreement until the
consummation of the transactions contemplated by such agreement.




          “Collateral” means the collateral from time to time described in or contemplated by
the Security Documents.




          “Collateral Disposition” means any sale, transfer or other disposition to the extent
involving assets or other rights or property that constitute Collateral. The sale or issuance of
Equity Interests in a Restricted Subsidiary that owns Collateral such that it thereafter is no
longer a Restricted Subsidiary shall be deemed to be a Collateral Disposition of the Collateral
owned by such Restricted Subsidiary.




          “Collateral Proceeds Offer” has the meaning given to this term in Section 4.12(l)(1).




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




          “Consolidated Amortization Expense” for any period means the amortization expense of
the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.




          “Consolidated Cash Flow” for any period means, without duplication, the sum of the
amounts for such period of





     (1) Consolidated Net Income, plus




     (2) in each case only to the extent (and in the same proportion) deducted in
determining Consolidated Net Income and with respect to the portion of Consolidated Net
Income attributable to any Restricted Subsidiary only if a corresponding amount would be
permitted at the date of determination to be distributed to the Issuer by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements,



5









 







instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to such Restricted Subsidiary or its stockholders,




     (a) Consolidated Income Tax Expense,




     (b) Consolidated Amortization Expense (but only to the extent not included in
Consolidated Interest Expense),




     (c) Consolidated Depreciation Expense,




     (d) Consolidated Interest Expense, and




     (e) all other non-cash items reducing the Consolidated Net Income (excluding
any non-cash charge that results in an accrual of a reserve for cash charges in any
future period) for such period,



     in each case determined on a consolidated basis in accordance with GAAP, minus




     (3) the aggregate amount of all non-cash items, determined on a consolidated basis, to
the extent such items increased Consolidated Net Income for such period.



          “Consolidated Depreciation Expense” for any period means the depreciation expense of
the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.




          “Consolidated Income Tax Expense” for any period means the provision for taxes of the
Issuer and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP.




          “Consolidated Interest Coverage Ratio” means the ratio of Consolidated Cash Flow
during the most recent four consecutive full fiscal quarters for which financial statements are
available (the “Four-Quarter Period”) ending on or prior to the date of the transaction
giving rise to the need to calculate the Consolidated Interest Coverage Ratio (the “Transaction
Date”) to Consolidated Interest Expense for the Four-Quarter Period. For purposes of this
definition, Consolidated Cash Flow and Consolidated Interest Expense shall be calculated after
giving effect on a pro forma basis for the period of such calculation to:





     (1) the incurrence of any Indebtedness or the issuance of any Preferred Stock of the
Issuer or any Restricted Subsidiary (and the application of the proceeds thereof) and any
repayment, repurchase or redemption of other Indebtedness or other Preferred Stock (and the
application of the proceeds therefrom) (other than the incurrence or repayment of
Indebtedness in the ordinary course of business for working capital purposes pursuant to any
revolving credit arrangement) occurring during the Four-Quarter Period or at any time
subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction
Date, as if such incurrence, repayment, repurchase, issuance or redemption, as the case may
be (and the application of the proceeds thereof), occurred on the first day of the
Four-Quarter Period; and




     (2) any Asset Sale or Asset Acquisition (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of the Issuer or
any Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary as a
result of such



6









 






Asset Acquisition) incurring Acquired Indebtedness and also including any
Consolidated Cash Flow (including any pro forma expense and cost reductions calculated in
good faith on a reasonable basis by a responsible financial or accounting Officer of the
Issuer) occurring during the Four-Quarter Period or at any time subsequent to the last day
of the Four-Quarter Period and on or prior to the Transaction Date), as if such Asset Sale
or Asset Acquisition (including the incurrence of, or assumption or liability for, any such
Indebtedness or Acquired Indebtedness) occurred on the first day of the Four-Quarter Period;
provided, that the Officer making the pro forma calculation described above may in his
discretion include any pro forma changes to Consolidated Cash Flow, including any pro forma
reductions of expenses and costs, that have occurred or are reasonably expected by such
Officer to occur within one year of closing of such Asset Sale or Asset Acquisition
(regardless of whether such expense or cost savings or any other operating improvements
could then be reflected properly in pro forma financial statements prepared in accordance
with Regulation S-X under the Securities Act or any other regulation or policy of the
Commission).




           
In calculating Consolidated Interest Expense for purposes of determining the denominator (but
not the numerator) of this Consolidated Interest Coverage Ratio:




     (1) interest on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be deemed to
have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date;




     (2) if interest on any Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor of a prime or similar rate,
a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on
the Transaction Date will be deemed to have been in effect during the Four-Quarter Period;
and




     (3) notwithstanding clause (1) or (2) above, interest on Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements relating to Hedging
Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect
to the operation of these agreements.



          “Consolidated Interest Expense” for any period means the sum, without duplication, of
the total interest expense of the Issuer and the Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP and including, without duplication,





     (1) imputed interest on Capitalized Lease Obligations,




     (2) commissions, discounts and other fees and charges owed with respect to letters of
credit securing financial obligations, bankers’ acceptance financing and receivables
financings,




     (3) the net costs associated with Hedging Obligations related to interest rates,




     (4) amortization of debt issuance costs, debt discount or premium and other financing
fees and expenses,




     (5) the interest portion of any deferred payment obligations,



7









 






     (6) all other non-cash interest expense,




     (7) capitalized interest,




     (8) all dividend payments on any series of Disqualified Equity Interests of the Issuer
or any of its Restricted Subsidiaries or any Preferred Stock of any Restricted Subsidiary
(other than dividends on Equity Interests payable solely in Qualified Equity Interests of
the Issuer or to the Issuer or a Restricted Subsidiary of the Issuer),




     (9) all interest payable with respect to discontinued operations, and




     (10) all interest on any Indebtedness described in clause (7) or (8) of the definition
of Indebtedness.




           
“Consolidated Leverage Ratio” means, at the time of determination, the ratio of the
total Indebtedness of the Issuer and its Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP, to Consolidated Cash Flow during the most recent four consecutive
full fiscal quarters for which financial statements are available ending on or prior to the date of
the event giving rise to the determination (with Consolidated Cash Flow being calculated for such
purpose on a pro forma basis in the same manner as it would be calculated for purposes of the
definition of Consolidated Interest Coverage Ratio).




           
“Consolidated Net Income” for any period means the net income (or loss) of the Issuer
and the Restricted Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded from such net income (to the extent otherwise
included therein), without duplication:




     (1) the net income (or loss) of any Person (other than a Restricted Subsidiary) in
which any Person other than the Issuer and the Restricted Subsidiaries has an ownership
interest, except to the extent that cash in an amount equal to any such income has actually
been received by the Issuer or any of its Restricted Subsidiaries during such period;




     (2) except to the extent includible in the Consolidated Net Income of the Issuer
pursuant to the foregoing clause (1), the net income (or loss) of any Person that accrued
prior to the date that (a) such Person becomes a Restricted Subsidiary or is merged into or
consolidated with the Issuer or any Restricted Subsidiary or (b) the assets of such Person
are acquired by the Issuer or any Restricted Subsidiary;




     (3) the net income of any Restricted Subsidiary during such period to the extent that
the declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of that income is not permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary during such period, except that the Issuer’s equity in a net
loss of any such Restricted Subsidiary for such period shall be included in determining
Consolidated Net Income;




     (4) for the purposes of calculating the Restricted Payments Basket only, in the case of
a successor to the Issuer by consolidation, merger or transfer of its assets, any income (or
loss) of the successor prior to such merger, consolidation or transfer of assets;



8









 






     (5) other than for purposes of calculating the Restricted Payments Basket, any gain (or
loss), together with any related provisions for taxes on any such gain (or the tax effect of
any such loss), realized during such period by the Issuer or any Restricted Subsidiary upon
(a) the acquisition of any securities, or the extinguishment of any Indebtedness, of the
Issuer or any Restricted Subsidiary or (b) any Asset Sale by the Issuer or any Restricted
Subsidiary;




     (6) gains and losses due solely to fluctuations in currency values and the related tax
effects according to GAAP;




     (7) unrealized gains and losses with respect to Hedging Obligations;




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




     (9) other than for purposes of calculating the Restricted Payments Basket, any
extraordinary or nonrecurring gain (or extraordinary or nonrecurring loss), together with
any related provision for taxes on any such extraordinary or nonrecurring gain (or the tax
effect of any such extraordinary or nonrecurring loss), realized by the Issuer or any
Restricted Subsidiary during such period.




     In addition, any return of capital with respect to an Investment that increased the
Restricted Payments Basket pursuant to clause (3)(D) of clause (a) of Section 4.11 or
decreased the amount of Investments outstanding pursuant to clause (16) of the definition of
“Permitted Investments” shall be excluded from Consolidated Net Income for purposes of
calculating the Restricted Payments Basket.


For
purposes of this definition of “Consolidated Net Income,”
“nonrecurring” means any gain or loss
as of any date that is not reasonably likely to recur within the two years following such date;
provided, that if there was a gain or loss similar to such gain or loss within the two years
preceding such date, such gain or loss shall not be deemed nonrecurring.




          “Consolidated Tangible Assets” means, with respect to any Person as of any date, the
amount which, in accordance with GAAP, would be set forth under the caption “Total Assets” (or any
like caption) on a consolidated balance sheet of such Person and its Restricted Subsidiaries, less
all goodwill, patents, tradenames, trademarks, copyrights, franchises, experimental expenses,
organization expenses and any other amounts classified as intangible assets in accordance with
GAAP.




          “Contingent Obligation” shall mean, as to any Person, any obligation, agreement,
understanding or arrangement of such Person guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other obligations (“primary obligations”) of any other Person (the
“primary obligor” ) in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security therefor; (b) to
advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor; (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; (d) with respect to bankers’
acceptances and letters of credit, until a reimbursement obligation arises (which obligation shall
constitute Indebtedness); or (e) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term “Contingent
Obligation” shall not include endorsements



9









 






of instruments for deposit or collection in the ordinary course of business or any product
warranties for deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made (or, if less, the
maximum amount of such primary obligation for which such Person may be liable, whether severally or
jointly, pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by such Person in good faith.




          “Corporate Trust Office” means the office of the Trustee in Houston, Texas at which at
any particular time its corporate trust business shall be principally administered, which office at
the date of execution of this Indenture is located at 601 Travis, 16th Floor, Houston,
TX 77002, Attention: Corporate Trust Officer, or such other address as the Trustee may designate
from time to time by notice to the Holders and the Issuer, or the principal corporate trust office
of any successor Trustee (or such other address as such successor Trustee may designate from time
to time by notice to the Holders and the Issuer)..




          “Coverage Ratio Exception” has the meaning set forth in the proviso in clause (a) of
Section 4.10.




          “Credit Agreement” means the Fourth Amended and Restated Credit Agreement dated as of
October 3, 2003, as amended and restated through and including February 3, 2007 by and among the
Issuer, as Borrower, the subsidiary guarantors party thereto, Bank of America, N.A. as syndication
agent, Capital One National Association and BNP Paribas as co-documentation agents, UBS AG,
Stamford Branch, as issuing bank, administrative agent and collateral agent and the other lenders
named therein, including any notes, guarantees, collateral and security documents, instruments and
agreements executed in connection therewith (including Hedging Obligations related to the
Indebtedness incurred thereunder), and in each case as further amended or refinanced from time to
time.




          “Credit Facilities” means one or more debt facilities (which may be outstanding at the
same time, but excluding for the purposes of clarification, this Indenture) providing for revolving
credit loans, term loans or letters of credit and, in each case, as such agreements may be amended,
refinanced or otherwise restructured, in whole or in part from time to time (including increasing
the amount of available borrowings thereunder or adding Subsidiaries of the Issuer as additional
borrowers or guarantors thereunder) with respect to all or any portion of the Indebtedness under
such agreement or agreements or any successor or replacement agreement or agreements and whether by
the same or any other agent, lender or group of lenders.




          “Default” means (1) any Event of Default or (2) any event, act or condition that,
after notice or the passage of time or both, would be an Event of Default.




          “Depository” means, with respect to the Notes issued in the form of one or more Global
Notes, The Depository Trust Company or another Person designated as Depository by the Issuer, which
Person must be a clearing agency registered under the Exchange Act.




          “Designation” has the meaning given to this term in Section 4.19.




          “Designation Amount” has the meaning given to this term in the covenant described
under Section 4.19.




10









 








          “Disqualified Equity Interests” of any Person means any class of Equity Interests of
such Person that, by its terms, or by the terms of any related agreement or of any security into
which it is convertible, puttable or exchangeable (in each case, at the option of the holder
thereof), is, or upon the happening of any event or the passage of time would be, required to be
redeemed by such Person, at the option of the holder thereof, or matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to
the date which is 91 days after the final maturity date of the Notes; provided, however, that any
class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in
full its obligations with respect to the payment of dividends or upon maturity, redemption
(pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of
Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable
or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be
Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto
solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided,
further, however, that any Equity Interests that would not constitute Disqualified Equity Interests
but for provisions thereof giving holders thereof (or the holders of any security into or for which
such Equity Interests are convertible, exchangeable or exercisable) the right to require the Issuer
to repurchase or redeem such Equity Interests upon the occurrence of a change in control or an
asset sale occurring prior to the 91st day after the final maturity date of the Notes shall not
constitute Disqualified Equity Interests if the change of control or asset sale provisions
applicable to such Equity Interests are no more favorable to such holders than the provisions of
Section 4.15 and Section 4.12, respectively, and such Equity Interests specifically provide that
the Issuer will not repurchase or redeem any such Equity Interests pursuant to such provisions
prior to the Issuer’s purchase of the Notes as required pursuant to the provisions of Section 4.15
and Section 4.12, respectively.




          “Domestic Restricted Subsidiary” means (i) each Restricted Subsidiary of the Issuer
organized or existing under the laws of the United States, any state thereof or the District of
Columbia and (ii) any other Restricted Subsidiary that guarantees any Indebtedness under any Credit
Facility.




          “Earn Out Obligation” means those contingent obligations of the Issuer incurred in
favor of a seller (or other third party entitled thereto) under or with respect to any Permitted
Acquisition (as such term is defined in the Credit Agreement as of the Issue Date).




          “Equity Interests” of any Person means (1) any and all shares or other equity
interests (including common stock, preferred stock, limited liability company interests and
partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether
or not currently exercisable), participations or other equivalents of or interests in (however
designated) such shares or other interests in such Person, but excluding from all of the foregoing
any debt securities convertible into Equity Interests, regardless of whether such debt securities
include any right of participation with Equity Interests.




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




          “Exchange Notes” has the meaning provided in the preamble of this Indenture.




          “Fair Market Value” means, with respect to any asset, the price (after taking into
account any liabilities relating to such assets) that would be negotiated in an arm’s-length
transaction for cash between a willing seller and a willing and able buyer, neither of which is
under any compulsion to complete the transaction, as such price is determined in good faith by the
Board of Directors of the Issuer or a duly authorized committee thereof, as evidenced by a
resolution of such Board of Directors or committee.




11









 








          “fiscal year” means the twelve-month period ending each December 31.




          “Foreign Restricted Subsidiary” means any Restricted Subsidiary of the Issuer other
than a Domestic Restricted Subsidiary.




          “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 may be approved by a significant segment of the
accounting profession of the United States, as in effect from time to time.




          “guarantee” means a direct or indirect guarantee by any Person of any Indebtedness of any
other Person and includes any obligation, direct or indirect, contingent or otherwise, of such
Person (1) to purchase or pay (or advance or supply funds for the purchase or payment of)
Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keepwell, to purchase assets, goods, securities or services (unless such purchase
arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to
take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part); “guarantee,”
when used as a verb, and “guaranteed” have correlative meanings.




          “Guarantors” means each Domestic Restricted Subsidiary of the Issuer on the Issue Date other
than Basic Energy Services International, LLC, and each other Person that is required to, or at the
election of the Issuer does, become a Guarantor by the terms of this Indenture after the Issue
Date, in each case, until such Person is released from its Note Guarantee in accordance with the
terms of this Indenture.




          “Hedging Obligations” of any Person means the obligations of such Person under swap,
cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates,
currency exchange rates or commodity prices, either generally or under specific contingencies.




          “Holder” means any registered holder, from time to time, of the Notes.




          “incur” means, with respect to any Indebtedness or Obligation, incur, create, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with
respect to such Indebtedness or Obligation; provided that (1) the Indebtedness of a Person existing
at the time such Person became a Restricted Subsidiary of the Issuer shall be deemed to have been
incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the Issuer
and (2) neither the accrual of interest nor the accretion of original issue discount or the
accretion or accumulation of dividends on any Equity Interests shall be deemed to be an incurrence
of Indebtedness.




          “Indebtedness” of any Person at any date means, without duplication:





     (1) all liabilities, contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof);




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



12









 






     (3) all reimbursement obligations of such Person in respect of letters of credit,
letters of guaranty, bankers’ acceptances and similar credit transactions;




     (4) all obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred by such Person in
the ordinary course of business in connection with obtaining goods, materials or services;




     (5) the maximum fixed redemption or repurchase price of all Disqualified Equity
Interests of such Person;




     (6) all Capitalized Lease Obligations of such Person;




     (7) all Indebtedness of others secured by a Lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person;




     (8) all Indebtedness of others guaranteed by such Person to the extent of such
guarantee; provided that Indebtedness of the Issuer or its Subsidiaries that is guaranteed
by the Issuer or the Issuer’s Subsidiaries shall only be counted once in the calculation of
the amount of Indebtedness of the Issuer and its Subsidiaries on a consolidated basis;




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




     (10) all obligations of such Person under conditional sale or other title retention
agreements relating to assets purchased by such Person; and




     (11) all Contingent Obligations (other than Earn Out Obligations) of such Person in
respect of Indebtedness or obligations of others of the kinds referred to in clauses (1)
through (10) above.



          The amount of any Indebtedness which is incurred at a discount to the principal amount at
maturity thereof as of any date shall be deemed to have been incurred at the accreted value thereof
as of such date. The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above, the maximum liability of
such Person for any such contingent obligations at such date and, in the case of clause (7), the
lesser of (a) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of
others on the date that the Lien attaches and (b) the amount of the Indebtedness secured. For
purposes of clause (5), the “maximum fixed redemption or repurchase price” of any Disqualified
Equity Interests that do not have a fixed redemption or repurchase price shall be calculated in
accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity
Interests were redeemed or repurchased on any date on which an amount of Indebtedness outstanding
shall be required to be determined pursuant to this Indenture.




          “Indenture” means this Indenture as amended, restated or supplemented from time to
time.




          “Independent Director” means a director of the Issuer who





     (1) is independent with respect to the transaction at issue;




13









 









     (2) does not have any material financial interest in the Issuer or any of its
Affiliates (other than as a result of holding securities of the Issuer); and




     (3) has not and whose Affiliates or affiliated firm has not, at any time during the
twelve months prior to the taking of any action hereunder, directly or indirectly, received,
or entered into any understanding or agreement to receive, any compensation, payment or
other benefit, of any type or form, from the Issuer or any of its Affiliates, other than
customary directors’ fees for serving on the Board of Directors of the Issuer or any
Affiliate and reimbursement of out-of-pocket expenses for attendance at the Issuer’s or
Affiliate’s board and board committee meetings.



          “Independent Financial Advisor” means an accounting, appraisal or investment banking
firm of nationally recognized standing that is, in the reasonable judgment of the Issuer’s Board of
Directors, qualified to perform the task for which it has been engaged and disinterested and
independent with respect to the Issuer and its Affiliates.




          “Initial Notes” has the meaning provided in the preamble to this Indenture.




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




          “Intellectual Property” means all patents, patent applications, trademarks, trade
names, service marks, copyrights, technology, trade secrets, proprietary information, domain names,
know how and processes necessary for the conduct of the Issuer’s or any Restricted Subsidiary’s
business as currently conducted.




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




          “Investments
” of any Person means:





     (1) all direct or indirect investments by such Person in any other Person in the form
of loans, advances or capital contributions or other credit extensions constituting
Indebtedness of such other Person, and any guarantee of Indebtedness of any other Person;




     (2) all purchases (or other acquisitions for consideration) by such Person of
Indebtedness, Equity Interests or other securities of any other Person (other than any such
purchase that constitutes a Restricted Payment of the type described in clause (2) of the
definition thereof);




     (3) all other items that would be classified as investments on a balance sheet of such
Person prepared in accordance with GAAP (including, if required by GAAP, purchases of assets
outside the ordinary course of business); and




     (4) the Designation of any Subsidiary as an Unrestricted Subsidiary.



          Except as otherwise expressly specified in this definition, the amount of any Investment
(other than an Investment made in cash) shall be the Fair Market Value thereof on the date such
Investment is made. The amount of Investment pursuant to clause (4) shall be the Designation
Amount determined in accordance with Section 4.19. If the Issuer or any Restricted Subsidiary
sells or otherwise



14









 






disposes of any Equity Interests of any Restricted Subsidiary, or any Restricted Subsidiary
issues any Equity Interests, in either case, such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary, the Issuer shall be deemed to have made an
Investment on the date of any such sale or other disposition equal to the Fair Market Value of the
Equity Interests of and all other Investments in such Restricted Subsidiary retained.
Notwithstanding the foregoing, purchases or redemptions of Equity Interests of the Issuer shall be
deemed not to be Investments.




          “Issue Date” means the date on which the Initial Notes are originally issued.




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




          “Lien” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or
other), pledge, lease, easement, restriction, covenant, charge, security interest or other
encumbrance of any kind or nature 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.




          “Liquidated Damages” has the meaning set forth in the Registration Rights Agreement.




          “Maturity Date” means August 1, 2014.




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




          “Net Available Proceeds” means, with respect to any Asset Sale or Collateral
Disposition, the proceeds thereof in the form of cash or Cash Equivalents received by the Issuer or
any of its Restricted Subsidiaries from such Asset Sale, net of





     (1) brokerage commissions and other fees and expenses (including fees, discounts and
expenses of legal counsel, accountants and investment banks, consultants and placement
agents) of such Asset Sale or Collateral Disposition;




     (2) provisions for taxes payable as a result of such Asset Sale or Collateral
Disposition (after taking into account any available tax credits or deductions and any tax
sharing arrangements);




     (3) amounts required to be paid to any Person (other than the Issuer or any Restricted
Subsidiary and other than under a Credit Facility) owning a beneficial interest in the
assets subject to the Asset Sale or Collateral Disposition or having a Lien thereon;




     (4) payments of unassumed liabilities (not constituting Indebtedness) relating to the
assets sold at the time of, or within 30 days after the date of, such Asset Sale or
Collateral Disposition; and




     (5) appropriate amounts to be provided by the Issuer or any Restricted Subsidiary, as
the case may be, as a reserve required in accordance with GAAP against any adjustment in the
sale price of such asset or assets or liabilities associated with such Asset Sale or
Collateral Disposition and retained by the Issuer or any Restricted Subsidiary, as the case
may be, after such Asset Sale or Collateral Disposition, including pensions and other
postemployment benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations



15









 






associated with such Asset Sale or Collateral Disposition, all as reflected in an
Officers’ Certificate delivered to the Trustee; provided, however, that any amounts
remaining after adjustments, revaluations or liquidations of such reserves shall constitute
Net Available Proceeds.




     “Net Proceeds Offer” has the meaning given to this term in Section 4.12(g)(1).




     “Non-Recourse Debt” means Indebtedness of an Unrestricted Subsidiary:




     (1) as to which neither the Issuer nor any Restricted Subsidiary (a) provides credit
support of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise,
or (c) constitutes the lender; and




     (2) no default with respect to which (including any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary) would permit upon
notice, lapse of time or both any holder of any other Indebtedness (other than the Credit
Agreement or Notes) of the Issuer or any Restricted Subsidiary to declare a default on the
other Indebtedness or cause the payment thereof to be accelerated or payable prior to its
stated maturity.



          “Note Guarantee” means the guarantee by each Guarantor of the obligations of the
Issuer with respect to the Notes.




          “Note Obligations” means the Notes, the Note Guarantees and all other obligations
under this Indenture of any Obligor under this Indenture or the Security Documents.




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




          “Obligation” means any principal, interest, penalties, fees, indemnification, reimbursements,
costs, expenses, damages and other liabilities payable under the documentation governing any
Indebtedness.




          “Obligor” means each of the Issuer, the Guarantors and any other Person that has
granted to the Trustee a Lien upon any of the Collateral as security for the Note Obligations.




          “Offer Payment Date” means any date on which a Net Proceeds Offer or Collateral
Proceeds Offer is consummated.




          “Offering” means the offering of $225 million aggregate principal amount of Initial
Notes by the Issuer pursuant to the Offering Circular.




          “Offering Circular” means the Final Offering Circular dated July 23, 2009 relating to
the offering of $225 million of Notes.




          “Officer” means any of the following of the Issuer: the Chairman of the Board of Directors,
the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary.




          “Officers’ Certificate” means a certificate signed by two Officers.




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          “OID” means the original issue discount of the Notes for federal income tax purposes.




          “Opinion of Counsel” means a written opinion from legal counsel who and which is
acceptable to the Trustee complying with the requirements of this Indenture.




          “Outstanding Senior Notes” means the Issuer’s outstanding 7.125% Senior Notes due
2016.




          “Pari Passu Indebtedness” means any Indebtedness of the Issuer or any Guarantor that
ranks pari passu in right of payment with the Notes or the Note Guarantees, as applicable.




          “Permitted Business” means the businesses engaged in by the Issuer and its
Subsidiaries on the Issue Date as described in the Offering Circular and businesses that are
reasonably related thereto or reasonable extensions thereof.




          “Permitted Collateral Liens” means Liens described in clauses (1), (2), (3), (5), (6)
and (12) of the definition of “Permitted Liens.”




          “Permitted Holder” means Credit Suisse, a Swiss Bank, Credit Suisse Group, Credit
Suisse Holdings (USA), Inc., Credit Suisse (USA), Inc. and their respective Affiliates.




          “Permitted Investment” means:





     (1) (i) Investments by the Issuer or any Subsidiary Guarantor in (a) any Subsidiary
Guarantor or (b) any Person that will become immediately after such Investment a Subsidiary
Guarantor or that will merge or consolidate into the Issuer or any Subsidiary Guarantor and
(ii) Investments by any Restricted Subsidiary that is not a Subsidiary Guarantor in any
other Restricted Subsidiary;




     (2) Investments in the Issuer by any Restricted Subsidiary;




     (3) loans and advances to directors, employees and officers of the Issuer and the
Restricted Subsidiaries (i) in the ordinary course of business (including payroll, travel
and entertainment related advances) (other than any loans or advances to any director or
executive officer (or equivalent thereof) that would be in violation of Section 402 of the
Sarbanes Oxley Act) and (ii) to purchase Equity Interests of the Issuer not in excess of
$2.5 million at any one time outstanding;




     (4) Hedging Obligations entered into for bona fide hedging purposes of the Issuer or
any Restricted Subsidiary not for the purpose of speculation;




     (5) Investments in cash and Cash Equivalents;




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



17









 






     (7) Investments in securities of trade creditors or customers received pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers;




     (8) Investments made by the Issuer or any Restricted Subsidiary as a result of
consideration received in connection with an Asset Sale or Collateral Disposition made in
compliance with Section 4.12;




     (9) lease, utility and other similar deposits in the ordinary course of business;




     (10) Investments made by the Issuer or a Restricted Subsidiary for consideration
consisting only of Qualified Equity Interests of the Issuer or any of its Subsidiaries;




     (11) stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Issuer or any Restricted Subsidiary or in
satisfaction of judgments;




     (12) Permitted Joint Venture Investments made by the Issuer or any of its Restricted
Subsidiaries, in an aggregate amount (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (12) after the Issue Date, that does not exceed
$20.0 million;




     (13) Investments existing on the Issue Date;




     (14) repurchases of, or other Investments in, the Notes;




     (15) advances, deposits and prepayments for purchases of any assets, including any
Equity Interests; and




     (16) other Investments in any Person having an aggregate Fair Market Value (measured on
the date each such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this clause (16)
since the Issue Date, not to exceed the greater of (a) $25.0 million or (b) 5.0% of the
Issuer’s Consolidated Tangible Assets.



          In determining whether any Investment is a Permitted Investment, the Issuer may allocate or
reallocate all or any portion of an Investment among the clauses of this definition and any of the
provisions of Section 4.11.




          “Permitted Joint Venture Investment” means, with respect to an Investment by any
specified Person, an Investment by such specified Person in any other Person engaged in a Permitted
Business (a) over which the specified Person is responsible (either directly or through a services
agreement) for day-to-day operations or otherwise has operational and managerial control of such
other Person, or veto power over significant management decisions affecting such other Person and
(b) of which at least 30% of the outstanding Equity Interests of such other Person is at the time
owned directly or indirectly by the specified Person.




18









 









     “Permitted Liens” means the following types of Liens:




     (1) inchoate Liens for taxes, assessments or governmental charges or levies which (a)
are not yet due and payable or delinquent or (b) are being contested in good faith by
appropriate proceedings and as to which the Issuer or the Restricted Subsidiaries shall have
set aside on their books such reserves as may be required pursuant to GAAP;




     (2) Liens in respect of property of the Issuer or any Restricted Subsidiary imposed by
law, which were not incurred or created to secure Indebtedness for borrowed money, such as
carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’, repairmen’s and
mechanics’ Liens and other similar Liens arising in the ordinary course of business, and
which do not in the aggregate materially detract from the value of the property of the
Issuer or its Restricted Subsidiaries, taken as a whole, and do not materially impair the
use thereof in the operation of the business of the Issuer and its Restricted Subsidiaries,
taken as a whole;




     (3) Liens (i) imposed by law or deposits made in connection therewith in the ordinary
course of business in connection with workers’ compensation, unemployment insurance and
other types of social security, (ii) incurred in the ordinary course of business to secure
the performance of tenders, statutory obligations (other than excise taxes), surety, stay,
customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money) or (iii) arising by virtue of deposits made
in the ordinary course of business to secure liability for premiums to insurance carriers;




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




     (5) Liens arising out of judgments or awards not resulting in a Default or an Event of
Default;




     (6) easements, rights of way, restrictions (including zoning restrictions), covenants,
encroachments, protrusions and other similar charges or encumbrances, and minor title
deficiencies on or with respect to any Real Property, in each case whether now or hereafter
in existence, not (i) securing Indebtedness, (ii) individually or in the aggregate
materially impairing the value or marketability of such Real Property and (iii) individually
or in the aggregate materially interfering with the conduct of the business of the Issuer
and its Restricted Subsidiaries at such Real Property;




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




     (8) Liens encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual or warranty requirements of the Issuer or any Restricted Subsidiary,
including rights of offset and setoff;



19









 






     (9) bankers’ Liens, rights of setoff and other similar Liens existing solely with
respect to cash and Cash Equivalents on deposit in one or more of accounts maintained by the
Issuer or any Restricted Subsidiary, in each case granted in the ordinary course of business
in favor of the bank or banks with which such accounts are maintained, securing amounts
owing to such bank with respect to cash management and operating account arrangements,
including those involving pooled accounts and netting arrangements;




     (10) Leases with respect to the assets or properties of the Issuer and any Restricted
Subsidiary, in each case entered into in the ordinary course of the Issuer’s or such
Restricted Subsidiary’s business so long as such Leases do not, individually or in the
aggregate, (i) interfere in any material respect with the ordinary conduct of the business
of the Issuer or any Restricted Subsidiary or (ii) materially impair the use (for its
intended purposes) or the value of the property subject thereto;




     (11) the filing of financing statements solely as a precautionary measure in connection
with operating leases or consignment of goods;




     (12) Liens securing all of the Notes and Liens securing any Note Guarantee;




     (13) Liens securing Hedging Obligations entered into for bona fide hedging purposes of
the Issuer or any Restricted Subsidiary not for the purpose of speculation;




     (14) Liens existing on the Issue Date securing Indebtedness outstanding on the Issue
Date; provided that (i) the aggregate principal amount of the Indebtedness, if any, secured
by such Liens does not increase; and (ii) such Liens do not encumber any property other than
the property subject thereto on the Issue Date;




     (15) Liens in favor of the Issuer or a Guarantor;




     (16) Liens securing Indebtedness incurred under the Credit Facilities or with respect
to other obligations that do not exceed in the aggregate the greater of (a) $15.0 million or
(b) 3.0% of the Issuer’s Consolidated Tangible Assets at any time outstanding;




     (17) Liens arising pursuant to Purchase Money Indebtedness incurred pursuant to
sub-clause (7) of clause (b) of Section 4.10; provided that (i) the Indebtedness secured by
any such Lien (including refinancings thereof) does not exceed 100% of the cost of the
property being acquired or leased at the time of the incurrence of such Indebtedness and
(ii) any such Liens attach only to the property being financed pursuant to such Purchase
Money Indebtedness and do not encumber any other property of the Issuer or any Restricted
Subsidiary;




     (18) Liens securing Acquired Indebtedness permitted to be incurred under this
Indenture; provided that the Liens do not extend to assets not subject to such Lien at the
time of acquisition (other than improvements thereon) and are no more favorable to the
lienholders than those securing such Acquired Indebtedness prior to the incurrence of such
Acquired Indebtedness by the Issuer or a Restricted Subsidiary;




     (19) Liens on property of a Person existing at the time such Person is acquired or
merged with or into or consolidated with the Issuer or any Restricted Subsidiary (and not
created in anticipation or contemplation thereof); provided that such Liens do not extend to
property not



20









 




subject to such Liens at the time of acquisition (other than improvements thereon) and
are no more favorable to the lienholders than the existing Lien;





     (20) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred
to in the foregoing clauses (12), (14), (16), (17), (18) and (19); provided that in the case
of Liens securing Refinancing Indebtedness of Indebtedness secured by Liens referred to in
the foregoing clauses (14), (17), (18) and (19), such Liens do not extend to any additional
assets (other than improvements thereon and replacements thereof);




     (21) licenses of Intellectual Property granted by the Issuer or any Restricted
Subsidiary in the ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of the Issuer or such Restricted Subsidiary;




     (22) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by Issuer or any Restricted Subsidiary in
the ordinary course of business in accordance with the past practices of the Issuer or such
Restricted Subsidiary;




     (23) Liens on assets of any Foreign Restricted Subsidiary to secure Indebtedness of
such Foreign Restricted Subsidiary which Indebtedness is permitted by this Indenture;




     (24) Liens of franchisors arising in the ordinary course of business not securing
Indebtedness; and




     (25) Liens in favor of the Trustee as provided for in this Indenture on money or
property held or collected by the Trustee in its capacity as Trustee.



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




          “Plan of Liquidation” with respect to any Person, means a plan that provides for,
contemplates or the effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of such Person otherwise than as an entirety
or substantially as an entirety; and (2) the distribution of all or substantially all of the
proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the
remaining assets of such Person to holders of Equity Interests of such Person.




          “Preferred Stock” means, with respect to any Person, any and all preferred or
preference stock or other equity interests (however designated) of such Person whether now
outstanding or issued after the Issue Date.




          “principal” means, with respect to the Notes, the principal of, and (unless the context
otherwise requires) the premium, if any, on the Notes.




          “Purchase Money Indebtedness” means Indebtedness, including Capitalized Lease
Obligations, of the Issuer or any Restricted Subsidiary incurred for the purpose of financing all
or any part of the purchase price of property, plant or equipment used in the business of the
Issuer or any Restricted



21









 






Subsidiary or the cost of installation, construction or improvement thereof; provided,
however, that (except in the case of Capitalized Lease Obligations) (1) the amount of such
Indebtedness shall not exceed such purchase price or cost and (2) such Indebtedness shall be
incurred within 90 days after such acquisition of such asset by the Issuer or such Restricted
Subsidiary or such installation, construction or improvement.




          “Qualified Equity Interests” of any Person means Equity Interests of such Person other
than Disqualified Equity Interests; provided that such Equity Interests shall not be deemed
Qualified Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed,
directly or indirectly, using funds (1) borrowed from such Person or any Subsidiary of such Person
until and to the extent such borrowing is repaid or (2) contributed, extended, guaranteed or
advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect
of any employee stock ownership or benefit plan). Unless otherwise specified, Qualified Equity
Interests refer to Qualified Equity Interests of the Issuer.




          “Qualified Equity Offering” means the issuance and sale of Qualified Equity Interests
of the Issuer to Persons other than (x) any Permitted Holder or (y) any other Person who is, prior
to such issuance and sale, an Affiliate of the Issuer; provided, however, that cash proceeds
therefrom equal to not less than the Redemption Price of the Notes to be redeemed are received by
the Issuer as a capital contribution immediately prior to such redemption.




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




          “Real Property” means, collectively, all right, title and interest (including any
leasehold estate) in and to any and all parcels of or interests in real property owned, leased or
operated by any Person, whether by lease, license or other means, together with, in each case, all
easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant
fixtures and equipment, all general intangibles and contract rights and other property and rights
incidental to the ownership, lease or operation thereof.




          “Record Date” for interest payable on any Interest Payment Date (except a date for
payment of default interest) means the January 15 and July 15 (whether or not a Business Day) as
the case may be, immediately preceding such Interest Payment Date.




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




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




          “Redesignation” has the meaning given to such term in Section 4.19.




          Unless
the context otherwise requires, “refinance” means to refinance, repay, prepay, replace,
renew or refund.




          “Refinancing Indebtedness” means Indebtedness of the Issuer or a Restricted Subsidiary
incurred in exchange for, or the proceeds of which are used to redeem, refinance, replace, defease,




22









 






discharge, refund or otherwise retire for value, in whole or in part, any Indebtedness of the
Issuer or any Restricted Subsidiary (the “Refinanced Indebtedness”); provided that:





     (1) the principal amount (and accreted value, in the case of Indebtedness issued at a
discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted
value, as the case may be) of the Refinanced Indebtedness plus the amount of accrued and
unpaid interest on the Refinanced Indebtedness, any reasonable premium paid to the holders
of the Refinanced Indebtedness and reasonable expenses incurred in connection with the
incurrence of the Refinancing Indebtedness;




     (2) the obligor of Refinancing Indebtedness does not include any Person (other than the
Issuer or any Guarantor) that is not an obligor of the Refinanced Indebtedness;




     (3) if the Refinanced Indebtedness was subordinated in right of payment to the Notes or
the Note Guarantees, as the case may be, then such Refinancing Indebtedness, by its terms,
is subordinate in right of payment to the Notes or the Note Guarantees, as the case may be,
at least to the same extent as the Refinanced Indebtedness;




     (4) the Refinancing Indebtedness has a final stated maturity either (a) no earlier than
the Refinanced Indebtedness being repaid or amended or (b) after the Maturity Date;




     (5) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on
or prior to the Maturity Date has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average
Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is
scheduled to mature on or prior to the Maturity Date; and




     (6) the proceeds of the Refinancing Indebtedness shall be used substantially
concurrently with the incurrence thereof to redeem, refinance, replace, defease, discharge,
refund or otherwise retire for value the Refinanced Indebtedness, unless the Refinanced
Indebtedness is not then due and is not redeemable or prepayable at the option of the
obligor thereof or is redeemable or prepayable only with notice, in which case such proceeds
shall be held in a segregated account of the obligor of the Refinanced Indebtedness until
the Refinanced Indebtedness becomes due or redeemable or prepayable or such notice period
lapses and then shall be used to refinance the Refinanced Indebtedness; provided that in any
event the Refinanced Indebtedness shall be redeemed, refinanced, replaced, defeased,
discharged, refunded or otherwise retired for value within one year of the incurrence of the
Refinancing Indebtedness.



          “Registration Rights Agreement” means (i) the Registration Rights Agreement dated as
of the Issue Date among the Issuer, the Guarantors and the initial purchasers of the Notes issued
on the Issue Date and (ii) any other registration rights agreement entered into in connection with
an issuance of Additional Notes in a private offering after the Issue Date.




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




          “Restricted Payment” means any of the following:





     (1) the declaration or payment of any dividend or any other distribution on Equity
Interests of the Issuer or any Restricted Subsidiary or any payment made to the direct or
indirect



23









 




holders (in their capacities as such) of Equity Interests of the Issuer or any
Restricted Subsidiary, including, without limitation, any payment in connection with any
merger or consolidation involving the Issuer but excluding (a) dividends or distributions
payable solely in Qualified Equity Interests or through accretion or accumulation of such
dividends on such Equity Interests and (b) in the case of Restricted Subsidiaries, dividends
or distributions payable to the Issuer or to a Restricted Subsidiary and pro rata dividends
or distributions payable to minority stockholders of any Restricted Subsidiary;





     (2) the purchase, redemption, defeasance or other acquisition or retirement for value
of any Equity Interests of the Issuer or any Restricted Subsidiary (including, without
limitation, any payment in connection with any merger or consolidation involving the Issuer)
but excluding any such Equity Interests held by the Issuer or any Restricted Subsidiary;




     (3) any Investment other than a Permitted Investment; or




     (4) any principal payment on, purchase, redemption, defeasance, prepayment, decrease or
other acquisition or retirement for value prior to any scheduled maturity or prior to any
scheduled repayment of principal or sinking fund payment, as the case may be, in respect of
Subordinated Indebtedness (other than any Subordinated Indebtedness owed to and held by the
Issuer or any Restricted Subsidiary).



          “Restricted Payments Basket” has the meaning given to such term in clause (a) of
Section 4.11.




          “Restricted Security” has the meaning set forth in Rule 144(a)(3) promulgated under
the Securities Act; provided that the Trustee shall be entitled to request and conclusively rely
upon an Opinion of Counsel with respect to whether any Note is a Restricted Security.




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




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




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




          “Secretary’s Certificate” means a certificate signed by the Secretary of the Issuer.




          “Securities Act” means the U.S. Securities Act of 1933, as amended.




          “Security Documents” means the Security Agreement as entered into between the Issuer
and the Trustee on the Issue Date, together with any other security agreements, pledge agreements,
collat-eral assignments, deeds of covenants, assignments of earnings and insurances, collateral
agency agree-ments, deeds of trust, supplement to existing Security Document or other grants or
transfers for security executed and delivered by the Issuer and any other Obligor creating, or
purporting to create, a Lien upon Collateral in favor of the Trustee for the benefit of the holders
of the Notes, subject to certain payment priorities, in each case as amended, modified,
supplemented, renewed, restated or replaced, in whole or part, from time to time, in accordance
with its terms.





24












 





          “Significant Subsidiary” means (1) any Restricted Subsidiary that would be a
“significant subsidiary” as defined in Regulation S-X promulgated pursuant to the Securities Act as
such Regulation is in effect on the Issue Date and (2) any Restricted Subsidiary that, when
aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries
and as to which any event described in clause (7) of Section 6.01 has occurred and is continuing,
or which are being released from their Note Guarantees (in the case of clause (9) of the provisions
described in Section 8.02), would constitute a Significant Subsidiary under clause (1) of this
definition.




          “Subordinated Indebtedness” means (a) Indebtedness of the Issuer or any Restricted
Subsidiary that is expressly subordinated in right of payment to the Notes or the Note Guarantees,
respectively and (b), for purposes of Section 4.11 hereof, the Outstanding Senior Notes and any
Refinancing Indebtedness issued with respect to the Outstanding Senior Notes.




          “Subsidiary” means, with respect to any Person:





     (1) any corporation, limited liability company, association or other business entity of
which more than 50% of the total voting power of the Equity Interests entitled (without
regard to the occurrence of any contingency) to vote in the election of the Board of
Directors thereof is at the time owned or controlled, directly or indirectly, by such Person
or one or more of the other Subsidiaries of such Person (or a combination thereof); and




     (2) any partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general partners of
which are such Person or of one or more Subsidiaries of such Person (or any combination
thereof).



          Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Issuer.




          “Subsidiary Guarantor” means any Guarantor that is a Subsidiary.




          “Treasury Rate” means, as of any redemption date, the weekly average yield to maturity
at the time of computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has
become publicly available at least two Business Days prior to the redemption date (or, if such
Statistical Release is no longer published, any publicly available source or similar market data))
equal to the period from the redemption date to February 1, 2012; provided, however, that if the
period from the redemption date to February 1, 2012 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the Treasury Rate shall
be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) between the
weekly average yields of the United States Treasury securities that have a constant maturity
closest to and greater than the period from the redemption date to February 1, 2012 and the United
States Treasury securities that have a constant maturity closest to and less than the period from
the redemption date to February 1, 2012 for which such yields are given, except that if the period
from the redemption date to February 1, 2012 is less than one year, the weekly average yield on
actually traded United States Treasury securities adjusted to a constant maturity of one year shall
be used.



          “Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as
amended. Individual sections of the Trust Indenture Act are sometimes referred to herein as “TIA
Section.”



          “Trust Officer” means, when used with respect to the Trustee, any officer of the
Trustee within the Worldwide Securities Services Conventional Debt Unit (or any successor unit,
department or



25









 




division of the Trustee) located at the Corporate Trust Office of the Trustee who has direct
responsibility for the administration of this Indenture and, for the purposes of Sections
7.01(c)(2) and 7.05, also means, with respect to a particular corporate trust matter, any other
officer, trust officer or person performing similar functions to whom such matter is referred
because of his or her knowledge of and familiarity of the particular subject.




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



          “Unrestricted Subsidiary” means (1) any Subsidiary that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors of the Issuer in
accordance with Section 4.19 and (2) any Subsidiary of an Unrestricted Subsidiary.



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



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



          “Weighted Average Life to Maturity” when applied to any Indebtedness at any date,
means the number of years obtained by dividing (1) the sum of the products obtained by multiplying
(a) the amount of each then remaining installment, sinking fund, serial maturity or other required
payment of principal, including payment at final maturity, in respect thereof by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between such date and the making of
such payment by (2) the then outstanding principal amount of such Indebtedness.


Section 1.02. Incorporation by Reference of Trust Indenture Act.




          Whenever this Indenture refers to a provision of the TIA, the portion of such provision
required to be incorporated herein in order for this Indenture to be qualified under the TIA is
incorporated by reference in and made a part of this Indenture. The following TIA terms used in
this Indenture have the following meanings:



          “indenture securities” means the Notes.




          “indenture securityholder” 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 Issuer, the Guarantors or any other
obligor on the Notes.



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



26









 




Section 1.03. Rules of Construction.




          Unless the context otherwise requires:





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




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



          (c) “or” is not exclusive;




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




          (e) words used herein implying any gender shall apply to every gender;





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




     (g) whenever in this Indenture there is mentioned, in any context, the payment of
principal, premium, if any, interest or any other amount payable under or with respect to
any Note, such mention shall be deemed to include mention of the payment of Liquidated
Damages to the extent that, in such context, Liquidated Damages are, were or would be
payable in respect thereof.



ARTICLE 2




THE NOTES




Section 2.01. Form and Dating.




          The Initial Notes and the Trustee’s certificate of authentication shall be substantially in
the form of Exhibit A hereto. The Exchange Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit B hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or Depository rule or
usage. The form of the Notes and any notation, legend or endorsement on them shall be satisfactory
to both the Issuer and the Trustee. Each Note shall be dated the date of its issuance and shall
show the date of its authentication.



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



          The Notes shall be issued initially in the form of two or more permanent global Notes (the
“Global Notes”). Notes offered and sold (i) in reliance on Rule 144A shall be issued
initially in the form of one or more permanent Global Notes in registered form, substantially in
the form set forth in Exhibit A (the “Rule 144A Global Note”) and (ii) in offshore
transactions in reliance on Regulation S shall be issued initially in the form of one or more
permanent global Notes in registered form, substantially in the form set forth in Exhibit A
(the “Regulation S Global Note”), and in each case shall be deposited with



27









 





the Trustee, as custodian for the Depository, duly executed by the Issuer and authenticated by
the Trustee as hereinafter provided. Notes transferred to Institutional Accredited Investors may
be represented by a permanent Global Note in registered form, substantially in the form set forth
in Exhibit A, and if so represented shall be deposited with the Trustee, as custodian for
the Depository, duly executed by the Issuer and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of any Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided.




Section 2.02. Execution and Authentication.




          The Notes shall be executed on behalf of the Issuer by two Officers of the Issuer. Such
signatures may be either manual or facsimile.




          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 signs the certificate
of authentication on the Note. Such signature shall be manual. Such signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.




          The Trustee or an authentication agent (the “Authenticating Agent”) shall authenticate
(i) Initial Notes for original issue on the date of this Indenture in the aggregate principal
amount not to exceed $225,000,000, (ii) additional Notes (“Additional Notes”) for original
issue following the date of this Indenture in an aggregate principal amount (net of OID at
issuance) not to exceed $12,102,750 (so long as permitted by the terms of this Indenture,
including, without limitation, Section 4.10 hereof) upon a written order of the Issuer executed by
an Officer, and (iii) Exchange Notes from time to time for issue only in exchange for a like
principal amount of Initial Notes or Additional Notes, as the case may be, in each case upon
written orders of the Issuer in the form of an Officer’s Certificate. The written order shall
specify the amount of Notes to be authenticated, the date on which the Notes are to be
authenticated and the aggregate principal amount of Notes outstanding on the date of
authentication, whether the Notes are to be Initial Notes, Additional Notes or Exchange Notes, and
shall further specify the amount of such Notes to be issued as a Global Note or Certificated Notes.
The aggregate principal amount of Notes outstanding at any time may not exceed $225,000,000 (net
of OID at issuance) except as provided in Section 2.07 hereof.




          Notwithstanding the foregoing, all Notes issued under this Indenture shall vote and consent
together on all matters (as to which any of such Notes may vote or consent) as one class and no
series of Notes will have the right to vote or consent as a separate class on any matter.




          The Trustee may appoint an Authenticating Agent to authenticate Notes. Any such appointment
shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished
to the Issuer. An Authenticating Agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes authentication by such
Authenticating Agent. An Authenticating Agent has the same right as an Agent to deal with the
Issuer and Affiliates of the Issuer.




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




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Section 2.03. Registrar and Paying Agent.




          The Issuer shall maintain an office or agency in The City of New York where Notes may be
presented for registration of transfer or for exchange (“Registrar”), where Notes may be
presented for payment (“Paying Agent”) and where notices and demands to or upon the Issuer
in respect of the Notes and this Indenture may be served. The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Registrar shall provide the Issuer a current
copy of such register from time to time upon request of the Issuer. The Issuer may have one or
more co-Registrars and one or more additional Paying Agents. Neither the Issuer nor any Affiliate
of the Issuer may act as Paying Agent. The Issuer may change any Paying Agent, Registrar or
co-Registrar without notice to any Holder.




          The Issuer shall enter into an appropriate agency agreement with any Agent not a party to this
Indenture. The agreement shall implement the provisions of this Indenture that relate to such
Agent. The Issuer shall notify the Trustee of the name and address of any such Agent. If the
Issuer fails to maintain a Registrar or Paying Agent, or agent for service of notices and demands,
or fails to give the foregoing notice, the Trustee shall act as such. The Issuer initially
appoints the Trustee as Registrar, Paying Agent and agent for service of notices and demands in
connection with the Notes.




Section 2.04. Paying Agent to Hold Assets in Trust.




          The Issuer shall require each Paying Agent other than the Trustee to agree in writing that
each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all assets held
by the Paying Agent for the payment of principal of, premium, if any, or interest on Notes (whether
such assets have been distributed to it by the Issuer or any other obligor on the Notes), and shall
notify the Trustee in writing of any Default in making any such payment. The Issuer at any time
may require a Paying Agent to distribute all assets held by it to the Trustee and account for any
assets disbursed and the Trustee may at any time during the continuance of any Default in any
payment due on the Notes, upon written request to a Paying Agent, require such Paying Agent to
forthwith distribute to the Trustee all assets so held in trust by such Paying Agent together with
a complete accounting of such sums. Upon distribution to the Trustee of all assets that shall have
been delivered by the Issuer to the Paying Agent, the Paying Agent shall have no further liability
for such assets.




Section 2.05. Noteholder Lists.




          The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders. If the Trustee is not the Registrar,
the Issuer shall furnish or cause the Registrar to furnish to the Trustee on or before each January
15 and July 15 in each year, and at such other times as the Trustee may request in writing, a list
in such form and as of such date as the Trustee may reasonably require of the names and addresses
of Holders which list may be conclusively relied on by the Trustee.




Section 2.06. Transfer and Exchange.




          Subject to the provisions of Sections 2.15 and 2.16 hereof, when Notes are presented to the
Registrar or a co-Registrar with a request to register the transfer of such Notes or to exchange
such Notes for an equal principal amount of Notes of other authorized denominations of the same
series, the Registrar or co-Registrar shall register the transfer or make the exchange as requested
if its requirements for such transaction are met; provided, however, that the Notes presented or
surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form



29









 







satisfactory to the Issuer and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of transfer and
exchanges, the Issuer shall execute and the Trustee shall authenticate Notes at the Registrar’s or
co-Registrar’s request. No service charge shall be made for any registration of transfer or
exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge in connection therewith payable by the transferor of such Notes (other
than any such transfer taxes or similar governmental charge payable upon exchanges or transfers
pursuant to Section 2.10, 3.06, 4.12, 4.15 or 8.05 hereof, in which event the Issuer shall be
responsible for the payment of such taxes).




          Without the prior consent of the Issuer, the Registrar or co-Registrar shall not be required
to register the transfer of or exchange of any Note (i) during a period of 15 days before a
selection of Notes to be redeemed, (ii) selected for redemption in whole or in part pursuant to
Article 3 hereof, except the unredeemed portion of any Note being redeemed in part, or (iii)
between a Record Date and the next succeeding Interest Payment Date.




          Any Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of
beneficial interests in such Global Notes may be effected only through a book entry system
maintained by the Depository, and that ownership of a beneficial interest in the Note shall be
required to be reflected in a book entry.




Section 2.07. Replacement Notes.




          If a mutilated Note is surrendered to the Trustee or if the Holder presents evidence to the
satisfaction of the Issuer and the Trustee that the Note has been lost, destroyed or wrongfully
taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note. An indemnity
or a security bond may be required by the Issuer or the Trustee that is sufficient in the judgment
of the Issuer and the Trustee to protect the Issuer, the Trustee or any Agent from any loss which
any of them may suffer if a Note is replaced. In every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and to the Trustee evidence to their satisfaction of the
destruction, loss or the theft of such Note and the ownership thereof. Each of the Issuer and the
Trustee may charge for its expenses in replacing a Note. In the event any such mutilated, lost,
destroyed or wrongfully taken Note has become due and payable, the Issuer in its discretion may pay
such Note instead of issuing a new Note in replacement thereof. The provisions of this Section
2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with
respect to replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.




          Every replacement Note is an additional obligation of the Issuer.




Section 2.08. Outstanding Notes.




          Notes outstanding at any time are all Notes authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in this Section 2.08
as not outstanding.




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




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          If by 10:00 a.m., New York City time, on a Redemption Date or the Maturity Date, the Paying
Agent holds U.S. legal tender sufficient to pay all of the principal and interest due on the Notes
payable on that date, then on and after that date such Notes cease to be outstanding and interest
on them ceases to accrue.




Section 2.09. Treasury Notes.




          In determining whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver, consent or notice, Notes owned by the Issuer or any of its Affiliates shall
be considered as though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be so considered. The
Issuer shall notify the Trustee, in writing, when it or any of its Affiliates repurchases or
otherwise acquires Notes, of the aggregate principal amount of such Notes so repurchased or
otherwise acquired.




Section 2.10. Temporary Notes.




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




Section 2.11. Cancellation.




          The Issuer 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, or at the direction of the Trustee, the Registrar or
the Paying Agent, and no one else, shall cancel and, at the written direction of the Issuer,
dispose of and deliver evidence of such disposal of all Notes surrendered for registration of
transfer, exchange, payment or cancellation in accordance with their then existing procedures
therefor. Subject to Section 2.07 hereof, the Issuer may not issue new Notes to replace Notes that
it has paid or delivered to the Trustee for cancellation. If the Issuer shall acquire any of the
Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11. In no event shall the Trustee be required to destroy cancelled
Notes.




Section 2.12. Defaulted Interest.




          The Issuer shall pay interest on overdue principal (including post-petition interest in a
proceeding under Bankruptcy Law) at the rate of interest then borne by the Notes. The Issuer
shall, to the extent lawful, pay interest on overdue installments of interest (without regard to
any applicable grace periods) at the rate of interest then borne by the Notes.




          If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted
interest, plus (to the extent lawful) any interest payable on the defaulted interest to the Persons
who are



31









 






Holders on a subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Issuer for the payment of defaulted interest or the next succeeding
Business Day if such date is not a Business Day. At least 15 days before the subsequent special
record date, the Issuer shall mail to each Holder, as of a recent date selected by the Issuer, with
a copy to the Trustee, a notice that states the subsequent special record date, the payment date
and the amount of defaulted interest, and interest payable on such defaulted interest, if any, to
be paid.




          Notwithstanding the foregoing, any interest which is paid prior to the expiration of the
30-day period set forth in Section 6.01(a) hereof shall be paid to Holders as of the Record Date
for the Interest Payment Date for which interest has not been paid.




Section 2.13. Deposit of Moneys.




          No later than 10:00 a.m., New York City time, on each Interest Payment Date, Redemption Date,
Change of Control Payment Date, Offer Payment Date and Maturity Date, the Issuer shall have
deposited with the Paying Agent in immediately available funds U.S. legal tender sufficient to make
payments, if any, due on such Interest Payment Date, Redemption Date, Change of Control Payment
Date, Offer Payment Date or Maturity Date, as the case may be, in a timely manner which permits the
Trustee to remit payment to the Holders on such Interest Payment Date, Redemption Date, Change of
Control Payment Date, Offer Payment Date or Maturity Date, as the case may be. The principal and
interest on Global Notes shall be payable to the Depository or its nominee, as the case may be, as
the sole registered owner and the sole Holder of the Global Notes represented thereby. The
principal and interest on Notes in certificated form shall be payable in the manner indicated in
paragraph 2 of the Notes.




Section 2.14. CUSIP Number.




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




Section 2.15. Book-Entry Provisions for Global Notes.




          (a) The Global Notes initially shall (i) be registered in the name of the Depository or the
nominee of such Depository, (ii) be delivered to the Trustee as custodian for such Depository and
(iii) bear legends as set forth in Section 2.17 hereof.




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




32









 








          (b) Interests of beneficial owners in the Global Notes may be transferred or exchanged for
Certificated Notes in accordance with the rules and procedures of the Depository and the provisions
of Section 2.16 hereof. In addition, Certificated Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in Global Notes if (i) the Depository (x)
notifies the Issuer that it is unwilling or unable to continue as Depository for any Global Note
and the Issuer fails to appoint a successor Depository within 90 days of such notice or (y) has
ceased to be a clearing company registered under the Exchange Act and a successor Depository is not
appointed by the Issuer within 90 days after becoming aware of such cessation or (ii) the Issuer,
at its option but subject to the procedures of the Depository, notifies the Trustee in writing that
the Issuer elects to cause the issuance of Certificated Notes.




          (c) In connection with the transfer of Global Notes as an entirety to beneficial owners
pursuant to paragraph (b), the Global Notes shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuer shall execute, and the Trustee shall, upon receipt of an
authentication order from the Issuer in the form of an Officers’ Certificate, authenticate and
deliver, to each beneficial owner identified by the Depository in writing in exchange for its
beneficial interest in the Global Notes, an equal aggregate principal amount of Certificated Notes
of authorized denominations.




          (d) Any Certificated Note constituting a Restricted Security delivered in exchange for an
interest in a Global Note pursuant to paragraph (b) or (c) shall, except as otherwise provided by
Section 2.16 hereof, bear the Private Placement Legend.




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




Section 2.16. Registration of Transfers and Exchanges.




          (a) Transfer and Exchange of Certificated Notes. When Certificated Notes are
presented to the Registrar or co-Registrar with a request:





(i) to register the transfer of the Certificated Notes; or




(ii) to exchange such Certificated Notes for an equal principal amount of Certificated
Notes of other authorized denominations,



the Registrar or co-Registrar shall register the transfer or make the exchange as requested if the
requirements under this Indenture as set forth in this Section 2.16 for such transactions are met;
provided, however, that the Certificated Notes presented or surrendered for registration of
transfer or exchange:





     (I) shall be duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Registrar or co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and




     (II) in the case of Certificated Notes the offer and sale of which have not been
registered under the Securities Act and are presented for transfer or exchange prior to (x)
the date which is one year after the later of the date of original issue and the last date
on which the Issuer or any Affiliate of the Issuer was the owner of such Note, or any
predecessor thereto and (y) such later date, if any, as may be required by any subsequent
change in applicable law (the “Resale 



33









 






Restriction Termination Date”), such Certificated Notes shall be accompanied, in the
sole discretion of the Issuer, by the following additional information and documents, as
applicable:





     (A) if such Certificated Note is being delivered to the Registrar or
co-Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification to that effect (substantially in the form of Exhibit
C hereto); or




     (B) if such Certificated Note is being transferred to a Qualified Institutional
Buyer in accordance with Rule 144A, a certification to that effect (substantially in
the form of Exhibit C hereto); or




     (C) if such Certificated Note is being transferred in reliance on Regulation S,
delivery of a certification to that effect (substantially in the form of Exhibit
C hereto) and a transferor certificate for Regulation S transfers substantially
in the form of Exhibit E hereto; or




     (D) if such Certificated Note is being transferred to an Institutional
Accredited Investor, delivery of a certification to that effect (substantially in
the form of Exhibit C hereto), a certificate of the transferee in
substantially the form of Exhibit D and, at the option of the Issuer, an
Opinion of Counsel reasonably satisfactory to the Issuer to the effect that such
transfer is in compliance with the Securities Act; or




     (E) if such Certificated Note is being transferred in reliance on Rule 144
under the Securities Act, delivery of a certification to that effect substantially
in the form of Exhibit C hereto) and, at the option of the Issuer, an Opinion of
Counsel reasonably satisfactory to the Issuer to the effect that such transfer is in
compliance with the Securities Act; or




     (F) if such Certificated Note is being transferred in reliance on another
exemption from the registration requirements of the Securities Act, a certification
to that effect (substantially in the form of Exhibit C hereto) and, at the option of
the Issuer, an Opinion of Counsel reasonably satisfactory to the Issuer to the
effect that such transfer is in compliance with the Securities Act.



          (b) Restrictions on Transfer of a Certificated Note for a Beneficial Interest in a Global
Note. A Certificated 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 Registrar or
co-Registrar of a Certificated Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:





     (A) in the case of Certificated Notes, the offer and sale of which have not been
registered under the Securities Act and which are presented for transfer prior to the Resale
Restriction Termination Date, certification, substantially in the form of Exhibit C
hereto, that such Certificated Note is being transferred (I) to a Qualified Institutional
Buyer or (II) in an offshore transaction in reliance on Regulation S (and, in the case of
this clause II, the Issuer shall have received a transferor certificate for Regulation S
transfers substantially in the form of Exhibit E hereto; and



34









 






     (B) written instructions from the Holder thereof directing the Registrar or
co-Registrar to make, or to direct the Depository to make, an endorsement on the applicable
Global Note to reflect an increase in the aggregate amount of the Notes represented by the
Global Note,



then the Registrar or co-Registrar shall cancel such Certificated Note and cause, or direct the
Depository to cause, in accordance with the standing instructions and procedures existing between
the Depository and the Registrar or co-Registrar, the principal amount of Notes represented by the
applicable Global Note to be increased accordingly. If no Global Note representing Notes held by
Qualified Institutional Buyers or Persons acquiring Notes in offshore transactions in reliance on
Regulation S, as the case may be, is then outstanding, the Issuer shall issue and the Trustee
shall, upon receipt of an authentication order of the Issuer executed by an Officer, authenticate
such a Global Note in the appropriate principal amount.




          (c) Transfer and Exchange of Global Notes. The transfer and exchange of Global Notes
or beneficial interests therein shall be effected through the Depository in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the procedures of the
Depository therefor. Upon receipt by the Registrar or co-Registrar of written instructions, or
such other instruction as is customary for the Depository, from the Depository or its nominee,
respecting the transfer of an interest in one type of Global Note to another type of Global Note
then the Registrar or co-Registrar will cause, in accordance with the standing instructions and
procedures existing between the Depository and the Registrar or co-Registrar, the aggregate
principal amount of the applicable Global Note to be reduced or increased, as appropriate, by the
amount of the interest to be transferred. If the applicable type of Global Note required to
represent the interest to be transferred is not outstanding at the time of such request, the Issuer
shall issue and the Trustee shall, upon receipt of an authentication order from the Issuer executed
by an Officer, authenticate a new Global Note of such type in principal amount equal to the
principal amount of the interest to be transferred.




          (d) Transfer of a Beneficial Interest in a Global Note for a Certificated Note. (i)
Any Person having a beneficial interest in a Global Note may upon request exchange such beneficial
interest for a Certificated Note. Upon receipt by the Registrar or co-Registrar of written
instructions, or such other form of instructions as is customary for the Depository, from the
Depository or its nominee on behalf of any Person having a beneficial interest in a Global Note and
upon receipt by the Trustee of a written order or such other form of instructions as is customary
for the Depository or the Person designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such transfer or exchange of a
beneficial interest in Notes the offer and sale of which have not been registered under the
Securities Act and which Notes are presented for transfer or exchange prior to the Resale
Restriction Termination Date, the following additional information and documents:





     (A) if such beneficial interest is being transferred to the Person designated by the
Depository as being the beneficial owner, a certification from such Person to that effect
(substantially in the form of Exhibit C hereto); or




     (B) if such beneficial interest is being transferred to a Qualified Institutional Buyer
in accordance with Rule l44A, a certification to that effect (substantially in the form of
Exhibit C hereto); or




     (C) if such beneficial interest is being transferred in reliance on Regulation S,
delivery of a certification to that effect (substantially in the form of Exhibit C
hereto) and a transferor certificate for Regulation S transfers substantially in the form of
Exhibit E hereto; or



35









 






     (D) if such beneficial interest is being transferred to an Institutional Accredited
Investor, delivery of a certification to that effect (substantially in the form of
Exhibit C hereto), a certificate of the transferee in substantially the form of
Exhibit D and, at the option of the Issuer, an Opinion of Counsel reasonably
satisfactory to the Issuer to the effect that such transfer is in compliance with the
Securities Act; or




     (E) if such beneficial interest is being transferred in reliance on Rule 144 under the
Securities Act, delivery of a certification to that effect (substantially in the form of
Exhibit C hereto) and, at the option of the Issuer, an Opinion of Counsel reasonably
satisfactory to the Issuer to the effect that such transfer is in compliance with the
Securities Act; or




     (F) if such beneficial interest is being transferred in reliance on another exemption
from the registration requirements of the Securities Act, a certification to that effect
(substantially in the form of Exhibit C hereto) and, at the option of the Issuer, an
Opinion of Counsel reasonably satisfactory to the Issuer to the effect that such transfer is
in compliance with the Securities Act,



then the Registrar or co-Registrar will cause, in accordance with the standing instructions and
procedures existing between the Depository and the Registrar or co-Registrar, the aggregate
principal amount of the applicable Global Note to be reduced and, following such reduction, the
Issuer will execute and, upon receipt of an authentication order from the Issuer executed by an
Officer, the Trustee will authenticate and deliver to the transferee a Certificated Note in the
appropriate principal amount and series.




          (ii) Certificated Notes issued in exchange for a beneficial interest in a Global Note pursuant
to this Section 2.16(d) hereof shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Registrar or co-Registrar in writing. The Registrar or
co-Registrar shall deliver such Certificated Notes to the Persons in whose names such Certificated
Notes are so registered.




          (e) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any other
provisions of this Indenture, a Global Note may not be transferred as a whole except by the
Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such successor Depository.




          (f) Private Placement Legend. Upon the transfer, exchange or replacement of Notes not
bearing the Private Placement Legend, the Registrar or co-Registrar shall deliver Notes that do not
bear the Private Placement Legend. Upon the transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar or co-Registrar shall deliver only Notes that bear the
Private Placement Legend unless, and the Trustee is hereby authorized to deliver Notes without the
Private Placement Legend if, (i) the Resale Restriction Termination Date shall have occurred, (ii)
there is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Issuer and
the Trustee to the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities Act, (iii) such Note
has been sold pursuant to an effective registration statement under the Securities Act or (iv) such
Note is an Exchange Note.




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




36









 








          None of the Issuer, the Trustee, any agent of the Issuer or the Trustee (including any Paying
Agent or Registrar) will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a Global Note or for
maintaining, supervising or reviewing any records relating to such beneficial ownership interests.




          The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Note (including any transfers between or among Agent
Members or beneficial owners of interests in any Global Note) other than to require delivery of
such certificates and other documentation or evidence as are expressly required by, and to do so if
and when expressly required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.




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




Section 2.17. Restrictive Legends.




          Each Global Note and Certificated Note that constitutes a Restricted Security shall bear the
following legend (the “Private Placement Legend”) on the face thereof until the Resale
Restriction Termination Date, unless otherwise agreed to by the Issuer and the Holder thereof:





     THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:




     (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A “QIB”), (B) IT IS ACQUIRING THIS SECURITY IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR
(C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “IAI”);




     (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO THE ISSUER OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE



37









 






TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE
TO THE ISSUER), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IF SUCH
TRANSFER IS PURSUANT TO THE PRECEDING CLAUSE (D), (E) OR (F) AND THE ISSUER SO
REQUESTS, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER COMPLIES
WITH THE SECURITIES ACT; AND




          (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.



                     AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE GOVERNING THIS SECURITY CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.



                Each Global Note shall also bear the following legend:



               THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR
DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.



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



38









 






OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.




Each Note shall also bear the following legend:




            THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271
ET SEQ. OF THE INTERNAL REVENUE CODE. A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT
OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH NOTES BY
SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUERS AT THE FOLLOWING
ADDRESS: BASIC ENERGY SERVICES, 500 W. ILLINOIS, SUITE 100, MIDLAND, TEXAS 79701,
ATTENTION: CHIEF FINANCIAL OFFICER.



ARTICLE 3




REDEMPTION




Section 3.01. Notices to Trustee.




                 If the Issuer elects to redeem Notes pursuant to paragraph 5 of the Notes, at least 60 days
prior to the Redemption Date or during such other period as the Trustee may agree to, the Issuer
shall notify the Trustee in writing of the Redemption Date, the principal amount of Notes to be
redeemed and the Redemption Price, if then determinable, and deliver to the Trustee an Officers’
Certificate stating that such redemption will comply with the conditions contained herein and in
the Notes, as appropriate.




Section 3.02. Selection of Notes to be Redeemed.




                 In the event that less than all of the Notes are to be redeemed at any time, selection of the
Notes to be redeemed 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 then listed on a national security exchange, on a pro rata basis, by lot or by such method
as the Trustee shall deem fair and appropriate; provided, however, that no Notes of a principal
amount of $2,000 or less shall be redeemed in part; provided, further, that if a partial redemption
is made with the proceeds of any Qualified Equity Offering, selection of the Notes or portions
thereof for redemption shall be made by the Trustee only on a pro rata basis or on as nearly a pro
rata basis as is practicable (subject to the procedures of the Depository), unless such method is
otherwise prohibited. A new Note in a principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon delivery of the original Note to the Paying
Agent and cancellation of the original Note. On and after the Redemption Date, interest will cease
to accrue on Notes or portions thereof called for redemption as long as the Issuer has deposited
with the Paying Agents funds in U.S. legal tender in satisfaction of the applicable Redemption
Price and amount of accrued interest, if any, payable pursuant to this Indenture.




Section 3.03. Notice of Redemption.




                 Notice of redemption shall be mailed by first class mail at least 30 but not more than 60 days
before the Redemption Date to each Holder to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a Redemption Date if the notice is
issued in connection with a satisfaction and discharge of this Indenture. If any Note is to be
redeemed in part only,



39









 






the notice of redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed.




          The notice shall identify the Notes to be redeemed (including the CUSIP, ISIN or other
number(s) thereof) and shall state:




          (1) the Redemption Date;




          (2) the Redemption Price (if then determinable and otherwise the method for its computation)
and the amount of accrued interest, if any, to be paid;




          (3) that, if any Note is being redeemed in part, the portion of the principal amount (equal to
$2,000 in principal amount or any integral multiple of $1,000 in excess thereof) of such Note to be
redeemed and that, on and after the Redemption Date, upon surrender of such Note, a new Note or
Notes in principal amount equal to the unredeemed portion thereof will be issued;




          (4) the name, address and telephone number of the Paying Agent;




          (5) that Notes called for redemption must be surrendered to the Paying Agent at the address
specified to collect the Redemption Price plus accrued interest, if any;




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




          (7) the subparagraph of the Notes pursuant to which the Notes called for redemption are being
redeemed; and




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




Section 3.04. Effect of Notice of Redemption.




          Once the notice of redemption described in Section 3.03 hereof is mailed, Notes called for
redemption become due and payable on the Redemption Date and at the Redemption Price, including any
premium, plus accrued interest to the Redemption Date, if any. Upon surrender to the Paying Agent,
such Notes shall be paid at the Redemption Price, including any premium, plus accrued interest to
the Redemption Date, if any; provided that if the Redemption Date is after a 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.




          (a) No later than 10:00 a.m., New York City time, on each Redemption Date, the Issuer shall
have deposited with the Paying Agent in immediately available funds U.S. legal tender sufficient to
pay the Redemption Price of and accrued interest on all Notes to be redeemed on that date.




40









 








          (b) On and after any Redemption Date, if U.S. legal tender sufficient to pay the Redemption
Price of and accrued interest on Notes called for redemption shall have been made available in
accordance with clause (a), the Notes called for redemption will cease to accrue interest and the
only right of the Holders of such Notes will be to receive payment of the Redemption Price of and,
subject to the first proviso in Section 3.04, accrued and unpaid interest on such Notes to the
Redemption Date. If any Note called for redemption shall not be so paid, interest will continue to
accrue and be paid, from the Redemption Date until such redemption payment is made, on the unpaid
principal of the Note and any interest not paid on such unpaid principal, in each case, at the rate
and in the manner provided for in Section 2.12 hereof.




Section 3.06. Notes Redeemed in Part.




          Upon surrender of a Note that is redeemed in part, the Trustee shall authenticate for a Holder
a new Note equal in principal amount to the unredeemed portion of the Note surrendered.




ARTICLE 4




COVENANTS




Section 4.01. Payment of Notes.




          The Issuer shall pay the principal of and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal or interest shall be
considered paid on the date it is due if by 10:00 a.m., New York City time, the Trustee or Paying
Agent holds, for the benefit of the Holders, on that date U.S. legal tender designated for and
sufficient to pay such installment in full.




          The Issuer shall pay interest on overdue principal and interest on overdue interest, to the
extent lawful as provided for in Section 2.12 hereof.




Section 4.02. Reports to Holders.




          Whether or not required by the Commission, so long as any Notes are outstanding, the Issuer
will furnish to the Holders of Notes, or file electronically with the Commission through the
Commission’s Electronic Data Gathering, Analysis and Retrieval System (or any successor system),
within the time periods applicable to the Issuer under Section 13(a) or 15(d) of the Exchange Act:





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




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



          In addition, whether or not required by the Commission, the Issuer will file a copy of all of
the information and reports referred to in clauses (1) and (2) above with the Commission for public
availability within the time periods specified in the Commission’s rules and regulations (unless
the Com-




41









 







mission will not accept the filing) and make the information available to securities analysts
and prospective investors upon request. The Issuer and the Guarantors have agreed that, for so
long as any Notes remain outstanding, the Issuer will furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.




          Notwithstanding anything to the contrary, the Issuer will be deemed to have complied with its
obligations in the preceding two paragraphs following the filing of the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement) and prior to the effectiveness thereof
if the Exchange Offer Registration Statement includes the information specified in clause (1) above
at the times it would otherwise be required to file such Forms.




          The Issuer shall also comply with the provisions of Section 314(a) of the TIA.




          Should the Issuer deliver to the Trustee any such information, reports or certificates or any
annual reports, information, documents and other reports pursuant to Section 314(a) of the Trust
Indenture Act, delivery of such information, reports or certificates or any annual reports,
information, documents and other reports to the Trustee is for informational purposes only and the
Trustee’s receipt of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the Issuer’s compliance with
any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on
Officers’ Certificates).




Section 4.03. Waiver of Stay, Extension or Usury Laws.




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




Section 4.04. Compliance Certificate; Notice of Default; Tax Information.




          (a) The Issuer shall deliver to the Trustee, within 90 days after the end of its fiscal year
an Officers’ Certificate (one of the signers of which shall be the principal executive officer,
principal financial officer or principal accounting officer of the Issuer) stating that a review of
the activities of the Issuer and the Guarantors during such fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the Issuer and the
Guarantors have kept, observed, performed and fulfilled their obligations under this Indenture and
the Security Documents, and further stating, as to each such Officer signing such certificate, that
to the best of his or her knowledge the Issuer and the Guarantors have kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and the Security Documents and
are not in default in the performance or observance of any of the terms, provisions and conditions
hereof or thereof (or, if a Default or Event of Default shall have occurred, describing all or such
Defaults or Events of Default of which he or she may have knowledge and what action each is taking
or proposes to take with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the principal of




42









 







or interest, if any, on the Notes are prohibited or if such event has
occurred, a description of the event and what action the Issuer is taking or proposes to take with
respect thereto. The Officers’ Certificate shall also notify the Trustee should the Issuer elect
to change the manner in which it fixes its fiscal year end.




          (b) The annual financial statements delivered pursuant to Section 4.02 hereof shall be
accompanied by a written report addressed to the Trustee of the Issuer’s independent accountants
(who shall be a firm of established national reputation) that in conducting their audit of the
financial statements included therein nothing has come to their attention that would lead them to
believe that a Default or Event of Default has occurred under this Indenture insofar as they relate
to accounting matters or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such violation.




          (c) (i) If any Default or Event of Default has occurred and is continuing or (ii) if any
Holder seeks to exercise any remedy hereunder with respect to a claimed default under this
Indenture, the Security Documents or the Notes, the Issuer shall deliver to the Trustee, at its
address set forth in Section 11.02 hereof, by registered or certified mail or facsimile
transmission followed by hard copy by overnight courier, registered or certified mail an Officers’
Certificate specifying such Default or Event of Default, notice or other action, the status thereof
and what action the Issuer is taking or proposes to take within five Business Days of their
becoming aware of such occurrence.




          (d) The Issuer, or one of its representatives, agents or employees, shall calculate and
deliver to the Trustee all OID information to be reported by the Trustee to Holders as required by
applicable law.




Section 4.05. Payment of Taxes and Other Claims.




          The Issuer shall pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (i) all material taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to taxes) levied or imposed upon it or
any of its Subsidiaries or properties of it or any of its Subsidiaries and (ii) all lawful claims
for labor, materials and supplies that, if unpaid, might by law become a Lien upon the property of
it or any of its Subsidiaries; provided, however, that the Issuer shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent required under GAAP,
have been taken.




Section 4.06. Corporate Existence.




          Subject to Article 5 hereof, the Issuer shall each do or cause to be done all things necessary
to preserve and keep in full force and effect (i) its corporate existence, and the corporate,
partnership or limited liability company or other existence of each Subsidiary, in accordance with
the respective organizational documents (as the same may be amended from time to time) of each
Subsidiary and (ii) the material rights (charter and statutory), licenses and franchises of the
Issuer and its Subsidiaries except where the failure to preserve and keep in full force and effect
any such rights, licenses and franchise shall not have a material adverse effect on the financial
condition, business, operations or prospects of the Issuer and its Subsidiaries taken as a whole;
and provided that the Issuer shall not be required to preserve any such right, license or
franchise, or the corporate, limited liability company, partnership or other existence
of any of its Subsidiaries, if the Board of Directors of the Issuer shall determine that
the preservation the-



43









 






reof is no longer desirable in the conduct of the business of the Issuer and
its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders.




Section 4.07. Maintenance of Office or Agency.




          The Issuer shall maintain an office or agency in The City of New York where Notes may be
surrendered for registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served.
The Issuer hereby initially designates as such agency the corporate trust office of The Bank of
New York Mellon, acting on behalf (for the benefit) of, the Trustee, located at 101 Barclay Street,
Floor 21 West, New York, New York 10286. The Issuer shall give prompt written notice to the
Trustee of any change in the location, of such office or agency. If at any time the Issuer shall
fail to maintain any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made or served at the
corporate trust office in The City of New York of The Bank of New York Mellon.




          The Issuer may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations. The Issuer shall give prompt written notice to the Trustee of such
designation or rescission and of any change in the location of any such other office or agency.
The Issuer hereby initially designates the Corporate Trust Office as one such additional office.




Section 4.08. Compliance with Laws.




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




Section 4.09. Maintenance of Properties and Collateral and Insurance.




          (a) The Issuer shall cause all material properties owned by or leased by it or any of its
Subsidiaries used or useful to the conduct of the Issuer’s business or the business of any of its
Subsidiaries to be maintained and kept in normal condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its judgment may be necessary, so
that the business carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section 4.09(a) shall prevent the Issuer or
any of its Subsidiaries from discontinuing the use, operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is, in the judgment of
the Board of Directors of the Issuer or of the Board of Directors of any Subsidiary of the Issuer
concerned, or of an Officer (or other agent employed by the Issuer or of any of its Subsidiaries)
of the Issuer or any of its Subsidiaries having managerial responsibility for any such property,
desirable in the conduct of the business of the Issuer or any Subsidiary of the Issuer, and if such
discontinuance or disposal is not adverse in any material respect to the Holders.




44









 








          (b) The Issuer will, and will cause its Restricted Subsidiaries to, maintain all equipment
constituting Collateral in good condition and repair, reasonable wear and tear excepted, and shall
as quickly as commercially practicable make or cause to be made all repairs, replacements and other
improvements that are necessary or appropriate in the conduct of the Issuer’s or its Restricted
Subsidiaries ordinary course of business. Specifically in connection with the foregoing, the Issuer
will not, and will cause its Restricted Subsidiaries not to, remove or separate any part, accessory
or accession that is part of or affixed to an item of Collateral (whether a part of or affixed to
such Collateral on the Issue Date or thereafter becoming a part thereof or affixed thereto) unless
such part, accessory or accession is damaged, worn-out or obsolete (in which case the same shall
promptly be replaced by a working part, accessory or accession of the same function) or unless
separated and such part, accessory or accession remains Collateral affixed to other Collateral, or
such part, accessory or accession is sold or otherwise disposed of in accordance with this
Indenture.




          (c) The Issuer shall maintain, and shall cause its respective Subsidiaries to maintain,
insurance with responsible carriers against such risks and in such amounts, and with such
deductibles, retentions, self-insured amounts and co-insurance provisions, as are customarily
carried by corporations operating assets of a similar nature in the same or similar localities,
including property and casualty loss, workers’ compensation and interruption of business insurance.




Section 4.10. Limitations on Additional Indebtedness.




          (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, incur any Indebtedness; provided that the Issuer or any Guarantor may incur additional
Indebtedness and any Restricted Subsidiary may incur Acquired Indebtedness, in each case, if, after
giving effect thereto, the Consolidated Interest Coverage Ratio would be at least 2.00 to 1.00 (the
“Coverage Ratio Exception”); provided, however, that Acquired Indebtedness shall not exceed
an aggregate principal amount of $20.0 million at any time outstanding.




          (b) Notwithstanding the above, each of the following shall be permitted (the “Permitted
Indebtedness”):





     (1) Indebtedness of the Issuer and any Guarantor under the Credit Facilities in an
aggregate amount at any time outstanding not to exceed $100.0 million;




     (2) Indebtedness under (a) the Notes and the Note Guarantees issued on the Issue Date
and (b) the Exchange Notes and the Note Guarantees in respect thereof to be issued pursuant
to the Registration Rights Agreement;




     (3) Indebtedness of the Issuer and the Restricted Subsidiaries to the extent
outstanding on the Issue Date after giving effect to the intended use of proceeds of the
Notes (other than Indebtedness referred to in clause (1), (2) or (5));




     (4) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes
of the Issuer or any Restricted Subsidiary not for the purpose of speculation; provided that
in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations
relate to payment obligations on Indebtedness otherwise permitted to be incurred by this
Section 4.10, and (b) the notional principal amount of such Hedging Obligations at the time
incurred does not exceed the principal amount of the Indebtedness to which such Hedging
Obligations relate;



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     (5) Indebtedness of the Issuer owed to a Restricted Subsidiary and Indebtedness of any
Restricted Subsidiary owed to the Issuer or any other Restricted Subsidiary; provided,
however, that upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or
such Indebtedness being owed to any Person other than the Issuer or a Restricted Subsidiary,
the Issuer or such Restricted Subsidiary, as applicable, shall be deemed to have incurred
Indebtedness not permitted by this clause (5);



     (6) Indebtedness in respect of (a) self-insurance obligations or completion, bid,
performance, appeal or surety bonds issued for the account of the Issuer or any Restricted
Subsidiary in the ordinary course of business, including guarantees or obligations of the
Issuer or any Restricted Subsidiary with respect to letters of credit supporting such
self-insurance, completion, bid, performance, appeal or surety obligations (in each case
other than for an obligation for money borrowed) or (b) obligations represented by letters
of credit for the account of the Issuer or any Restricted Subsidiary, as the case may be, in
order to provide security for workers’ compensation claims;



     (7) Purchase Money Indebtedness incurred by the Issuer or any Restricted Subsidiary
after the Issue Date, and Refinancing Indebtedness thereof, in an aggregate principal amount
not to exceed at any time outstanding the greater of (a) $50.0 million or (b) 15.0% of the
Issuer’s Consolidated Tangible Assets;



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



     (9) Indebtedness arising in connection with endorsement of instruments for deposit in
the ordinary course of business;



     (10) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to the
Coverage Ratio Exception or clause (2) or (3) above or this clause (10);



     (11) indemnification, adjustment of purchase price, earn-out or similar obligations
(including without limitation any Earn Out Obligations), in each case, incurred or assumed
in connection with the acquisition or disposition of any business or assets of the Issuer or
any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Equity Interests for the purpose of financing or in contemplation of any
such acquisition; provided that (a) any amount of such obligations included on the face of
the balance sheet of the Issuer or any Restricted Subsidiary shall not be permitted under
this clause (11) and (b) in the case of a disposition, the maximum aggregate liability in
respect of all such obligations outstanding under this clause (11) shall at no time exceed
the gross proceeds actually received by the Issuer and the Restricted Subsidiaries in
connection with such disposition;



     (12) Contingent Obligations of the Issuer and the Guarantors in respect of Indebtedness
otherwise permitted under this Section 4.10;



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     (13) Indebtedness of Foreign Restricted Subsidiaries in an aggregate amount outstanding
at any one time not to exceed 10% of such Foreign Restricted Subsidiaries’ Consolidated
Tangible Assets; and;




     (14) additional Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate
principal amount not to exceed $40.0 million at any time outstanding.



          For purposes of determining compliance with this Section 4.10, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness
described in clauses (1) through (14) above or is entitled to be incurred pursuant to the Coverage
Ratio Exception, the Issuer shall, in its sole discretion, classify such item of Indebtedness and
may divide and classify such Indebtedness in more than one of the types of Indebtedness described,
except that Indebtedness incurred under the Credit Facilities on the Issue Date shall be deemed to
have been incurred under clause (1) above, and may later reclassify any item of Indebtedness
described in clauses (1) through (14) above (provided that at the time of reclassification it meets
the criteria in such category or categories). In addition, for purposes of determining any
particular amount of Indebtedness under this Section 4.10, guarantees, Liens or letter of credit
obligations supporting Indebtedness otherwise included in the determination of such particular
amount shall not be included so long as incurred by a Person that could have incurred such
Indebtedness.




Section 4.11. Limitations on Restricted Payments.




          (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, make any Restricted Payment if at the time of such Restricted Payment:





     (1) a Default shall have occurred and be continuing or shall occur as a consequence
thereof;




     (2) (a) the Issuer is not able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to the Coverage Ratio Exception or (b) the
Consolidated Leverage Ratio exceeds 3.00 to 1.00; or




     (3) the amount of such Restricted Payment, when added to the aggregate amount of all
other Restricted Payments made after the Issue Date (other than Restricted Payments made
pursuant to clauses (2), (3), (4) or (5) of clause (b) of this Section 4.11), exceeds the
sum (the “Restricted Payments Basket”) of (without duplication):



                    (A) 50% of Consolidated Net Income for the period (taken as one accounting period)
commencing on the first day of the fiscal quarter in which the Issue Date occurs to and
including the last day of the fiscal quarter ended immediately prior to the date of such
calculation for which consolidated financial statements are available (or, if such
Consolidated Net Income shall be a deficit, minus 100% of such deficit), plus




                    (B) 100% of (A) (i) the aggregate net cash proceeds and (ii) the Fair Market Value of
(x) marketable securities (other than marketable securities of the Issuer), (y) Equity
Interests of a Person (other than the Issuer or an Affiliate of the Issuer) engaged in a
Permitted Business and (z) other assets used in any Permitted Business, in the case of
clauses (i) and (ii), received by the Issuer since the Issue Date as a contribution to its
common equity capital or from the issue or sale of Qualified Equity Interests of the Issuer
or from the issue or sale of convertible




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or exchangeable Disqualified Equity Interests or convertible or exchangeable debt
securities of the Issuer that have been converted into or exchanged for such Qualified
Equity Interests (other than Equity Interests or debt securities sold to a Subsidiary of the
Issuer), and (B) the aggregate net cash proceeds, if any, received by the Issuer or any of
its Restricted Subsidiaries upon any conversion or exchange described in clause (A) above,
plus





          (C) 100% of (A) the aggregate amount by which Indebtedness (other than any Subordinated
Indebtedness) of the Issuer or any Restricted Subsidiary is reduced on the Issuer’s
consolidated balance sheet upon the conversion or exchange after the Issue Date of any such
Indebtedness into or for Qualified Equity Interests of the Issuer and (B) the aggregate net
cash proceeds, if any, received by the Issuer or any of its Restricted Subsidiaries upon any
conversion or exchange described in clause (A) above, plus




          (D) in the case of the disposition or repayment of or return on any Investment that was
treated as a Restricted Payment made after the Issue Date, an amount (to the extent not
included in the computation of Consolidated Net Income) equal to the lesser of (i) 100% of
the aggregate amount received by the Issuer or any Restricted Subsidiary in cash or other
property (valued at the Fair Market Value thereof) as the return of capital with respect to
such Investment and (ii) the amount of such Investment that was treated as a Restricted
Payment, in either case, less the cost of the disposition of such Investment and net of
taxes, plus




          (E) upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the
lesser of (i) the Fair Market Value of the Issuer’s proportionate interest in such
Subsidiary immediately following such Redesignation, and (ii) the aggregate amount of the
Issuer’s Investments in such Subsidiary to the extent such Investments reduced the
Restricted Payments Basket and were not previously repaid or otherwise reduced.



            (b) Notwithstanding the foregoing, the provisions set forth in clause (a) of this Section 4.11
will not prohibit:





     (1) the payment of (a) any dividend or redemption payment or the making of any
distribution within 60 days after the date of declaration thereof if, on the date of
declaration, the dividend, redemption or distribution payment, as the case may be, would
have complied with the provisions of this Indenture or (b) any dividend or similar
distribution by a Restricted Subsidiary of the Issuer to the holders of its Equity Interests
on a pro rata basis;




     (2) the redemption or acquisition of any Equity Interests of the Issuer or any
Restricted Subsidiary in exchange for, or out of the proceeds of the substantially
concurrent issuance and sale of, Qualified Equity Interests;




     (3) the purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Indebtedness of the Issuer or any Restricted Subsidiary (a) in
exchange for, or out of the proceeds of the substantially concurrent issuance and sale of,
Qualified Equity Interests, (b) in exchange for, or out of the proceeds of the substantially
concurrent incurrence of, Refinancing Indebtedness permitted to be incurred under Section
4.10 and the other terms of this Indenture or (c) upon a Change of Control or in connection
with an Asset Sale to the extent required by the agreement governing such Subordinated
Indebtedness but only if the Issuer shall have complied with Section 4.12 and Section 4.15
and purchased all Notes validly tendered pursuant to the relevant offer prior to redeeming
such Subordinated Indebtedness;




48












 






     (4) the redemption, repurchase or other acquisition or retirement for value of Equity
Interests of the Issuer held by officers, directors or employees or former officers,
directors or employees (or their transferees, estates or beneficiaries under their estates),
either (x) upon any such individual’s death, disability, retirement, severance or
termination of employment or service or (y) pursuant to any equity subscription agreement,
stock option agreement, stockholders’ agreement or similar agreement; provided, in any case,
that the aggregate cash consideration paid for all such redemptions, repurchases or other
acquisitions or retirements shall not exceed (A) $5.0 million during any calendar year (with
unused amounts in any calendar year being carried forward to the next succeeding calendar
year) plus (B) the amount of any net cash proceeds received by or contributed to the Issuer
from the issuance and sale after the Issue Date of Qualified Equity Interests of the Issuer
to its officers, directors or employees that have not been applied to the payment of
Restricted Payments pursuant to this clause (4), plus (C) the net cash proceeds of any
“key-man” life insurance policies that have not been applied to the payment of Restricted
Payments pursuant to this clause (4);




     (5) (a) repurchases, redemptions or other acquisitions or retirements for value of
Equity Interests deemed to occur upon the exercise of stock options, warrants, rights to
acquire Equity Interests or other convertible securities to the extent such Equity Interests
represent a portion of the exercise or exchange price thereof and (b) any repurchases,
redemptions or other acquisitions or retirements for value of Equity Interests made in lieu
of withholding taxes in connection with any exercise or exchange of stock options, warrants
or other similar rights;




     (6) dividends on Preferred Stock or Disqualified Equity Interests issued in compliance
with Section 4.10 to the extent such dividends are included in the definition of
Consolidated Interest Expense;




     (7) the payment of cash in lieu of fractional Equity Interests; payments or
distributions to dissenting stockholders pursuant to applicable law in connection with a
merger, consolidation or transfer of assets that complies with the provisions of Article 5;
or




     (8) payment of other Restricted Payments from time to time in an aggregate amount not
to exceed (a) $10.0 million in any fiscal year or (b) $25.0 million in aggregate amount
since the Issue Date;


provided that (a) in the case of any Restricted Payment pursuant to clauses (3), (4) or (9) above,
no Default shall have occurred and be continuing or occur as a consequence thereof and (b) no
issuance and sale of Qualified Equity Interests used to make a payment pursuant to clauses (2), (3)
or (4)(B) above shall increase the Restricted Payments Basket.




Section 4.12. Limitations on Asset Sales and Collateral Dispositions.




          (a) The Issuer will not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Sale (including a Collateral Disposition that is also an Asset
Sale) unless:





     (1) the Issuer or such Restricted Subsidiary receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the assets included in such Asset
Sale; and



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     (2) at least 75% of the total consideration in such Asset Sale consists of cash or Cash
Equivalents.



          Except with respect to a Collateral Disposition, for purposes of clause (2), the following
shall be deemed to be cash:





     (A) the amount (without duplication) of any Indebtedness (other than Subordinated
Indebtedness) of the Issuer or such Restricted Subsidiary that is expressly assumed by the
transferee of any such assets pursuant to (i) a written novation agreement that releases the
Issuer or such Restricted Subsidiary from further liability therefor or (ii) an assignment
agreement that includes, in lieu of such a release, the agreement of the transferee or its
parent company to indemnify and hold harmless the Issuer or such Restricted Subsidiary from
and against any loss, liability or cost in respect of such assumed liability,




     (B) the amount of any obligations received from such transferee that are within 30 days
after such Asset Sale converted by the Issuer or such Restricted Subsidiary into cash (to
the extent of the cash actually so received), and




     (C) the Fair Market Value of (i) any assets (other than securities) received by the
Issuer or any Restricted Subsidiary to be used by it in a Permitted Business, (ii) Equity
Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted
Business that shall become a Restricted Subsidiary immediately upon the acquisition of such
Person by the Issuer or (iii) a combination of (i) and (ii).



          (b) If at any time any non-cash consideration received by the Issuer or any Restricted
Subsidiary, as the case may be, in connection with any Asset Sale is repaid or converted into or
sold or otherwise disposed of for cash (other than interest received with respect to any such
non-cash consideration), then the date of such repayment, conversion or disposition shall be deemed
to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be
applied in accordance with this Section 4.12.




          (c) Any Asset Sale pursuant to a condemnation, appropriation or other similar taking,
including by deed in lieu of condemnation, or pursuant to the foreclosure or other enforcement of a
Permitted Lien or exercise by the related lienholder of rights with respect thereto, including by
deed or assignment in lieu of foreclosure shall not be required to satisfy the conditions set forth
in subclauses (1) and (2) of clause (a) of this Section 4.12.




          (d) Notwithstanding the foregoing, except with respect to a Collateral Disposition, the 75%
limitation referred to above shall be deemed satisfied with respect to any Asset Sale in which the
cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance
with the foregoing provision on an after-tax basis, is equal to or greater than what the after-tax
proceeds would have been had such Asset Sale complied with the aforementioned 75% limitation.




          (e) If the Issuer or any Restricted Subsidiary engages in an Asset Sale that is not a
Collateral Disposition, the Issuer or such Restricted Subsidiary shall, no later than 365 days
following the consummation thereof, apply all or any of the Net Available Proceeds therefrom to:




50









 









     (i) satisfy all mandatory repayment obligations under any Credit Facilities arising by
reason of such Asset Sale, and in the case of any such repayment under any revolving credit
facility, effect a permanent reduction in the availability under such revolving credit
facility;




     (ii) repay any Indebtedness which was secured by the assets sold in such Asset Sale;




     (iii) (A) make any capital expenditure or otherwise invest all or any part of the Net
Available Proceeds thereof in the purchase of assets (other than securities) to be used by
the Issuer or any Restricted Subsidiary in the Permitted Business, (B) acquire Qualified
Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a
Permitted Business that shall become a Restricted Subsidiary immediately upon the
consummation of such acquisition or (C) a combination of (A) and (B); and/or




     (iv) make a Net Proceeds Offer (and purchase or redeem Pari Passu Indebtedness) in
accordance with the procedures described in clause (g) of this Section 4.12.



               (f) The amount of Net Available Proceeds of an Asset Sale other than a Collateral Disposition
not applied or invested as provided in the preceding clause (e) shall constitute “Excess
Proceeds.”




               (g) When the aggregate amount of Excess Proceeds equals or exceeds $15.0 million, the Issuer
shall make an offer to purchase from all Holders and, if applicable, purchase or redeem (or make an
offer to do so) any Pari Passu Indebtedness of the Issuer the provisions of which require the
Issuer to purchase or redeem such Indebtedness with the proceeds from any Asset Sales (or offer to
do so), in an aggregate principal amount of Notes and such Pari Passu Indebtedness equal to the
amount of such Excess Proceeds as follows:





     (1) the Issuer will (a) make an offer to purchase (a “Net Proceeds Offer”) to
all Holders in accordance with the procedures set forth in this Indenture, and (b) purchase
or redeem (or make an offer to do so) any such other Pari Passu Indebtedness, pro rata in
proportion to the respective principal amounts of the Notes and such other Indebtedness
required to be purchased or redeemed, the maximum principal amount of Notes and Pari Passu
Indebtedness that may be purchased or redeemed out of the amount (the “Payment
Amount”) of such Excess Proceeds;




     (2) the offer price for the Notes will be payable in cash in an amount equal to 100% of
the principal amount of the Notes tendered pursuant to a Net Proceeds Offer, plus accrued
and unpaid interest and Liquidated Damages thereon, if any, to the date such Net Proceeds
Offer is consummated (the “Offered Price”), in accordance with the procedures set
forth in this Indenture, and the purchase or redemption price for such Pari Passu
Indebtedness (the “Pari Passu Indebtedness Price”) shall be as set forth in the
related documentation governing such Indebtedness;




     (3) if the aggregate Offered Price of Notes validly tendered and not withdrawn by
Holders thereof exceeds the pro rata portion of the Payment Amount allocable to the Notes,
Notes to be purchased will be selected on a pro rata basis; and



     (4) upon completion of such Net Proceeds Offer in accordance with the foregoing
provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer was
made shall be deemed to be zero.



51









 





          (h) To the extent that the sum of the aggregate Offered Price of Notes tendered pursuant to a
Net Proceeds Offer and the aggregate Pari Passu Indebtedness Price paid to the holders of such Pari
Passu Indebtedness is less than the Payment Amount relating thereto (such shortfall constituting a
“Net Proceeds Deficiency”), the Issuer may use the Net Proceeds Deficiency, or a portion
thereof, for any purposes not otherwise prohibited by the provisions of this Indenture.




          (i) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Collateral Disposition unless the Trustee has or is promptly granted a
perfected first priority security interest (subject only to Permitted Collateral Liens) in all
assets or property received by the Issuer or any Restricted Subsidiary as consideration therefor
(excluding cash or Cash Equivalents) as additional Collateral under the Security Documents to
secure the Note Obligations, and, in the case of cash or Cash Equivalents constituting Net
Available Proceeds, such cash or Cash Equivalents must be deposited into a segregated account under
the sole control of the Trustee that includes only proceeds from the Collateral Disposition and
interest earned thereon (an “Asset Sale Proceeds Account”), which proceeds shall be subject
to release from the Asset Sale Proceeds Account for the uses described in clause (j), (l) or (m) of
this Section 4.12 as provided in this Indenture and the Security Documents.




          (j) If the Issuer or any Restricted Subsidiary engages in a Collateral Disposition, the Issuer
or such Restricted Subsidiary shall, no later than 330 days following the consummation thereof,
apply all or any of the Net Available Proceeds therefrom to:





     (1) acquire additional assets of a type constituting Collateral (“Additional
Assets”); provided however, that the Trustee has or is immediately granted a perfected
first priority security interest (subject only to Permitted Collateral Liens) in such
Additional Assets; and




     (2) repurchase or redeem Notes.



          (k) The amount of Net Available Proceeds not applied or invested as provided in the preceding
clause (j) shall constitute “Excess Collateral Proceeds.”




          (l) In connection with any Collateral Disposition, if there are any Excess Collateral
Proceeds, no later than 331 days following such Collateral Disposition, the Issuer shall make an
offer to purchase Notes from all Holders as follows:





     (1) the Issuer will (a) make an offer to purchase (a “Collateral Proceeds
Offer”) to all Holders in accordance with the procedures set forth in this Indenture,
and (b) purchase or redeem (or make an offer to do so) the maximum aggregate principal
amount of Notes that may be purchased or redeemed out of such Excess Collateral Proceeds;




     (2) the offer price for the Notes will be payable in cash in an amount equal to the
Offered Price, in accordance with the procedures set forth in this Indenture;




     (3) if the aggregate Offered Price of Notes validly tendered and not withdrawn by
Holders thereof exceeds the amount of such Excess Collateral Proceeds, Notes to be purchased
will be selected on a pro rata basis; and



         (4) upon completion of such Collateral Proceeds Offer in accordance with the foregoing
provisions, the amount of Excess Collateral Proceeds with respect to which such Collateral
Proceeds Offer was made shall be deemed to be zero.



52









 





          (m) To the extent that the aggregate Offered Price of Notes tendered pursuant to a Collateral
Proceeds Offer is less than the amount of Excess Collateral Proceeds relating thereto (such
shortfall constituting a “Collateral Proceeds Deficiency”), the Issuer may withdraw the
Collateral Proceeds Deficiency from the Asset Sale Proceeds Account and use the Collateral Proceeds
Deficiency so withdrawn, or a portion thereof, for any purposes not otherwise prohibited by the
provisions of this Indenture.




          (n) Notwithstanding the foregoing, the sale, conveyance or other disposition of all or
substantially all of the assets of the Issuer and its Restricted Subsidiaries, taken as a whole,
will be governed by the provisions of Section 4.15 and/or the provisions of Article 5 and not by
the provisions of this Section 4.12.




          (o) Upon the commencement of a Net Proceeds Offer or a Collateral Proceeds Offer, the Issuer
must send by first-class mail, a notice to each Holder, with a copy to the Trustee, which notice
shall govern the terms of the such Offer. Such notice shall state:





     (1) that such Offer is being made pursuant to this Section 4.12;




     (2) the Offered Price and the Offer Payment Date;




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




     (4) that, unless the Issuer defaults in the payment of the Offered Price, any Notes
accepted for payment pursuant to such Offer shall cease to accrue interest after the Offer
Payment Date;




     (5) that such Offer shall remain open for at least 20 Business Days or for such longer
period as is required by law and that Holders accepting the offer to have their Notes
purchased pursuant to such Offer shall be required to surrender the Notes, with the form
entitled “Option of the Holder to Elect Purchase” on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of business on
the third Business Day preceding the Offer Payment Date;




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




     (7) that Holders whose Notes are being purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered;




     (8) any other procedures that a Holder must follow to accept such Offer or effect
withdrawal of such acceptance; and




     (9) the name and address of the Paying Agent.



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          (p) The Issuer shall publicly announce the results of a Net Proceeds Offer or Collateral
Proceeds Offer, as the case may be, on or as soon as practicable after the related Offer Payment
Date.




          (q) On the Offer Payment Date, the Issuer shall, to the extent lawful, (1) accept for payment
all Notes or portions of Notes properly tendered pursuant to the Net Proceeds Offer or Collateral
Proceeds Offer, as the case may be, or such lesser amount thereof as the Issuer is required to
purchase pursuant to this Section 4.12, (2) deposit with the Paying Agent an amount equal to the
Offered Price in respect of all Notes or portions of Notes properly tendered and accepted for
payment, and (3) deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions
of Notes being purchased by the Issuer.




          (r) After the Issuer’s satisfaction of its obligations under the preceding clause (q), the
Paying Agent shall as promptly as practicable mail to each Holder of Notes properly tendered the
Offered Price for such Notes, and the Trustee shall as promptly as practicable authenticate and
mail to each Holder a new Note in principal amount equal to any unpurchased portion of the Notes
surrendered, if any; provided however, that each such new Note shall be in a principal amount of
$2,000 or an integral multiple of $1,000.




          The Issuer shall comply with applicable tender offer rules, including the requirements of Rule
14e-1 under the Exchange Act and any other applicable laws and regulations in connection with the
purchase of Notes pursuant to a Net Proceeds Offer or a Collateral Proceeds Offer. To the extent
that the provisions of any securities laws or regulations conflict with this Section 4.12, the
Issuer shall comply with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Section 4.12 by virtue of this compliance.




Section 4.13. Limitations on Transactions with Affiliates.




          (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, in one transaction or a series of related transactions, sell, lease, transfer or
otherwise dispose of any of its assets to, or purchase any assets from, or enter into any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (an
“Affiliate Transaction”), unless:





     (1) such Affiliate Transaction is on terms that are no less favorable to the Issuer or
the relevant Restricted Subsidiary than those that would have been obtained in a comparable
transaction at such time on an arm’s-length basis by the Issuer or that Restricted
Subsidiary from a Person that is not an Affiliate of the Issuer or that Restricted
Subsidiary; and




     (2) the Issuer delivers to the Trustee:




     (a) with respect to any Affiliate Transaction involving aggregate value in
excess of $5.0 million, an Officers’ Certificate certifying that such Affiliate
Transaction complies with clause (1) above and a Secretary’s Certificate which sets
forth and authenticates a resolution that has been adopted by the Independent
Directors approving such Affiliate Transaction; and




     (b) with respect to any Affiliate Transaction involving aggregate value of
$25.0 million or more, the certificates described in the preceding clause (a) and a
written opinion as to the fairness of such Affiliate Transaction to the Issuer or
such Restricted



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Subsidiary from a financial point of view issued by an Independent
Financial Advisor to the Board of Directors of the Issuer.




(b) The foregoing restrictions shall not apply to:




(1) transactions exclusively between or among (a) the Issuer and one or more
Restricted Subsidiaries or (b) Restricted Subsidiaries;




(2) reasonable director, officer and employee compensation (including bonuses)
and other benefits (including pursuant to any employment agreement or any
retirement, health, stock option or other benefit plan) and indemnification
arrangements, in each case, as determined in good faith by the Issuer’s Board of
Directors or senior management;




(3) the entering into of a tax sharing agreement, or payments pursuant thereto,
between the Issuer and/or one or more Subsidiaries, on the one hand, and any other
Person with which the Issuer or such Subsidiaries are required or permitted to file
a consolidated tax return or with which the Issuer or such Subsidiaries are part of
a consolidated group for tax purposes to be used by such Person to pay taxes, and
which payments by the Issuer and the Restricted Subsidiaries are not in excess of
the tax liabilities that would have been payable by them on a stand-alone basis;




(4) scheduled payments of Earn Out Obligations of $5.0 million in any fiscal
year of the Issuer;




(5) any Permitted Investments;




(6) any Restricted Payments which are made in accordance with Section 4.11;




(7) (x) any agreement in effect on the Issue Date, as in effect on the Issue
Date or as thereafter amended or replaced in any manner that, taken as a whole, is
not more disadvantageous to the Holders or the Issuer in any material respect than
such agreement as it was in effect on the Issue Date or (y) any transaction pursuant
to any agreement referred to in the immediately preceding clause (x);




(8) any transaction with a Person (other than an Unrestricted Subsidiary of the
Issuer) which would constitute an Affiliate of the Issuer solely because the Issuer
or a Restricted Subsidiary owns an equity interest in or otherwise controls such
Person; and




(9) (a) any transaction with an Affiliate where the only consideration paid by
the Issuer or any Restricted Subsidiary is Qualified Equity Interests or (b) the
issuance or sale of any Qualified Equity Interests.



Section 4.14. Limitation on Liens.



The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
incur or permit to exist any Lien of any nature whatsoever securing Indebtedness or trade payables
(i) on any Collateral, except pursuant to a Security Document and except for Permitted Collateral
Liens or (ii) on any of their respective assets or properties (including Equity Interests of a
Restricted Subsidiary) that are not Collateral, except for Permitted Liens.




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Section 4.15. Change of Control.




          (a) Upon the occurrence of any Change of Control, unless the Issuer has previously or
concurrently exercised its right to redeem all of the Notes as described in paragraph 5 of the
Notes, each Holder will have the right to require that the Issuer purchase all or any portion
(equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes for a
cash price (the “Change of Control Purchase Price”) equal to 101% of the principal amount
of the Notes to be purchased, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date of purchase.




          (b) Within 30 days following the date on which the Change of Control occurs, the Issuer must
send by first-class mail, a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. Such notice shall state:





     (1) that the Change of Control Offer is being made pursuant to this Section 4.15 and
that all Notes tendered shall be accepted for payment;




     (2) the Change of Control Purchase Price and the purchase date (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date such notice is
mailed (the “Change of Control Payment Date”));




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




     (4) that, unless the Issuer defaults in the payment of the Change of Control Purchase
Price, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date;




     (5) that such Change of Control Offer shall remain open for at least 20 Business Days
or for such longer period as is required by law and that Holders accepting the offer to have
their Notes purchased pursuant to a Change of Control Offer shall be required to surrender
the Notes, with the form entitled “Option of the Holder to Elect Purchase” on the reverse of
the Note completed, to the Paying Agent at the address specified in the notice prior to the
close of business on the third Business Day preceding the Change of Control Payment Date;




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




     (7) that Holders whose Notes are being purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered;




     (8) any other procedures that a Holder must follow to accept a Change of Control Offer
or effect withdrawal of such acceptance; and




     (9) the name and address of the Paying Agent.



          (c) The Issuer shall publicly announce the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.




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          (d) On the Change of Control Payment Date, the Issuer shall, to the extent lawful, (1) accept
for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control
Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Purchase Price in
respect of all Notes or portions of Notes properly tendered and accepted for payment, and (3)
deliver or cause to be delivered to the Trustee the Notes properly accepted together with an
Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being
purchased by the Issuer.




          (e) The Paying Agent shall as promptly as practicable mail to each Holder of Notes properly
tendered the Change of Control Purchase Price for such Notes, and the Trustee shall as promptly as
practicable authenticate and mail to each Holder a new Note in principal amount equal to any
unpurchased portion of the Notes surrendered, if any; provided however, that each such new Note
shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.




          (f) The Issuer shall comply with applicable tender offer rules, including the requirements of
Rule 14e-1 under the Exchange Act and any other laws and regulations to the extent such laws and
regulations are applicable in connection with a Change of Control Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of this Section 4.15,
the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed
to have breached its obligations under the provisions of this Section 4.15 by virtue thereof.




          (g) The provisions of this Section 4.15 that require the Issuer to make a Change of Control
Offer following a Change of Control shall be applicable regardless of whether any other provisions
of this Indenture are applicable to the transaction giving rise to the Change of Control.




          (h) The Issuer’s obligation to make a Change of Control Offer shall be satisfied 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 Indenture applicable to a Change of Control Offer made by
the Issuer and purchases all Notes properly tendered and not withdrawn under such Change of Control
Offer.




          (i) Notwithstanding anything to the contrary in this Indenture, a Change of Control Offer may
be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive
agreement is in place for the Change of Control at the time of making of the Change of Control
Offer.




Section 4.16. Limitations on Dividend and Other Restrictions Affecting Restricted
Subsidiaries.




          The Issuer shall not, and shall not permit any Restricted Subsidiary to create or otherwise
cause or permit to exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary to:




          (a) pay dividends or make any other distributions on or in respect of its Equity Interests;




          (b) make loans or advances, or pay any Indebtedness or other obligation owed, to the Issuer or
any other Restricted Subsidiary; or




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          (c) transfer any of its assets to the Issuer or any other Restricted Subsidiary;
except for:





     (1) encumbrances or restrictions existing under or by reason of applicable law,
regulation or order;




     (2) encumbrances or restrictions existing under this Indenture, the Security Documents,
the Notes and the Note Guarantees;




     (3) non-assignment provisions of any contract or any lease entered into in the ordinary
course of business;




     (4) encumbrances or restrictions existing under agreements existing on this date of
this Indenture as in effect on that date;




     (5) restrictions relating to any Lien permitted under this Indenture imposed by the
holder of such Lien;




     (6) restrictions imposed under any agreement to sell Equity Interests or assets, as
permitted under this Indenture, to any Person pending the closing of such sale;




     (7) any instrument governing Acquired Indebtedness or Equity Interests of a Person
acquired by the Issuer or any of its Restricted Subsidiaries, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any Person,
other than the Person or the properties or assets of the Person so acquired;




     (8) any other agreement governing Indebtedness entered into after the Issue Date that
contains encumbrances and restrictions that are not materially more restrictive with respect
to any Restricted Subsidiary than those in effect on the Issue Date with respect to that
Restricted Subsidiary pursuant to agreements in effect on the Issue Date;




     (9) customary provisions in partnership agreements, limited liability company
organizational governance documents, joint venture agreements and other similar agreements
entered into in the ordinary course of business that restrict the transfer of ownership
interests in such partnership, limited liability company, joint venture or similar Person;




     (10) Purchase Money Indebtedness incurred in compliance with Section 4.10 that imposes
restrictions of the nature described in clause (c) above on the assets acquired;




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




     (12) Indebtedness incurred or Equity Interests issued by any Restricted Subsidiary,
provided that the restrictions contained in the agreements or instruments governing such
Indebtedness or Equity Interests (a) either (i) apply only in the event of a payment default
or a default with respect to a financial covenant in such agreement or instrument or (ii)
will not materially affect the Issuer’s ability to pay all principal, interest and premium
and Liquidated Damages, if any, on the Notes, as determined in good faith by the Chief
Executive Officer and the Chief Financial Officer of the Issuer, whose determination shall
be conclusive; and (b) are not materially more



58









 






disadvantageous to the Holders of the Notes than is customary in comparable financings
(as determined by the Chief Financial Officer of the Issuer, whose determination shall be
conclusive); and




     (13) any encumbrances or restrictions imposed by any amendments or refinancings of the
contracts, instruments or obligations referred to in clauses (1) through (12) above;
provided that such amendments or refinancings are, in the good faith judgment of the
Issuer’s Board of Directors, no more materially restrictive with respect to such
encumbrances and restrictions than those prior to such amendment or refinancing.



Section 4.17. [RESERVED].




Section 4.18. Conduct of Business.




          The Issuer shall engage, and shall cause its Restricted Subsidiaries to engage, only in
businesses that, when considered together as a single enterprise, are primarily the Permitted
Business.




Section 4.19. Limitations on Designation of Unrestricted Subsidiaries.




          (a) The Issuer may designate any Subsidiary (including any newly formed or newly acquired
Subsidiary) of the Issuer as an “Unrestricted Subsidiary”
under this Indenture (a “Designation”)
only if:





     (1) no Default shall have occurred and be continuing at the time of or after giving
effect to such Designation; and




     (2) the Issuer would be permitted to make, at the time of such Designation, (a) a
Permitted Investment or (b) an Investment pursuant to clause (a) of Section 4.11 in either
case, in an amount (the “Designation Amount”) equal to the Fair Market Value of the
Issuer’s proportionate interest in such Subsidiary on such date.



          (b) No Subsidiary shall be Designated as an “Unrestricted Subsidiary” unless such Subsidiary:





     (1) has no Indebtedness other than Non-Recourse Debt;




     (2) is not party to any agreement, contract, arrangement or understanding with the
Issuer or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement
or understanding are no less favorable to the Issuer or the Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates;




     (3) is a Person with respect to which neither the Issuer nor any Restricted Subsidiary
has any direct or indirect obligation (a) to subscribe for additional Equity Interests or
(b) to maintain or preserve the Person’s financial condition or to cause the Person to
achieve any specified levels of operating results;




     (4) has not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Issuer or any Restricted Subsidiary, except for any guarantee given
solely to support the pledge by the Issuer or any Restricted Subsidiary of the Equity
Interests of such



59









 






Unrestricted Subsidiary, which guarantee is not recourse to the Issuer or any
Restricted Subsidiary; and



          (5) does not own any Collateral.




          (c) If, at any time, any Unrestricted Subsidiary fails to meet the preceding requirements as
an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes
of this Indenture and any Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary at such time and, if the Indebtedness is
not permitted to be incurred under Section 4.10 or the Lien is not permitted under Section 4.14,
the Issuer shall be in default of the applicable Section.




          (d) The Issuer may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a
“Redesignation”) only if:





     (1) no Default shall have occurred and be continuing at the time of and after giving
effect to such Redesignation; and




     (2) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding
immediately following such Redesignation would, if incurred or made at such time, have been
permitted to be incurred or made for all purposes of this Indenture.



          (e) All Designations and Redesignations must be evidenced by resolutions of the Board of
Directors of the Issuer, delivered to the Trustee certifying compliance with the foregoing
provisions.




Section 4.20. Additional Note Guarantees.




          (a) If, after the Issue Date, (a) the Issuer or any Restricted Subsidiary shall acquire or
create another Domestic Restricted Subsidiary, or (b) any Unrestricted Subsidiary is Redesignated a
Domestic Restricted Subsidiary, and (in each such case) such Domestic Restricted Subsidiary
guarantees any Indebtedness under any Credit Facility, then the Issuer shall cause such Domestic
Restricted Subsidiary to:





     (1) execute and deliver to the Trustee (a) a supplemental indenture in form and
substance satisfactory to the Trustee pursuant to which such Domestic Restricted Subsidiary
shall unconditionally guarantee all of the Issuer’s obligations under the Notes and this
Indenture and (b) a notation of guarantee in respect of its Note Guarantee; and




     (2) deliver to the Trustee the Opinion of Counsel required by Section 10.07 hereof;


provided, however, that a Domestic Restricted Subsidiary that owns net assets that have an
aggregate fair market value (as determined in good faith by the Board of Directors of the Issuer)
of less than 5% of the Consolidated Tangible Assets of the Issuer as of the end of the previous
fiscal quarter, need not become a Guarantor.




          (b) Notwithstanding the foregoing, if, as of the end of any fiscal quarter, the Domestic
Restricted Subsidiaries that are not required to be Guarantors pursuant to clause (a) of this
Section 4.20 collectively own net assets that have an aggregate fair market value (as determined in
good faith by the



60









 






Board of Directors of the Issuer) equal to or greater than 5% of the Issuer’s Consolidated
Tangible Assets, then the Issuer shall cause one or more of such non-Guarantor Domestic Restricted
Subsidiaries promptly to become a Guarantor or Guarantors such that after giving effect thereto,
the total net assets owned by all such remaining non-Guarantor Domestic Restricted Subsidiaries
will have an aggregate fair market value (as determined in good faith by the Board of Directors of
the Issuer) of less than 5% of the Consolidated Tangible Assets of the Issuer. Any such Domestic
Restricted Subsidiary so designated must become a Guarantor and execute a supplemental indenture
and deliver an Opinion of Counsel to the Trustee within 15 Business Days of the date on which it
was designated.




          (c) If any Restricted Subsidiary that is not a Guarantor owns or holds Collateral, the Issuer
shall cause such Restricted Subsidiary to:





     (1) execute and deliver to the Trustee (a) a supplemental indenture in form and
substance satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall
unconditionally guarantee all of the Issuer’s obligations under the Notes and this Indenture
and (b) a notation of guarantee in respect of its Note Guarantee; and




     (2) deliver to the Trustee the Opinion of Counsel required by Section 10.07 hereof.



Section 4.21. Limitations on Layering Indebtedness.




          (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any
agreement governing such Indebtedness) subordinated to any other Indebtedness of the Issuer or of
such Restricted Subsidiary, as the case may be, unless such Indebtedness is also by its terms (or
by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes
or the Note Guarantee of such Restricted Subsidiary, to the same extent and in the same manner as
such Indebtedness is subordinated to such other Indebtedness of the Issuer or such Restricted
Subsidiary, as the case may be.




          (b) For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right
of payment to any other Indebtedness of the Issuer or any Restricted Subsidiary solely by virtue of
being unsecured or secured by a Permitted Lien or by virtue of the fact that the holders of such
Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of
such holders priority over the other holders in the collateral held by them.




ARTICLE 5




SUCCESSOR CORPORATION




Section 5.01. Limitations on Mergers, Consolidations, Etc.




          (a) The Issuer shall not, directly or indirectly, in a single transaction or a series of
related transactions, consolidate or merge with or into another Person, or sell, lease, transfer,
convey or otherwise dispose of or assign all or substantially all of the assets of the Issuer or
the Issuer and the Restricted Subsidiaries (taken as a whole) unless:





     (1) either:




     (a) the Issuer shall be the surviving or continuing Person; or



61









 






     (b) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger or to which such sale, lease, transfer, conveyance or other
disposition or assignment shall be made (collectively, the “Successor”) is a
corporation, limited liability company or limited partnership organized and existing
under the laws of any State of the United States of America or the District of
Columbia, and the Successor expressly assumes, by agreements in form and substance
reasonably satisfactory to the Trustee, all of the obligations of the Issuer under
the Notes, this Indenture, the Security Documents and the Registration Rights
Agreement;




     (2) immediately after giving effect to such transaction and the assumption of the
obligations as set forth in clause 5.01(a)(1)(b) above and the incurrence of any
Indebtedness to be incurred in connection therewith, and the use of any net proceeds
therefrom on a pro forma basis, no Default shall have occurred and be continuing; and




     (3) immediately after giving effect to such transaction and the assumption of the
obligations as set forth in clause 5.01(a)(1)(b) above and the incurrence of any
Indebtedness to be incurred in connection therewith, and the use of any net proceeds
therefrom on a pro forma basis, the Issuer or the Successor, as the case may be, could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the
Coverage Ratio Exception.



          (b) For purposes of this Section 5.01, any Indebtedness of the Successor which was not
Indebtedness of the Issuer immediately prior to the transaction shall be deemed to have been
incurred in connection with such transaction.




          (c) Except as provided in Section 10.06, no Guarantor may consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person) another Person, unless:





     (1) either:




     (a) such Guarantor shall be the surviving or continuing Person; or




     (b) the Person (if other than such Guarantor) formed by or surviving any such
consolidation or merger is another Guarantor or assumes, by agreements in form and
substance reasonably satisfactory to the Trustee, all of the obligations of such
Guarantor under the Note Guarantee of such Guarantor, this Indenture, the Security
Documents and the Registration Rights Agreement; and




     (2) immediately after giving effect to such transaction, no Default shall have occurred
and be continuing.



          (d) For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a
single transaction or series of transactions) of all or substantially all of the properties or
assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or
substantially all of the properties and assets of the Issuer, will be deemed to be the transfer of
all or substantially all of the properties and assets of the Issuer.




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Section 5.02. Successor Person Substituted.




          (a) Upon any consolidation, combination or merger of the Issuer or a Guarantor, or any
transfer of all or substantially all of the assets of the Issuer in accordance with Section 5.01,
in which the Issuer or such Guarantor is not the continuing obligor under the Notes or its Note
Guarantee, the surviving entity formed by such consolidation or into which the Issuer or such
Guarantor is merged or the Person to which the sale, conveyance, lease, transfer, disposition or
assignment is made shall succeed to, and be substituted for, and may exercise every right and power
of, the Issuer or such Guarantor under this Indenture, the Security Documents, the Notes and the
Note Guarantees with the same effect as if such surviving entity had been named therein as the
Issuer or such Guarantor and, except in the case of a lease, the Issuer or such Guarantor, as the
case may be, shall be released from the obligation to pay the principal of and interest on the
Notes or in respect of its Note Guarantee, as the case may be, and all of the Issuer’s or such
Guarantor’s other obligations and covenants under the Notes, this Indenture, the Security Documents
and its Note Guarantee, if applicable.




          (b) Notwithstanding the foregoing, (i) any Restricted Subsidiary may consolidate with, merge
with or into or convey, transfer or lease, in one transaction or a series of transactions, all or
substantially all of its assets to the Issuer or another Restricted Subsidiary and (ii) this
Article 5 will not apply to a merger of the Issuer with an Affiliate of the Issuer solely for the
purpose of reorganizing the Issuer in another jurisdiction.




ARTICLE 6




DEFAULTS AND REMEDIES




Section 6.01. Events of Default.




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




          (a) the failure to pay interest on, or Liquidated Damages with respect to, any of the Notes
when the same becomes due and payable and the continuance of any such failure for 30 days;




          (b) the failure to pay the principal on any of Notes, when such principal becomes due and
payable, at the Maturity Date, upon redemption, upon purchase, upon acceleration or otherwise;




          (c) failure by the Issuer to comply with Article 5 or in respect of its obligations to make a
Change of Control Offer pursuant to Section 4.15;




          (d) failure by the Issuer or any Guarantor to comply with any other agreement or covenant in
this Indenture or the Security Documents and continuance of this failure for 60 days after notice
of the failure has been given to the Issuer by the Trustee or by the Holders of at least 25% of the
aggregate principal amount of the Notes then outstanding;




          (e) default under any mortgage, indenture or other instrument or agreement under which there
may be issued or by which there may be secured or evidenced Indebtedness for borrowed money by the
Issuer or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the
Issue Date, which default (A) is caused by a failure to pay at final maturity principal on such
Indebtedness within the applicable express grace period and any extensions thereof (a “payment
default”) or (B) results in the acceleration of such Indebtedness prior to its express final
maturity (which acceleration



63









 






is not rescinded, annulled or otherwise cured within 30 days of receipt by the Issuer or such
Restricted Subsidiary of notice of any such acceleration), and, in each case, the principal amount
of such Indebtedness, together with the principal amount of any other Indebtedness with respect to
which an event described in clause (A) or (B) has occurred and is continuing, aggregates $20.0
million or more;




          (f) one or more judgments (to the extent not covered by insurance) for the payment of money in
an aggregate amount in excess of $20.0 million shall be rendered against the Issuer, any of its
Restricted Subsidiaries or any combination thereof and the same shall remain undischarged for a
period of 60 consecutive days during which execution shall not be effectively stayed;




          (g) the Issuer or any of its Significant Subsidiaries pursuant to or within the meaning of any
Bankruptcy Law:





     (A) commences a voluntary case,




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




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




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




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




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



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





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




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




     (C) orders the liquidation of the Issuer, or any of its Significant
Subsidiaries;



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




          (j) any Security Document or any Lien purported to be created or granted thereby on any one or
more items of Collateral is held in any judicial proceeding to be unenforceable or invalid, in
whole or part, or ceases for any reason (other than pursuant to a release that is delivered or
becomes effective as set forth in this Indenture or any Security Document) to be fully enforceable
and perfected.




64









 








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




Section 6.02. Acceleration.




          If an Event of Default (other than an Event of Default specified in Section 6.01(g) or (h)
with respect to the Issuer) shall have occurred and be continuing under this Indenture, the
Trustee, by written notice to the Issuer, or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding by written notice to the Issuer and the Trustee, may declare
(an “acceleration declaration”) all amounts owing under the Notes to be due and payable. (The
Trustee agrees to provide a copy of such notice to such other Persons as may be required by the
Security Documents.) Upon such declaration of acceleration, the aggregate principal of and accrued
and unpaid interest on the outstanding Notes shall become due and payable immediately without
further action or notice, and the Trustee shall immediately become unconditionally entitled to
foreclose upon any or all of the Collateral, and exercise and enforce its other rights and remedies
in respect of the Collateral, subject to the provisions of this Indenture and the Security
Documents, as applicable; provided, however, that after such acceleration, but before a judgment or
decree based on acceleration, the Holders of a majority in aggregate principal amount of such
outstanding Notes may rescind and annul such acceleration if:





     (1) the rescission would not conflict with any judgment or decree;




     (2) all Events of Default, other than nonpayment of principal or interest that has
become due solely because of the acceleration, have been cured or waived;




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




     (4) the Issuer has paid all sums paid or advanced by the Trustee hereunder and its
reasonable compensation and reimbursed the Trustee for its expenses, disbursements and
advances and those of its agents and counsel; and




     (5) in the event of the cure or waiver of an Event of Default of the type described in
Section 6.01(g) or (h) above, the Trustee shall have received an Officers’ Certificate and
an Opinion of Counsel that such Event of Default has been cured or waived.


No such rescission shall affect any subsequent Default or impair any right consequent thereto. If
an Event of Default specified in Section 6.01(g) or (h) occurs with respect to the Issuer and is
continuing, then all unpaid principal of, premium, if any, and accrued and unpaid interest on all
of the outstanding Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.




Section 6.03. Other Remedies.




          If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
by proceeding at law or in equity to collect the payment of principal of, or premium, if any, and
interest on the Notes or to enforce the performance of any provision of the Notes, this Indenture,
or the



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Security Documents and may take any necessary action requested of it as Trustee to settle,
compromise, adjust or otherwise conclude any proceedings to which it is a party.




          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 to the extent permitted by law.




Section 6.04. Waiver of Past Defaults and Events of Default.




          Subject to Sections 2.09, 6.02, 6.07 and 8.02 hereof, the Holders of a majority in aggregate
principal amount of the Notes then outstanding have the right to waive past Defaults under this
Indenture except a Default or Event of Default in the payment of the principal of, or interest or
Liquidated Damages, if any, on any Note as specified in clauses (a) and (b) of Section 6.01 or in
respect of a covenant or a provision which cannot be modified or amended without the consent of all
Holders as provided for in Section 8.02. The Issuer shall deliver to the Trustee an Officers’
Certificate stating that the requisite percentage of Holders have consented to such waiver. In case
of any such waiver, the Issuer, 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 shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA
is hereby expressly excluded from this Indenture and the Notes, as permitted by the TIA.




          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 thereto.




Section 6.05. Control by Majority.




          Subject to Section 2.09 hereof, the Holders of a majority in aggregate principal amount of the
outstanding Notes have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or power conferred on
the Trustee by this Indenture. The Trustee, however, may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines may be unduly prejudicial to
the rights of another Holder not taking part in such direction, and the Trustee shall have the
right to decline to follow any such direction if the Trustee, being advised by counsel, determines
that the action so directed may not lawfully be taken or if the Trustee in good faith shall, by a
Trust Officer, determine that the proceedings so directed may involve it in personal liability;
provided that the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. In the event the Trustee takes any action or follows any
direction pursuant to this Indenture, the Trustee shall be entitled to indemnification reasonably
satisfactory to it against any loss or expense caused by taking such action or following such
direction. This Section 6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such Section
316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.




Section 6.06. Limitation on Suits.




          (a) Subject to Section 6.07 below, no Holder shall have any right to institute any proceeding
with respect to this Indenture or any remedy thereunder unless:




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     (1) such Holder has given the Trustee written notice of a continuing Event of Default;




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




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




     (4) the Trustee fails to institute such proceeding within 60 days after receipt of the
request and the offer of indemnity; and




     (5) the Trustee has not received directions inconsistent with such written request
during such 60-day period by the Holders of a majority in aggregate principal amount of the
outstanding Notes.



          (b) However, such limitations do not apply to the right of any Holder of a Note to receive
payment of the principal of, premium or Liquidated Damages, if any, or interest on, such Note or to
bring suit for the enforcement of any such payment, on or after the due date expressed in the
Notes, which right will not be impaired or affected without the consent of the Holder.




          (c) Upon any Officer of the Issuer becoming aware of any Default, the Issuer shall deliver to
the Trustee a statement specifying such Default and what action the Issuer is taking or proposes to
take with respect thereto.




Section 6.07. Rights of Holders To Receive Payment.




          Notwithstanding any other provision of this Indenture, the right of any Holder to receive
payment of principal of, or Liquidated Damages, if any, or accrued interest of any Note held by
such Holder on or after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.




Section 6.08. Collection Suit by Trustee.




          If an Event of Default occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Issuer for the whole amount of unpaid
principal, premium and accrued interest remaining unpaid, together with, to the extent that payment
of such interest is lawful, interest on overdue principal and interest on overdue installments of
interest, in each case at the rate set forth in Section 4.01 hereof, and such further amounts as
shall be sufficient to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.




Section 6.09. Trustee May File Proofs of Claim.




          The Trustee may file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the
Notes),



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its creditors or its property and shall be entitled and empowered to collect and receive any
monies or other property payable or deliverable on any such claims and to distribute the same after
deduction of its charges and expenses to the extent that any such charges and expenses are not paid
out of the estate in any such proceedings and any custodian in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof.




          Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan or reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceedings.




Section 6.10. Priorities.




          Any money collected by the Trustee pursuant to this Article and any other money or property
distributable in respect of the Issuer’s obligations under this Indenture after an Event of Default
shall be applied in the following order:





     FIRST: to the Trustee (including any predecessor Trustee) for amounts due under
Section 7.07 hereof, including payment of all compensation, expenses and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of collection;




     SECOND: if the Holders are forced to proceed against the Issuer or any Guarantor
directly without the Trustee, to Holders for their collection costs;




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




     FOURTH: to the Issuer or, to the extent the Trustee collects any amounts from any
Guarantor, to such Guarantor.



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




Section 6.11. Undertaking for Costs.




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




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ARTICLE 7




TRUSTEE




Section 7.01. Duties of Trustee.




          (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture and use the same degree of care and skill in
their exercise thereof 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 need perform only those duties as are specifically set forth in this
Indenture and no covenants or obligations shall be implied in this Indenture against the
Trustee.




     (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and opinions which are
specifically required to be delivered to the Trustee by any provision of this Indenture to
determine whether or not they conform to the requirements of this Indenture.



          (c) Notwithstanding anything to the contrary herein contained, the Trustee may not be relieved
from liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:





     (1) This paragraph does not limit the effect of paragraphs (b) or (d) of this Section
7.01.




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




     (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
hereof.



          (d) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.




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




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




          (g) Unless otherwise specifically provided in this Indenture, any demand, request, direction,
order or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer.




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          (h) 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, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee makes such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Issuer, personally or by agent
or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of
any kind by reason of such inquiry or investigation.




          (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 permissive right of the Trustee to take or refrain from taking any actions enumerated
in this Indenture shall not be construed as a duty.




Section 7.02. Rights of Trustee.




          Subject to Section 7.01 hereof:




          (a) The Trustee may conclusively rely on any document reasonably 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 with respect to any matters contemplated
by this Indenture or the Notes it may consult with counsel and may require an Officers’ Certificate
or an Opinion of Counsel, or both, which shall conform to the provisions of Section 11.05 hereof.
The Trustee shall be protected and shall not be liable for any action it takes or omits to take in
good faith in reliance on such certificate or opinion. The Trustee may also consult with counsel on
any matter relating to this Indenture, the Security Documents or the Notes, and the Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance on the advice of
counsel.




          (c) The Trustee may act through attorneys and agents and shall not be responsible for the
misconduct or negligence of any attorney or agent (other than an agent who is an employee of the
Trustee) so long as the appointment of such agent was made with due care.




          (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
which it reasonably believes to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture.




          (e) The Trustee may consult with counsel of its selection, and the advice or opinion of such
counsel as to matters of law shall be full and complete authorization and protection from liability
in respect of any action taken, omitted or suffered by it hereunder in good faith and in reliance
thereon.




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




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          (g) The Trustee may request that the Issuer 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 an Officers’ Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded.




          (h) The Trustee shall not be responsible or liable for any failure or delay in the
performance of its obligations under this Indenture arising out of or caused, directly or
indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of
God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage;
epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software)
or communication services; accidents; labor disputes; acts of civil or military authority and
governmental action.




          (i) Anything in this Indenture notwithstanding, in no event shall the Trustee be liable for
special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but
not limited to loss of profit), even if the Issuer has been advised as to the likelihood of such
loss or damage and regardless of the form of action.




Section 7.03. Individual Rights of Trustee.




          The Trustee in its individual or any other capacity may become the owner or pledgee of Notes
and may make loans to, accept deposits from, perform services for or otherwise deal with the
Issuer, or any Affiliates thereof, with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, shall be subject to Sections 7.10
and 7.11 hereof.




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 Issuer’s use of the
proceeds from the sale of Notes or any money paid to the Issuer pursuant to the terms of this
Indenture and it shall not be responsible for any statement of the Issuer in this Indenture, the
Security Documents or the Notes other than the Trustee’s certificate of authentication.




Section 7.05. Notice of Defaults.




          The Trustee shall not be deemed to have notice of any Default or Event of Default unless a
Trust Officer of the Trustee has received written notice of such Default or Event of Default at the
Corporate Trust Office of the Trustee.




          Within 90 days after the occurrence of any Default or Event of Default hereunder, the Trustee
shall transmit by mail to Holders of Notes, as their names and addresses appear in the Registrar, a
notice of the Default or Event of Default known to the Trustee, unless such Default or Event of
Default shall have been cured or waived. Except in the case of an Event of Default in payment of
principal of, premium or interest on, any Note, including an accelerated payment and the failure to
make payment on the Change of Control Payment Date pursuant to a Change of Control Offer or on the
Offer Payment Date pursuant to a Net Proceeds Offer or Collateral Proceeds Offer, the Trustee may
withhold the notice if and



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so long as its Board of Directors, the executive committee of its Board of Directors or a
committee of its directors and/or Trust Officers in good faith determines that withholding the
notice is in the interest of the Holders. This Section 7.05 shall be in lieu of the proviso to
Section 315(b) of the TIA, and such proviso of Section 315(b) of the TIA is hereby expressly
excluded from this Indenture and the Notes, as permitted by the TIA.




Section 7.06. Reports by Trustee to Holders.




          If required by TIA Section 313(a), within 60 days after May 15 of any year, commencing the
first May 15 following the date of this Indenture, the Trustee shall mail to each Holder a brief
report dated as of such May 15 that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Section 313(b), (c) and (d).




          Reports pursuant to this Section 7.06 shall be transmitted by mail:




          (a) to all registered Holders, as the names and addresses of such Holders appear on the
Registrar’s books; and




          (b) to such Holder as have, within the two years preceding such transmission, filed their
names and addresses with the Trustee for that purpose.




          A copy of each report at the time of its mailing to Holders shall be filed with the Commission
and each stock exchange, if any, on which the Notes are listed. The Issuer shall promptly notify
the Trustee when the Notes are listed on any stock exchange or of any delisting thereof.




Section 7.07. Compensation and Indemnity.




          The Issuer shall pay to the Trustee from time to time such compensation as shall be agreed in
writing between the Issuer and the Trustee for the Trustee’s services. The Trustee’s compensation
shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall
reimburse the Trustee upon request for all reasonable fees and expenses, including out-of-pocket
expenses incurred or made by it in connection with the performance of its duties under this
Indenture or in connection with the collection of any funds. Such expenses shall include the
reasonable fees and expenses of the Trustee’s agents and counsel.




          The Issuer shall indemnify each of the Trustee and its agents, employees, stockholders and
directors and officers for, and hold them harmless against, any loss, liability or expense incurred
by them (including attorney’s fees and expenses) arising out of or in connection with the
administration of this trust including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or performance of any of their
rights, powers or duties hereunder, except for such actions to the extent caused by any negligence,
bad faith or willful misconduct on their part. The Trustee shall notify the Issuer promptly, in
writing, of any claim asserted against the Trustee for which it may seek indemnity. At the
Trustee’s sole discretion, the Issuer shall defend the claim and the Trustee shall cooperate and
may participate in the defense; provided that any settlement of a claim shall be approved in
writing by the Trustee. The Issuer need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Issuer need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by the Trustee through
its negligence, bad faith or willful misconduct.





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          To secure the Issuer’s payment obligations in this Section 7.07, the Trustee shall have a lien
prior to the Notes on all assets or money held or collected by the Trustee, in its capacity as
Trustee, except assets or money held in trust to pay principal of, premium or interest on
particular Notes.



          In addition and without prejudice to the rights provided to the Trustee under any provision of
this Indenture, when the Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.01(f) or (g) hereof occurs, such expenses and the compensation for such
services are intended to constitute expenses of administration under any Bankruptcy Law.



          The obligation of the Issuer under this Section 7.07 shall survive the resignation or removal
of the Trustee and the termination or satisfaction and discharge of this Indenture.



          “Trustee” for purposes of this Section shall include any predecessor Trustee and the Trustee
in each of its capacities hereunder and to each agent, custodian and other person employed to act
hereunder; provided, however, that the negligence, willful misconduct or bad faith of any Trustee
hereunder shall not affect the rights of any other Trustee hereunder.


Section 7.08. Replacement of Trustee.




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




	 	(a)	 	the Trustee fails to comply with Section 7.10 hereof;
	 
	 	(b)	 	the Trustee is adjudged a bankrupt or an insolvent;
	 
	 	(c)	 	a receiver or other public officer takes charge of the Trustee or its property; or
	 
	 	(d)	 	the Trustee otherwise becomes incapable of acting.





          If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer
shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the Notes may appoint a successor Trustee
to replace the successor Trustee appointed by the Issuer.



          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuer. Immediately after that, the retiring Trustee shall transfer, after
payment of all sums then owing to the Trustee pursuant to Section 7.07 hereof, all property held by
it as Trustee to the successor Trustee, subject to the lien provided in Section 7.07 hereof, the
resignation or removal of the retiring Trustee shall become effective, and the successor Trustee
shall have the rights, powers and duties of the Trustee under this Indenture. A successor Trustee
shall mail notice of its succession to each Holder.



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



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          If the Trustee, after written request by any Holder who has been a bona fide holder of
securities for any period of time specified under TIA Section 310(b), fails to comply with Section
7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.



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


Section 7.09. Successor Trustee by Consolidation, Merger or Conversion.




          If the Trustee consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, subject to this Article 7, the
successor corporation without any further act shall be the successor Trustee.


Section 7.10. Eligibility; Disqualification.




          This Indenture shall always have a Trustee which shall be eligible to act as Trustee under TIA
Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall have a combined capital and surplus
of at least $100,000,000 as set forth in its most recent published annual report of condition. If
the Trustee has or shall acquire any “conflicting interest” within the meaning of TIA Section
310(b), the Trustee and the Issuer shall comply with the provisions of TIA Section 310(b);
provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest or participation
in other securities of the Issuer are outstanding if the requirements for such exclusion set forth
in TIA Section 310(b)(1) are met. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.10, the Trustee shall resign immediately in the
manner and with the effect hereinbefore specified in this Article 7.


Section 7.11. Preferential Collection of Claims Against the Issuer.




          The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed
in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section
311(a) to the extent indicated therein. The provisions of TIA Section 311 shall apply to the
Issuer and the Guarantors as obligors upon the Notes.



ARTICLE 8




AMENDMENTS, SUPPLEMENTS AND WAIVERS



Section 8.01. Without Consent of Holders.





          The Issuer and the Guarantors, when authorized by a Board Resolution, and the Trustee may
amend or supplement this Indenture, the Security Documents, the Notes or the Note Guarantees
without notice to or consent of any Holder:



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



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



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     (3) to provide for the assumption of the Issuer’s or a Guarantor’s obligations to the
Holders in the case of a merger, consolidation or sale of all or substantially all of the
Issuer’s or such Guarantor’s assets in accordance with Article 5;



     (4) to add any Note Guarantee or to effect the release of any Guarantor from any of its
obligations under its Note Guarantee or this Indenture (to the extent permitted by this
Indenture);



     (5) to make any change that would provide any additional rights or benefits to the
Holders or does not materially adversely affect the rights of any Holder;



     (6) to effect or maintain the qualification of this Indenture under the Trust Indenture
Act;



     (7) to add Collateral for or further secure the Notes or any Note Guarantees or any
other obligation under this Indenture;



     (8) to evidence and provide for the acceptance of appointment by a successor trustee;



     (9) to conform the text of this Indenture, the Security Documents or the Notes to any
provision of the Description of the Notes section of the Offering Circular to the extent
that such provision in the Description of the Notes was intended to be a verbatim recitation
of a provision of this Indenture, the Security Documents the Note Guarantees or the Notes;



     (10) to provide for the issuance of Additional Notes in accordance with this Indenture;
or



     (11) with respect to the Security Documents, to effect the release of Collateral in
accordance with the terms thereof and this Indenture, or as otherwise provided therein or in
this Indenture.


Section 8.02. With Consent of Holders.




          (a) Subject to Section 6.07 hereof, the Issuer and the Guarantors, when each is authorized by
a Board Resolution of their respective Boards of Directors, and the Trustee may amend or supplement
this Indenture, Security Documents, the Notes or the Note Guarantees with the consent (which may
include consents obtained in connection with a tender offer or exchange offer for the Notes) of the Holders of at least
a majority in principal amount of the outstanding Notes. Subject to Sections 6.04 and 6.07 hereof,
the Holders of a majority in principal amount of the outstanding Notes may waive past Defaults and
compliance by the Issuer or any Guarantor with any provision of this Indenture, the Security
Documents, the Notes, or the Note Guarantees. However, without the consent of each Holder affected,
an amendment, supplement or waiver, including a waiver pursuant to Section 6.04 hereof, may not:




     (1) reduce, or change the maturity of, the principal of any Note;



     (2) reduce the rate of or extend the time for payment of interest on any Note;



     (3) reduce any premium payable upon optional redemption of the Notes or change the date
on which any Notes are subject to optional redemption or waive any payment with re-




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spect to
the optional redemption of the Notes or modify any obligation of the Issuer under Section
4.15;










	 	(4)	 	make any Note payable in money or currency other than that stated in the Notes;
	 
	 	(5)	 	modify or change any provision of this Indenture or the related definitions to
affect the ranking of the Notes or any Note Guarantee in a manner that adversely affects the
Holders;
	 
	 	(6)	 	reduce the percentage of Holders necessary to consent to an amendment or waiver to
this Indenture or the Notes;
	 
	 	(7)	 	waive a default in the payment of principal of or premium or interest or Liquidated
Damages, if any, on any Notes (except a rescission of acceleration of the Notes by the
Holders thereof as provided in this Indenture and a waiver of the payment default that
resulted from such acceleration);
	 
	 	(8)	 	impair the rights of Holders to receive payments of principal of or interest or
Liquidated Damages, if any, on the Notes on or after the due date therefor or to institute
suit for the enforcement of any payment on the Notes;
	 
	 	(9)	 	release any Guarantor that is a Significant Subsidiary from any of its obligations
under its Note Guarantee or this Indenture, except as permitted by this Indenture;
	 
	 	(10)	 	except as expressly provided in this Indenture or any Security Document, release
all or substantially all of the Liens on the Collateral; or
	 
	 	(11)	 	make any change in these amendment, supplement and waiver provisions.





          The consent of the Holders of the Notes is not necessary under this Indenture to approve the
particular form of any proposed amendment, supplement or waiver. It is sufficient if such consent
approves the substance of the proposed amendment, supplement or waiver.



          After an amendment or supplement under this Section 8.02 becomes effective, the Issuer
shall mail to Holders of the Notes a notice briefly describing such amendment or supplement.
However, the failure to give such notice to all Holders of the Notes, or any defect therein, will
not impair or affect the validity of the amendment or supplement.


Section 8.03. Compliance with TIA.




          Every amendment to or supplement of this Indenture, the Notes or the Note Guarantees shall
comply with the TIA as then in effect.


Section 8.04. Revocation and Effect of Consents.




          Until an amendment, waiver or supplement becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not
made on any Note. Subject to the following paragraph, any such Holder or subsequent Holder may
revoke the consent as to such Holder’s Note or portion of such Note by notice to the Trustee or the
Issuer received



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before the date on which the Trustee receives an Officers’ Certificate certifying
that the Holders of the requisite principal amount of Notes have consented (and not theretofore
revoked such consent) to the amendment, supplement or waiver.




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



          After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless
it makes a change described in any of clauses (1) through (11) of Section 8.02 hereof, in which
case, the amendment, supplement or waiver shall bind only each Holder who has consented to it and
every subsequent Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note.


Section 8.05. Notation on or Exchange of Notes.




          If an amendment, supplement, or waiver changes the terms of a Note, the Trustee may request
the Holder to deliver it to the Trustee. In such case, the Trustee shall place an appropriate
notation on the Note about the changed terms and return it to the Holder. Alternatively, if the
Issuer or the Trustee so determines, in exchange for the Note the Issuer shall issue and the
Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the
appropriate notation or issue a new Note shall not affect the validity and effect of such amendment
supplement or waiver.


Section 8.06. Trustee To Sign Amendments, etc.




          The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized
pursuant to this Article 8 is authorized or permitted by this Indenture and that such amendment,
supplement or waiver constitutes the legal, valid and binding obligation of the Issuer and any
Guarantors, enforceable in accordance with its terms (subject to customary exceptions). The Trustee
may, but shall not be obligated to, execute any such amendment, supplement or waiver which affects
the Trustee’s own rights, duties or immunities under this Indenture or otherwise.



ARTICLE 9




DISCHARGE OF INDENTURE; DEFEASANCE



Section 9.01. Satisfaction and Discharge of Indenture.





          (a) This Indenture shall be discharged and shall cease to be of further effect (except those
obligations referred to in Section 9.01(c)) as to all outstanding Notes and the Trustee, on written
demand of and at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:




          (1) all the Notes that have been authenticated and delivered (except lost, stolen or
destroyed Notes which have been replaced or paid and Notes for whose payment money has been



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deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from this trust) have been delivered to the Trustee for cancellation, or




     (2) (a) all Notes not delivered to the Trustee for cancellation otherwise (i) have
become due and payable, (ii) will become due and payable, or may be called for redemption,
within one year or (iii) have been called for redemption pursuant to paragraph 5 of the
Notes and, in any case, the Issuer has irrevocably deposited or caused to be deposited with
the Trustee as trust funds, in trust solely for the benefit of the Holders, U.S. legal
tender, U.S. Government Obligations 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 (including all principal and accrued interest and Liquidated Damages, if
any) on the Notes not theretofore delivered to the Trustee for cancellation, (b) the Issuer
has paid all other sums payable by it under this Indenture, and (c) the Issuer has delivered
irrevocable instructions to the Trustee to apply the deposited money toward the payment of
the Notes at maturity or on the date of redemption, as the case may
be.



          (b) In addition, the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel
stating that all conditions precedent to satisfaction and discharge
have been complied with.



          (c) Notwithstanding Section 9.01(a), the Issuer’s obligations in Article 2 and Sections 4.01,
4.07, 7.07, 9.06 and 9.07 hereof shall survive until the Notes are no longer outstanding pursuant
to the last paragraph of Section 2.08 hereof. After the Notes are no longer outstanding, the
Issuer’s obligations in Sections 7.07, 9.06 and 9.07 hereof
shall survive.



          (d) After such delivery or irrevocable deposit, the Trustee upon request shall acknowledge in
writing the discharge of the Issuer’s and each Guarantor’s obligations under the Notes, the Note
Guarantees and this Indenture except for those surviving obligations
specified above.



          (e)
The Issuer shall provide notice of discharge or defeasance pursuant to this Article 9
within ten (10) days after deposit of funds or U.S. Government Obligations. If payment at stated
maturity of less than all of the Notes of any series is to be provided for in the manner and with
the effect provided in this Section 9.01, the Trustee shall select such Notes, or portions or
principal amount thereof, in the manner specified by Section 3.02 for selection for redemption of
less than all the Notes of a series.



Section 9.02. Legal Defeasance.




          (a)
The Issuer may, at its option at any time, elect to have this section be applied to all
outstanding Notes upon compliance with the conditions set forth in Section 9.04.


          (b) Upon the Issuer’s exercise under paragraph (a) hereof of the option applicable to this
paragraph (b), the Issuer and each Guarantor shall, subject to the satisfaction of the conditions
set forth in Section 9.04 hereof, be deemed to have been discharged from their respective
obligations with respect to all outstanding Notes and the Note Guarantees on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this
purpose, Legal Defeasance means that the Issuer and each Guarantor shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes and the Note Guarantees,
which shall thereafter be deemed to be “outstanding” only for the purposes of Section 9.05 hereof
and the other Sections of this Indenture referred to in (i) and (ii) below, and to have satisfied
all their other respective obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper
instruments acknowledg-






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ing the same), except for the following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to receive solely from the
trust fund described in Section 9.05 hereof, and as more fully set forth in such Section, payments
in respect of the principal of, Liquidated Damages, if any, and interest on such Notes when such
payments are due from such trust fund, (ii) the Issuer’s obligations with respect to such Notes
under Article 2 and Section 4.07 hereof, (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Issuer’s obligations in connection therewith and (iv) this Article 9. Subject to compliance with this Article 9, the Issuer may exercise its option
under this Section 9.02 notwithstanding the prior exercise of its option under Section 9.03 below
with respect to the Notes.



Section 9.03. Covenant Defeasance.




          (a) The Issuer may, at its option by Board Resolution of the Board of Directors of the Issuer,
at any time, elect to have this Section be applied to all outstanding Notes upon compliance with
the conditions set forth in Section 9.04.


          (b) Upon the Issuer’s exercise under paragraph (a) hereof of the option applicable to this
paragraph (b), the Issuer and each Guarantor shall, subject to the satisfaction of the conditions
set forth in Section 9.04 hereof, be released from their respective obligations under the covenants
contained in Sections 4.05 and 4.08 through 4.21 hereof, inclusive, and subclause (3) of Section
5.01(a) hereof with respect to the outstanding Notes and the Note Guarantees on and after the date
the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”);
provided, however, that Covenant Defeasance will not be effective until such time as Events of
Default contained in Section 6.01(g) and (h) no longer apply, and the Notes and the Note Guarantees
shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder. For
this purpose, such Covenant Defeasance means that, with respect to the outstanding Notes and the
Note Guarantees, the Issuer and each Guarantor may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event or Default under Section 6.01(d)
hereof, but, except as specified above, the remainder of this Indenture, and such Notes and the
Note Guarantees shall be unaffected thereby. In addition, upon the Issuer’s exercise under
paragraph (a) hereof of the option applicable to this paragraph (b), subject to the satisfaction of
the conditions set forth in Section 9.04 hereof, the Events of Default described under clauses (c)
through (f), (i) and (j) of Section 6.01 and the Events of Default described under clauses (g) and
(h) of Section 6.01 (but only with respect to Significant Subsidiaries of the Issuer), in each
case, will no longer constitute an Event of Default.


Section 9.04. Conditions to Legal Defeasance or Covenant Defeasance.




          The following shall be the conditions to the application of either Section 9.02 or 9.03 hereof
to the outstanding Notes and the Note Guarantees:



     (1)
the Issuer must irrevocably deposit with the Trustee (or other qualifying trustee),as trust funds, in trust solely for the benefit of the Holders, cash in U.S. dollars or U.S.
Government Obligations, or a combination thereof, in such amounts as will be sufficient
(without consideration of any reinvestment of interest), in the opinion of a nationally
recognized investment bank, appraisal firm or firms of independent public accountants
selected by the Issuer, to pay the







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principal of, Liquidated Damages, if any, and interest on
the Notes on the scheduled due dates or on the applicable Redemption Date, as the case may
be, provided that the Trustee shall have received an irrevocable written order from the
Issuer instructing the Trustee to apply such U.S. dollars or the proceeds of such U.S.
Government Obligations to said payments with respect to such Notes;




     (2) in the case of an election under Section 9.02 hereof, the Issuer shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (A) the Issuer has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a
change in the applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such deposit, Legal
Defeasance and discharge and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such Legal Defeasance
had not occurred;



     (3) in the case of an election under Section 9.03 hereof, the Issuer shall have
delivered to the Trustee an Opinion of Counsel confirming that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of such deposit,
Covenant Defeasance and discharge and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;



     (4) no Default shall have occurred and be continuing on the date of such deposit or
insofar as Sections 6.01(g) and 6.01(h) hereof are concerned, at any time in the period
ending on the 91st day after the date of such deposit (other than a Default resulting from
the borrowing of funds to be applied to such deposit and the grant of any Lien securing such
Indebtedness);



     (5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of or constitute a default under this Indenture or any other material agreement or
instrument to which the Issuer or any of its Subsidiaries is a party or by which the Issuer
or any of its Subsidiaries is bound (other than any such Default or default resulting solely
from the borrowing of funds to be applied to such deposit and the grant of any Lien to
secure such borrowings);



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



     (7) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that the conditions precedent provided for in, in the case
of the Officers’ Certificate, clauses (1) through (6) and, in the case of the Opinion of
Counsel, clauses (2) and/or (3) and (5) of this Section 9.04 have been complied with;



     (8) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect
that after the 91st day following the deposit and assuming that no Holder is an “insider”
with respect to the Issuer, as that term is defined in Section 101 of title 11, United
States Bankruptcy Code (the “Bankruptcy Code”), the cash or securities deposited in
trust will not be subject to avoidance and repayment under Sections 547 and 550 of the
Bankruptcy Code;



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     (9) such Legal Defeasance or Covenant Defeasance shall not cause the Trustee to have a
conflicting interest for purposes of the TIA with respect to any securities of the Issuer;
and




     (10) the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that,
as a result of such Legal Defeasance or Covenant Defeasance, neither the trust nor the
Trustee will be required to register as an investment company under the Investment Company
Act of 1940, as amended.


Section 9.05. Application of Trust Money.




          All money and U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 9.01 or 9.04 hereof in respect of the outstanding Notes shall be held
in trust and applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Notes, of all sums due and to become due thereon in respect of
principal, premium, if any, and accrued interest, but such money need not be segregated from other
funds except to the extent required by law.



          The Issuer and the Guarantors shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to
Section 9.01 or 9.04 hereof or the principal, premium, if any, and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the account of the
Holders.



          Anything in this Article 9 to the contrary notwithstanding, the Trustee shall deliver or pay
to the Issuer from time to time upon a written request of the Issuer in the form of an Officers’
Certificate any money or U.S. Government Obligations held by it as provided in Section 9.01 or 9.04
hereof which, in the opinion of a nationally-recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent satisfaction and
discharge of the Indenture, Legal Defeasance or Covenant Defeasance, as the case may be.


Section 9.06. Repayment to the Issuer.




          Subject to Section 9.05 hereof, the Trustee and the Paying Agent shall promptly pay to the
Issuer upon request any excess U.S. legal tender or U.S. Government Obligations held by them at any
time and thereupon shall be relieved from all liability with respect to such money. Subject to
applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Issuer upon
request any money held by them for the payment of principal, premium, if any, or interest that
remains unclaimed for two years; provided that the Trustee or such Paying Agent, before being
required to make any payment, may at the expense of the Issuer cause to be published once in a
newspaper of general circulation in The City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed, and that after a date specified therein which shall
be at least 30 days from the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Issuer. After payment to the Issuer, Holders entitled
to such money must look to the Issuer for payment as general creditors unless an applicable law
designates another Person.



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Section 9.07. Reinstatement.




          If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in
accordance with Section 9.01, 9.02 or 9.03 hereof by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuer’s and each Guarantor’s obligations under this Indenture,
the Security Documents, the Notes and the Note Guarantees shall be revived and reinstated as though
no deposit had occurred pursuant to this Article 9 until such time as the Trustee or Paying Agent
is permitted to apply all such U.S. legal tender or U.S. Government Obligations in accordance with
Section 9.01 hereof; provided, however, that if the Issuer or the Guarantors have made any payment
of principal of, premium, if any, or accrued interest on any Notes because of the reinstatement of
their obligations, the Issuer and each such Guarantor 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 10




GUARANTEES



Section 10.01. Unconditional Guarantee.




          Each Guarantor hereby unconditionally, jointly and severally, guarantees to each Holder of a
Note authenticated by the Trustee and to the Trustee and its successors and assigns that the
principal of, premium thereon (if any) and interest on the Notes will be promptly paid in full when
due, subject to any applicable grace period, whether at the Maturity Date, by acceleration or
otherwise, and interest on the overdue principal and interest on any overdue interest on the Notes,
if lawful, and all other obligations of the Issuer to the Holders or the Trustee hereunder or under
the Notes will be promptly paid in full or performed, all in accordance with the terms hereof and
thereof; subject, however, to the limitations set forth in Section 10.03 hereof. Each Guarantor
hereby agrees that to the maximum extent permitted under applicable law, its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or
this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder
with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer,
any action to enforce the same or any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a Guarantor. To the maximum extent permitted under applicable
law, each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding
first against the Issuer, protest, notice and all demands whatsoever and covenants that the Note Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes, this Indenture and the Security
Documents. If any Holder or the Trustee is required by any court or otherwise to return to the
Issuer, any Guarantor, or any custodian, trustee, liquidator or other similar official acting in
relation to the Issuer or any Guarantor, any amount paid by the Issuer or any Guarantor to the
Trustee or such Holder, each Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, to the maximum extent
permitted under applicable law, as between a Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purpose of each Note Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as
provided in Article 6 hereof, such obligations (whether or not due and payable) shall become due
and payable by each Guarantor for the purpose of each Note Guarantee.



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              Each Guarantor also agrees to pay any and all costs and expenses (including reasonable
attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Article
10.


Section 10.02. Severability.




              In case any provision of this Article 10 shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.


Section 10.03. Limitation on Guarantor’s Liability.



             
(a) To the extent applicable, a Guarantor’s liability in respect of its Note Guarantee shall
be limited to the extent set forth below:




         (1) Limitations Applicable to U.S. Guarantors. Each Guarantor that is
incorporated, organized or formed, as the case may be, under the laws of the United States,
any State thereof or the District of Columbia (a “U.S. Guarantor”), and by its
acceptance hereof, each Holder and the Trustee, hereby confirm that it is the intention of
all such parties that the Note Guarantee of a U.S. Guarantor does not constitute a
fraudulent transfer or conveyance for purposes of Title 11 of the United States Code, as
amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar U.S. Federal or state or other applicable law. To effectuate the foregoing
intention, each Holder, by its acceptance of a Note, and each U.S. Guarantor hereby
irrevocably agree that the obligations of a U.S. Guarantor under its Note Guarantee shall be
limited to the maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such U.S. Guarantor (including, without limitation, any guarantees under any
Credit Facility) and after giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other Guarantor under
its Note Guarantee or pursuant to its contribution obligations under this Indenture, result
in the obligations of such U.S. Guarantor not constituting such a fraudulent transfer or
conveyance.



        
(2)  Limitations Applicable to Other Guarantors. Each Guarantor that is
incorporated, organized or formed, as the case may be, under the laws of any jurisdiction
other than one set forth in clause (1) above (an “Other Guarantor”), and by its
acceptance hereof, each Holder and the Trustee, hereby confirm that it is the intention of
all such parties that the Note Guarantee of an Other Guarantor does not constitute a
fraudulent transfer or conveyance for purposes of applicable law. To effectuate the
foregoing intention, each Holder, by its acceptance of a Note, and each Other Guarantor
hereby irrevocably agree that the obligations of an Other Guarantor under its Note Guarantee
shall be limited to the maximum amount as will, after giving effect to all other contingent
and fixed liabilities of such Other Guarantor (including, without limitation, any guarantees
under any Credit Facility) and after giving effect to any collections from or payments made
by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor
under its Note Guarantee or pursuant to its contribution obligations under this Indenture,
result in the obligations of such Other Guarantor not constituting such a fraudulent
transfer or conveyance.




             
(b) If following the date of this Indenture and notwithstanding anything in Section 8.02 to
the contrary:



        
(1) (i) there shall be any change in the laws of the United States, any State thereof
or the District of Columbia or (ii) any Restricted Subsidiary incorporated, organized or
formed, as



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the case may be, under the laws of any jurisdiction other than the United States,
any State thereof or the District of Columbia (a “Future Guarantor”) shall be
required to guarantee the Notes pursuant to Section 4.20 hereof and the Issuer shall
reasonably determine that clause (2) with respect to Other Guarantors shall not adequately
address the limitations on the Note Guarantee of such Future Guarantor imposed by applicable
law of the jurisdiction of incorporation, organization or formation, as the case may be, of
any such Future Guarantor; or




     
   (2)   the Issuer shall reasonably determine that it shall be necessary or advisable to
amend the terms of subsection (a) of this Section 10.03 or to add additional provisions
related to the limitations imposed on the Note Guarantee of a Future Guarantor,





then upon the delivery of an Officers’ Certificate and Opinion of Counsel reasonably satisfactory
to the Trustee, the Issuer shall be entitled to amend such clauses or add such additional
provisions (including any related modifications to the form of Note Guarantee attached hereto in
Exhibits A and B), as the case may be, in order for the Note Guarantee of a
Guarantor not to so violate applicable law.





         
    (c) Each Guarantor that makes a payment for distribution under its Note Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based on adjusted net
assets of each Guarantor.



Section 10.04. Successors and Assigns.





          This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall
ensure 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.



Section 10.05. No Waiver.




          Each of the Guarantors agrees that to the maximum extent permitted under applicable law, (a)
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 10 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 and (b) 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 10 at law, in equity, by statute or otherwise.


Section 10.06. Release of Guarantor.




          A Subsidiary Guarantor shall be released from all of its obligations under its Note Guarantee
and its obligations under this Indenture, the Security Documents and the Registration Rights
Agreement:




     
   (1)  in the event of a sale or other disposition of all or substantially all of the
assets of such Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all of the Equity Interests of such Subsidiary Guarantor then held
by the Issuer and the Restricted Subsidiaries; or


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     (2) if such Subsidiary Guarantor is designated as an Unrestricted Subsidiary or
otherwise ceases to be a Restricted Subsidiary, in each case in accordance with the
provisions of this Indenture, upon effectiveness of such designation or when it first ceases
to be a Restricted Subsidiary, respectively






          Upon delivery by the Issuer to the Trustee of an Officers’ Certificate and an Opinion of
Counsel to the effect that one of the foregoing requirements has been satisfied and the conditions
to the release of a Guarantor from its Note Guarantee under this Section 10.06 have been met, the
Trustee shall execute any documents reasonably required in order to evidence the release of such
Guarantor from its obligations under its Note Guarantee.


Section 10.07. Execution of Supplemental Indenture for Future Guarantors.




          Each Subsidiary which is required to become a Guarantor shall, and the Issuer shall cause each
such Subsidiary to, promptly execute and deliver to the Trustee a supplemental indenture
substantially in the form of Exhibit F hereto pursuant to which such Subsidiary shall
become a Guarantor under this Article 10 and shall guarantee the obligations of the Issuer under
the Notes and this Indenture. Concurrently with the execution and delivery of such supplemental
indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel 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, each of such supplemental indenture
and the Note Guarantee of such Guarantor is a legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms.


Section 10.08. Notation of Note Guarantee.




          To evidence the Note Guarantee set forth in this Article 10, each Guarantor hereby agrees that
a notation of such Note Guarantee shall be placed on each Note authenticated and made available for
delivery by the Trustee and that this Note Guarantee shall be executed on behalf of each Guarantor
by the manual or facsimile signature of an Officer of each Guarantor. Each Guarantor hereby agrees
that the Note Guarantee set forth in Section 10.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note Guarantee. If an
Officer of a Guarantor whose signature is on the Note Guarantee no longer holds that office at the
time the Trustee authenticates the Note on which the Note Guarantee is endorsed, the Note Guarantee
shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture
on behalf of each Guarantor.


Section 10.09. Subordination of Subrogation and Other Rights.




          Each Guarantor hereby agrees that any claim against the Issuer that arises from the payment,
performance or enforcement of such Guarantor’s obligations under the Note Guarantee or this
Indenture, including, without limitation, any right of subrogation, shall be subject and
subordinate to, and no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Notes in accordance with the provisions
provided therefor in this Indenture.



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ARTICLE 11




MISCELLANEOUS



Section 11.01. TIA Controls.




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


Section 11.02. Notices.




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




          If to the Issuer or any Guarantor:




     Basic Energy Services, Inc.

     500 W. Illinois, Suite 100

     Midland, TX 79701

     Attention: Chief Financial Officer

     Tel: (432) 620-5500

     Fax: (432) 620-5501





     Basic Energy Services, Inc.

     500 W. Illinois, Suite 100

     Midland, TX 79701

     Telephone: 432-620-5500

     Fax: 432-620-5501

     Attention: Kenneth V. Huseman





          Copy to:




     Andrews Kurth LLP

     600 Travis, Suite 4200

     Houston, TX 77002

     Attention: David C. Buck, Esq.

     Tel: (713) 220-4200

     Fax: (713) 220-4285




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          If to the Trustee:




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

     Corporate Trust Division

     601 Travis, 16th Floor

     Houston, Texas 77002

     Attn:

     Tel:

     Fax:





          The Issuer, any Guarantor or the Trustee by written notice to the others may designate
additional or different addresses for subsequent notices or communications. Any notice or
communication to the Issuer, any Guarantors or the Trustee, shall be deemed to have been given or
made as of the date so delivered if personally delivered; when receipt is acknowledged, if
telecopied; and five (5) calendar days after mailing if sent by registered or certified mail,
postage prepaid (except that a notice of change of address shall not be deemed to have been given
until actually received by the addressee). Notwithstanding the foregoing, the Trustee shall not be
deemed to have been given notice until such notice is actually received.




          Any notice or communication mailed to a Holder shall be mailed to it by first-class mail,
postage prepaid, at his address shown on the register kept by the Registrar.




          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 to a Holder is mailed in
the manner provided above, it shall be deemed duly given, whether or not the addressee receives it.




          In case by reason of the suspension of regular mail service, or by reason of any other cause,
it shall be impossible to mail any notice as required by this Indenture, then such method of
notification as shall be made with the approval of the Trustee shall constitute a sufficient
mailing of such notice.


     Section 11.03. Communications by Holders with Other Holders.




          Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Issuer, the Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).


     Section 11.04. Certificate and Opinion as to Conditions Precedent.




          Upon any request or application by the Issuer or any Guarantor to the Trustee to take any
action under this Indenture, the Issuer or such Guarantor, as the case may be, shall furnish to the
Trustee:



     (1) an Officers’ Certificate (which shall include the statements set forth in Section
11.05 below) 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 (which shall include the statements set forth in Section
11.05 below) stating that, in the opinion of such counsel, all such conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been complied with.



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Section 11.05. Statements Required in Certificate and Opinion.




          Each certificate and opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:




     (1) a statement that the person making such certificate or opinion has read such
covenant or condition and the definitions relating thereto;




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




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




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


Section 11.06. Rules by Trustee and Agents.




          The Trustee may make reasonable rules for action by or at meetings of Holders. The Registrar
and Paying Agent may make reasonable rules for their functions.


Section 11.07. Legal Holidays.




          A “Legal Holiday” is a Saturday, a Sunday, a federally-recognized holiday or a day on which
banking institutions are not required to be open in the State of New York. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening period.


Section 11.08. Governing Law.




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


Section 11.09. No Adverse Interpretation of Other Agreements.




          This Indenture may not be used to interpret another indenture, loan, security or debt
agreement of the Issuer or any Subsidiary thereof (other than a Security Document). No such
indenture, loan, security or debt agreement may be used to interpret this Indenture.


Section 11.10. No Recourse Against Others.




          A director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor
shall not have any liability for any obligations of the Issuer under the Notes, the Security
Documents or this Indenture or of any Guarantor under its Note Guarantee or the Security Documents
or for any claim based on, in respect of, or by reason of such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Notes and the Note Guarantees.



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Section 11.11. Successors.




          All agreements of each of the Issuer and each Guarantor in this Indenture and the Notes shall
bind their respective successors. All agreements of the Trustee, any successor trustee and any
Paying Agents in this Indenture shall bind their respective successors.


Section 11.12. Consent to Jurisdiction; Waiver of Immunities.




          The Issuer and the Guarantors irrevocably consent to the jurisdiction of the competent courts
of the State of New York and the courts of the United States of America located in the Borough of
Manhattan, City and State of New York over any suit, action or proceeding with respect to this
Indenture or the transactions contemplated hereby. The Issuer and the Guarantors waive any
objection that they may have to the venue of any suit, action or proceeding with respect to this
Indenture or the transactions contemplated hereby in the competent courts of the State of New York
or the courts of the United States of America, in each case, located in the Borough of Manhattan,
City and State of New York, or that such suit, action or proceeding brought in the competent courts
of the State of New York or the United States of America, in each case, located in the Borough of
Manhattan, City and State of New York was brought in an inconvenient court and agrees not to plead
or claim the same.


Section 11.13. Multiple Counterparts.




          The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall
be deemed an original, but all of them together represent one and the same agreement.


Section 11.14. Table of Contents, Headings, etc.




          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 to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions hereof.


Section 11.15. Separability.




          Each provision of this Indenture shall be considered separable and if for any reason any
provision which is not essential to the effectuation of the basic purpose of this Indenture or the
Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.


Section 11.16. Waiver of Jury Trial.




          EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS INDENTURE OR THE NOTES.



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ARTICLE 12




COLLATERAL AND SECURITY



Section 12.01. Security Documents.




          In order to secure the due and punctual payment of the principal, premium, if any, and
interest on the Notes, when the same shall be due and payable, whether on an Interest Payment Date,
at the Maturity Date, by acceleration, repurchase, redemption or otherwise, and interest on the
overdue principal of and interest (to the extent permitted by law) on the Notes and performance of
all other Note Obligations under this Indenture, the Notes and the Note Guarantees, the Issuer and
the Guarantors have, on the Issue Date simultaneously with the execution and delivery of this
Indenture, entered into Security Documents granting the Trustee a Lien on the Collateral. Such
Liens shall also be deemed to be created under this Indenture. To the extent that any provision of
this Article 12 is not consistent with or contradicts the Security Agreement, the Security
Agreement will govern.



          Any Person which, after the Issue Date, becomes a Guarantor under this Indenture, shall, upon
becoming a Guarantor under this Indenture, become a party to each applicable Security Document with
respect to the assets or property of such Person that are Collateral. Each Holder, by accepting a
Note, consents and agrees to all of the terms and provisions of the Security Documents, as the same
may be amended from time to time pursuant to the terms of the Security Documents and this
Indenture, and authorizes and directs the Trustee to enter into the Security Documents on its
behalf and on behalf of such Holder and to perform its obligations and exercise its rights
thereunder and in accordance therewith.


Section 12.02. Recording, Registration and Opinions; Trustee’s Disclaimer Regarding
Collateral.




          (a) As required by the provisions of Section 314(b) of the TIA, the Issuer and, if applicable,
the Guarantors shall take or cause to be taken all action required to perfect, maintain, preserve
and protect the Lien on the Collateral granted by the Security Documents (subject only to Permitted
Collateral Liens), including without limitation, arranging for the filing of financing statements,
continuation statements, mortgages and any instruments of further assurance, in such manner and in
such places as may be required by law fully to preserve and protect the rights of the Holders and
the Trustee under this Indenture and the Security Documents to all property now or hereafter at any
time comprising the Collateral. The Issuer shall from time to time promptly pay all financing,
continuation statements and mortgage recording, registration and/or filing fees, charges and taxes
relating to this Indenture and the Security Documents, any amendments thereto and any other
instruments of further assurance required hereunder or pursuant to the Security Documents. The
Trustee shall have no obligation to, nor shall it be responsible for any failure to, so register,
file or record. Promptly after the execution and delivery of this Indenture, the Issuer shall
furnish to the Trustee an Opinion of Counsel that complies with TIA Section 314(b)(1).



          (b) The Issuer shall furnish to the Trustee no later than August 1 of each year, beginning
with 2010, an Opinion of Counsel which complies with Section 314(b)(2) of the TIA.



          (c) Notwithstanding anything to the contrary set forth in this Indenture or in any other
Security Document, the Trustee shall not be responsible for the existence, genuineness or value of
any of the Collateral, or for the creation, validity, perfection, priority or enforceability of the
Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or
omission to act on its



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part hereunder, for the validity or sufficiency of the Collateral or any
agreement or assignment contained therein, for the validity of the title of the Issuer
to the Collateral, for insuring the Collateral or for the payment of taxes, charges,
assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral.



Section 12.03. Possession, Use and Release of Collateral.




          (a) Each Holder, by accepting a Note, consents and agrees to the provisions of the Security
Documents and this Indenture governing the possession, use and release of Collateral. Each Holder,
by accepting a Note, consents and agrees that Collateral may, and, as applicable, shall, be
released or substituted in accordance with the terms of this Indenture and the Security Documents.



          (b) Without limiting the provisions of Section 12.03(a) and subject to the provisions of the
Security Document applicable to such Collateral:




     (1) unless an Event of Default has occurred and is continuing, the Trustee shall
release the Liens created by this Indenture and the Security Documents on any portion of
Collateral subject to a Collateral Disposition (Collateral so released, the “Released
Interest”) upon compliance with the condition that the Issuer deliver to the Trustee the
following:




     (A) a notice from the Issuer requesting the release of the Released Interest:




                    (i) describing the proposed Released Interest;




                    (ii) specifying the Fair Market Value of such Released Interest on a
date within 60 days of such notice;




                    (iii) stating that the consideration received is at least equal to the
Fair Market Value of the Released Interest (if required pursuant to Section
4.12(a)(1));




                    (iv) stating that the release of such Released Interest will not
interfere with the Trustee’s ability to realize the value of the remaining
Collateral and will not impair the maintenance and operation of the
remaining Collateral; and




                    (v) in the event that any assets other than cash or Cash Equivalents
comprise a portion of the consideration received in such Collateral
Disposition, specifically describing such assets;




     (B) an Officers’ Certificate stating that:




                    (i) such Collateral Disposition (a) does not include the disposition of
assets other than the Released Interest and (b) complies with the terms and
conditions of this Indenture with respect to Collateral Dispositions
(including Section 4.12);




                              (ii) all Net Available Proceeds from the Collateral Disposition will be
deposited with the Trustee in an Asset Sale Proceeds Account pursuant to the
provisions of Section 4.12(i);



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                    (iii) there is no Default in effect or continuing on the date thereof
or the date of such Collateral Disposition;




                    (iv) the release of the Collateral will not result in a Default or an
Event of Default; and




                    (v) all conditions precedent in this Indenture and the Security
Documents relating to the release in question have been complied with;




          (C) the Net Available Proceeds and other consideration from the Collateral Disposition
required to be delivered to the Trustee pursuant to this Indenture;




          (D) all documentation necessary or reasonably requested by the Trustee to grant to the
Trustee a perfected first priority security interest (subject only to Permitted Collateral
Liens) in and Lien on all assets (other than Net Available Proceeds) comprising a portion of
the consideration received in such Collateral Disposition, if any; and




          (E) all documentation required by the TIA (including without limitation Section 314(d)
of the TIA) prior to the release of Collateral by the Trustee (whether or not this Indenture
is then required to be qualified under the TIA);




          (2) the Trustee shall release the Liens created by this Indenture and the Security
Documents on all Collateral:




          (A) upon payment in full of all outstanding Notes and all other amounts due hereunder
or upon satisfaction and discharge of this Indenture as provided in Section 9.01;




          (B) upon Legal Defeasance or Covenant Defeasance as set forth in Sections 9.02 and
9.03, as applicable; or




          (C) with the consent of the Holders of all of the Notes then outstanding;


in each case following delivery to the Trustee of an Officers’ Certificate of the Issuer to the
effect that any of the foregoing has occurred;





          (3) unless a Default has occurred and is continuing, the Trustee shall release the
Liens created by this Indenture and the Security Documents on any Collateral held in the
Asset Sale Proceeds Account upon delivery by the Issuer to the Trustee of a notice from the
Issuer requesting the release and:




          (A) an Officers’ Certificate stating that:




               (i) there is no Default or Event of Default in effect or continuing on
the date thereof;




               (ii) the release of such Collateral will not result in a Default or an
Event of Default;




               (iii) either:



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a. such Collateral will be applied for a use permitted by Section
4.12(j) or (l) substantially concurrently with such release; or




b. such Collateral constitutes Excess Collateral Proceeds that have
been offered to but not accepted by Holders of Notes pursuant to a
completed Collateral Proceeds Offer in accordance with Section 4.12;
and




     (iv) all conditions precedent in this Indenture and the Security
Documents relating to the release in question have been complied with; and



          (B) all documentation necessary or reasonably requested by the Trustee to grant to the
Trustee a perfected first priority security interest (subject only to Permitted Collateral
Liens) in and Lien on all Additional Assets acquired with such Collateral; and



          (C) all documentation required by the TIA (including without limitation Section 314(d)
of the TIA) prior to the release of Collateral by the Trustee (whether or not this Indenture
is then required to be qualified under the TIA);



          (4) unless a Default has occurred and is continuing, the Trustee shall release the
Liens created by this Indenture and the Security Documents on any Collateral for which other
assets (the “Substitute Assets”) are to be substituted upon delivery by the Issuer
to the Trustee of a notice from the Issuer requesting the release and:



          (A) an Officers’ Certificate stating that:




          (i) there is no Default or Event of Default in effect or continuing on
the date thereof;




         (ii) the Substitute Assets are of equal or greater value and utility
than the Collateral for which the Substitute Assets are to be substituted;




          (iii) the release of such Collateral will not result in a Default or an
Event of Default; and




          (iv) all conditions precedent in this Indenture and the Security
Documents relating to the release in question have been complied with; and



          (B) all documentation necessary or reasonably requested by the Trustee to grant to the
Trustee a perfected first priority security interest (subject only to Permitted Collateral
Liens) in and Lien on the Substitute Assets; and



          (C) all documentation required by the TIA (including without limitation Section 314(d)
of the TIA) prior to the release of Collateral by the Trustee (whether or not this Indenture
is then required to be qualified under the TIA);



          (5) unless a Default has occurred and is continuing, the Issuer or the applicable
Guarantor will have the right to remain in possession and retain exclusive control of the
Collateral (other than any Collateral deposited in an Asset Sale Proceeds Account), to
freely operate the Collateral and to collect, invest and dispose of any income thereon.



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          (c) The Trustee will execute all documents reasonably requested by the Issuer to confirm the
release from the Lien created by this Indenture and the Security Documents on any Collateral
disposed of or otherwise transferred in accordance with Section 12.03(b).



          (d) Neither the Issuer nor any Guarantor shall transfer any Collateral to any Person other
than to the Issuer, a Guarantor or a Person which will become a Guarantor simultaneously with such
transfer, unless the Liens on such Collateral created under this Indenture and the Security
Documents are released in accordance with the provisions of this Section 12.03 or such transfer has
otherwise been conducted in accordance the provisions of Section 12.03.



          (e) The fair value of Collateral released from the Liens created by this Indenture and the
Security Documents pursuant to the terms of this Section 12.03 shall not be considered in
determining whether the aggregate fair value of the Collateral released from the Liens created by this Indenture and
the Security Documents in any calendar year exceeds the 10% threshold specified in Section
314(d)(1) of the TIA.


Section 12.04. Suits to Protect Collateral.




          Subject to Sections 7.01 and 7.02, the Trustee may, subject to the provisions of the Security
Documents, in its sole discretion and without the consent of the Holders of Notes, on behalf of the
Holders of Notes, and shall at the direction of the Holders of a majority in aggregate principal
amount of the then outstanding Notes, take all actions it deems necessary or appropriate in order
to enforce any of the terms of the Security Documents and collect and receive any and all amounts
payable in respect of the obligations of the Issuer and the Guarantors under this Indenture, the
Notes and the Note Guarantees. Subject to the provisions of the Security Documents, the Trustee
shall have power to institute and to maintain such suits and proceedings as it may deem expedient
to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of
any of the Security Documents or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interests and the interests of the Trustee and the
Holders in the Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other governmental enactment,
rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the Lien and security interest created
by this Indenture and the Security Documents or be prejudicial to the interests of the Holders or
the Trustee).


Section 12.05. Powers Exercisable by Receiver or Trustee.




          In case the Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article 12 and the Security Documents upon the Issuer and
the Guarantors with respect to the release, sale or other disposition of such property may be
exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall
be deemed the equivalent of any similar instrument of the Issuer or a Guarantor or of any Officer
or Officers of the Issuer or a Guarantor required by the provisions of this Article 12.


Section 12.06. Determinations Relating to Collateral.




          In the event (i) the Trustee shall receive any written request from the Issuer or any
Guarantor under any Security Document for consent or approval with respect to any matter or thing
relating to any Collateral or the Issuer’s or any Guarantor’s obligations with respect thereto,
(ii) there shall be required from the Trustee under the provisions of any Security Document any
performance or the delivery



94









 




of any instrument or (iii) a Trust Officer of the Trustee shall become
aware of any nonperformance by the Issuer or any Guarantor of any covenant or any breach of any
representation or warranty of the Issuer or any Guarantor set forth in any Security Document, and,
in the case of clause (i), (ii) or (iii) above, the Trustee’s response or action is not otherwise
specifically contemplated hereunder or under the applicable Security Documents, then, in each such
event, the Trustee shall, within 30 Business Days, advise the Holders, in writing and at the
Issuer’s expense, of the matter or thing as to which consent has been requested or the performance
or instrument required to be delivered or the nonperformance or breach of which the Trustee has
become aware. The Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes pursuant to Section 6.05 shall have the exclusive authority to direct the
Trustee’s response to any of the circumstances contemplated in clauses (i), (ii) and (iii) above.



Section 12.07. Certificates of the Issuer and the Guarantors.




          Whether or not this Indenture is then required to be qualified under the TIA, the Issuer and
the Guarantors shall comply (or cause compliance) with Section 313(b) of the TIA, relating to
reports, and Section 314(d) of the TIA, relating to the release of property from the Lien of this
Indenture and the Security Documents and relating to the substitution therefor of any property to
be subjected to the Lien of this Indenture and the Security Documents. Any certificate or opinion
required by Section 314(d) of the TIA may be made by an Officer of the Issuer or a Guarantor, as
applicable, except in cases where Section 314(d) of the TIA requires that such certificate or
opinion be made by an independent Person, which Person shall be an independent engineer, appraiser
or other expert selected by the Issuer.


Section 12.08. Certificates of the Trustee.




          In the event that the Issuer or any Guarantor wishes to release Collateral in accordance with
this Indenture and the Security Documents and has delivered the certificates and documents required
by this Indenture and the Security Documents, the Trustee shall determine whether it has received
all documentation required by Section 314(d) of the TIA in connection with such release based on
the Opinion of Counsel delivered pursuant to Section 12.02. The Trustee, however, shall have no
duty to confirm the legality or validity of such documents, its sole duty being to certify that it
has received such documentation which on their face conform to Section 314(d) of the TIA.


Section 12.09. Purchase Protected.




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




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



	 	 	 	 	 
	 	Basic Energy Services, Inc.

 	 
	 	By:  	   /s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 	Basic Energy Services GP, LLC 

Basic Energy Services L.P.	 
	 	     By:  	Basic Energy Services GP, LLC,
 	 
	 	 	 its General Partner 	 
	 	Basic ESA, Inc. 

Chaparral Service, Inc. 

Basic Marine Services, Inc. 

First Energy Services Company 

Hennessey Rental Tools, Inc. 

Oilwell Fracturing Services, Inc. 

Wildhorse Services, Inc. 

LeBus Oil Field Service Co. 

Globe Well Service, Inc. 

SCH Disposal, L.L.C. 

JS Acquisition LLC 

JetStar Holdings, Inc. 

Acid Services, LLC 

JetStar Energy Services, Inc. 

Sledge Drilling Corp. 

Permian Plaza, LLC 

Xterra Fishing & Rental Tools Co., 

     as Guarantors

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	Basic
Energy Services LP, LLC, 

     as Guarantor

 	 
	 	By:  	              /s/ Jerry Tufly
 	 
	 	 	Name:  	Jerry Tufly 	 
	 	 	Title:  	President 	 




S-1









 





	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 
	 	The Bank of New York Mellon Trust 

     Company, N.A., 

     as Trustee

 	 
	 	By:  	/s/ Julie Hoffman-Ramos
 	 
	 	 	Name:  	Julie Hoffman-Ramos 	 
	 	 	Title:  	Assistant Treasurer 	 




S-2









 








EXHIBIT
A





CUSIP No.: [                ]






BASIC ENERGY SERVICES, INC.




11.625% SENIOR SECURED NOTE DUE 2014, SERIES A




	 	 	 	 	 
	No.

	 	 	$	 






     BASIC ENERGY SERVICES, INC., a Delaware corporation (the “Issuer,” which term includes any
successor entity), for value received promises to pay to                     or registered assigns,
the principal sum of [                ] DOLLARS on August 1, 2014.



     Interest Payment Dates: February 1 and August 1, commencing February 1, 2010.



     Record Dates: January 15 and July 15.



     Reference is made to the further provisions of this Note contained herein and the Indenture
(as defined), which will for all purposes have the same effect as if set forth at this place.



A-1









 





               IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by
its duly authorized Officers.



	 	 	 	 	 
	 	BASIC ENERGY SERVICES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




A-2









 





Certificate of Authentication




               This is one of the 11.625% Senior Secured Notes due 2014, Series A referred to in the
within-mentioned Indenture.



	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST

     COMPANY, N.A.

     as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 



Dated:                     





A-3












 





(REVERSE OF SECURITY)




11.625% SENIOR SECURED NOTE DUE 2014, SERIES A




                         1. Interest. Basic Energy Services, Inc., a Delaware corporation (the
“Issuer”), promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Notes will accrue from the most recent date on which interest
has been paid or, if no interest has been paid, from the date of the original issuance of the
Notes. The Issuer will pay interest semi-annually in arrears on each Interest Payment Date,
commencing February 1, 2010. Interest will be computed on the basis of a 360-day year of twelve
30-day months.



                         The Issuer shall pay interest on overdue principal and on overdue installments of interest
(without regard to any applicable grace periods) to the extent lawful from time to time on demand
at the rate then borne by the Notes.



                         2. Method of Payment. The Issuer shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of business on the January 15
or July 15 immediately preceding the Interest Payment Date (whether or not such day is a Business
Day) even if the Notes are cancelled on registration of transfer or registration of exchange after
such Record Date. Holders must surrender Notes to a Paying Agent to collect payments of principal
and premium, if any. Payments of principal, premium, if any, and interest will be made in money of
the United States that at the time of payment is legal tender for payment of public and private
debts. If a Holder of Notes in certificated form has given wire transfer instructions to the
Issuer at least ten Business Days prior to the applicable payment date, the Issuer will make all
payments on such Holder’s Notes by wire transfer of immediately available funds to the account
specified in those instructions. Otherwise, payments on the Notes will be made at the office or
agency of the Paying Agent within the City and State of New York unless the Issuer elects to make
interest payments by check mailed to the Holders at their addresses set forth in the register of
Holders.



                         3. Paying Agent and Registrar. Initially, The Bank of New York Mellon Trust Company,
N.A., a national banking association (the “Trustee”), will act as Paying Agent and
Registrar. The Issuer may change any Paying Agent, Registrar or co-Registrar without notice to the
Holders. Neither the Issuer nor any of its Affiliates may act as Paying Agent but may act as
Registrar or co-Registrar. The Issuer has designated the office of The Bank of New York Mellon,
acting on behalf (for the benefit) of, the Trustee, located at 101 Barclay Street, Floor 21 West,
New York, New York 10286 as its office where Notes may be surrendered for registration of transfer
or exchange or for presentation for payment and where notices and demands to or upon the Issuer in
respect of the Notes may be served.



                         4. Indenture. The Issuer issued this Note under an Indenture, dated as of July 31,
2009 (the “Indenture”), by and among the Issuer, the Guarantors and the Trustee. This Note
is one of a duly authorized issue of Initial Notes of the Issuer designated as its 11.625% Senior
Secured Notes due 2014, Series A (the “Notes”). The Notes include the Initial Notes, the
Additional Notes, if any, and the Exchange Notes issued in exchange for the Initial Notes and
Additional Notes, if any, pursuant to the Indenture. The Initial Notes and the Exchange Notes are
treated as a single class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture
Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the “TIA”), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of them. The Notes
are



A - 4 









 




general obligations of the Issuer. The Notes and the Note Guarantees are secured by first
priority Liens (subject to Permitted Collateral Liens) in the Collateral, granted to the Trustee
for the benefit of the Holders of the Notes, as provided in the Indenture and the Security
Documents.




                         5. Redemption.



                         (a) Optional Redemption. The Notes will be redeemable, at the Issuer’s option, in
whole at any time or in part from time to time, on and after February 1, 2012 at the following
Redemption Prices (expressed as percentages of the principal amount thereof) if redeemed during the
twelve-month period commencing on February 1 of the applicable year set forth below, plus, in each
case, accrued and unpaid interest and Liquidated Damages, if any, to the Redemption Date (subject
to the right of Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date):



	 	 	 	 	 
	Year	 	Percentage
	2012
	 	 	105.813	%
	2013
	 	 	102.906	%
	2014 and thereafter
	 	 	100.000	%






                         (b) Redemption at Applicable Premium. In addition, prior to February 1, 2012, the
Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, at a
Redemption Price equal to 100% of the principal amount thereof, plus the Applicable Premium as of,
and accrued and unpaid interest and Liquidated Damages, if any, to the applicable Redemption Date
(subject to the right of Holders of record on the relevant record date to receive interest due on
the relevant Interest Payment Date).



                         (c) Redemption upon Consummation of Certain Qualified Equity Offerings.
Notwithstanding the foregoing, at any time, or from time to time, prior to February 1, 2012, the
Issuer may on any one or more occasions, at its option, use all or any portion of the net cash
proceeds of one or more Qualified Equity Offerings to redeem up to 35% of the aggregate principal
amount of the Notes issued at a Redemption Price equal to 111.625% of the principal amount thereof
plus accrued and unpaid interest and Liquidated Damages, if any, to the date of redemption (subject
to the right of Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date); provided that at least 65% of the aggregate principal amount of
Notes issued under the Indenture remains outstanding immediately after giving effect to any such
redemption. In order to effect the foregoing redemption with the proceeds of any Qualified Equity
Offering, the Issuer shall consummate such redemption not more than 90 days after the consummation
of any such Qualified Equity Offering.



                         6. Notice of Redemption. Notice of redemption under paragraph 5 of this Note will be
mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder to be
redeemed at such Holder’s registered address, except that redemption notices may be mailed more
than 60 days prior to a Redemption Date if the notice is issued in connection with a satisfaction
and discharge of the Indenture.



                         Except as set forth in the Indenture, if money for the redemption of the Notes called for
redemption shall have been deposited with the Paying Agent for redemption on such redemption date,
then, unless the Issuer defaults in the payment of such Redemption Price plus accrued interest, if
any, the Notes called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment of the Redemption
Price plus accrued interest, if any.



A - 5 









 





                         7. Offers to Purchase. The Indenture provides that, after certain Asset Sales or
Collateral Dispositions (each as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations contained therein, the
Issuer will make an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.



                         8. Registration Rights. Pursuant to a Registration Rights Agreement among the Issuer,
the Guarantors, Goldman, Sachs & Co., Banc of America Securities LLC, UBS Securities LLC, Jefferies
& Company, Inc., Capital One Southcoast, Inc. Comerica Securities, Inc. and Natixis Bleichroeder
Inc. as Initial Purchasers of the Notes, the Issuer and the Guarantors are obligated to consummate
an exchange offer pursuant to which the Holder of this Note shall have the right to exchange this
Note for notes of a separate series issued under the Indenture (or a trust indenture substantially
identical to the Indenture in accordance with the terms of the Registration Rights Agreement) which have been registered under the Securities Act, in like principal amount and
having substantially identical terms as the Notes. The Holders shall be entitled to receive
Liquidated Damages by way of certain additional interest payments in the event such exchange offer
is not consummated and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement.



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



                         10. Persons Deemed Owners. The registered holder of a Note shall be treated as the
owner of it for all purposes.



                         11. Unclaimed Money. If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agent will pay the money back to the Issuer.
After that, Holders entitled to money must look to the Issuer for payment as general creditors
unless an “abandoned property” law designates another Person.



                         12. Legal Defeasance and Covenant Defeasance. If the Issuer at any time deposits with
the Trustee U.S. legal tender or U.S. Government Obligations sufficient to pay the principal of and
interest on the Notes to redemption or the scheduled due dates and complies with the other
provisions of the Indenture relating to Covenant Defeasance, the Issuer will be discharged from
certain provisions of the Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes). The Notes are also subject to Legal
Defeasance as provided in Article 9 of the Indenture.



                         13. Amendments, Supplements, and Waivers. Subject to certain exceptions, the
Indenture, the Security Documents or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and
any existing Default or Event of Default or noncompliance with any provision may be waived with the
consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Security Documents or the Notes to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncer-



A - 6 









 




tificated Notes in addition to or in place of certificated Notes
or make any other change that does not adversely affect in any material respect the rights of any
Holder.




                         14. Restrictive Covenants. The Indenture imposes certain limitations on the ability
of each of the Issuer and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness, make payments in respect of its Equity Interests, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting Restricted Subsidiaries, sell
assets, create Liens, make certain Investments, merge or consolidate with any other Person, or
sell, transfer, lease, convey or otherwise dispose of all or substantially all of its assets. Such
limitations are subject to a number of important qualifications and exceptions. The Issuer must
annually report to the Trustee on compliance with such limitations.



                         15. Successor Entity. When a successor entity assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes, the Security Documents and the
Indenture, and immediately before and thereafter no Default or Event of Default exists and certain
other conditions are satisfied, the predecessor entity will be released from those obligations.



                         16. Defaults and Remedies. Events of Default are set forth in the Indenture. If an
Event of Default (other than an Event of Default specified in Section 6.01(g) or (h)) shall occur
and be continuing, the Trustee, by written notice to the Issuer, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding by written notice to the Issuer and the
Trustee, may declare (an “acceleration declaration”) all amounts owing under the Notes to be due and payable immediately; provided, however, that after such
acceleration but before a judgment or decree based on acceleration, the Holders of a majority in
aggregate principal amount of the outstanding Notes may rescind and annul such acceleration if,
among other things, all existing Events of Default, other than the nonpayment of principal, premium
and Liquidated Damages, if any, or interest that has become due solely because of the acceleration,
have been cured or waived. No such rescission shall affect any subsequent Default or impair any
right consequent thereto. In case an Event of Default specified in Section 6.01(g) or (h) of the
Indenture occurs with respect to the Issuer and is continuing, such principal amount, together with
premium and Liquidated Damages, if any, and interest with respect to all of the Notes, shall be due
and payable immediately without any declaration or other act on the part of the Trustee or the
Holders.



                         17. Trustee Dealings with the Issuer. The Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and perform services for
the Issuer, and may otherwise deal with the Issuer, its Subsidiaries or their respective Affiliates
as if it were not the Trustee.



                         18. No Recourse Against Others. As more fully described in the Indenture, no
director, officer, employee, stockholder or incorporator, of the Issuer shall have any liability
for any obligations of the Issuer under the Notes, the Security Documents or the Indenture, or of
any Guarantor under its Note Guarantees or the Security Documents or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. Such waiver and release are part of the consideration for
the issuance of the Notes.



                         19. Authentication. This Note shall not be valid until the Trustee or Authenticating
Agent manually signs the certificate of authentication on this Note.



                         20. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.



A - 7 









 





                         21. Abbreviations and Defined Terms. 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 right of survivorship and not as tenants in common), CUST
(= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).



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



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



                         The Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture, the Registration Rights Agreement or any Security Document. Requests may be made to:
Basic Energy Services, Inc., Attention: Chief Financial Officer, 500 W. Illinois, Suite 100,
Midland, Texas 79701, fax: (432) 620-5501.



A - 8 









 





FORM OF NOTE GUARANTEE NOTATION




                         For value received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in, and
subject to the provisions of, the Indenture dated as of July 31, 2009 (the “Indenture”) among Basic
Energy Ser-vices, Inc. (the “Company”), the Guarantors party thereto and The Bank of New York
Mellon Trust Company, N.A., a national banking association, as trustee (the “Trustee”), that the
principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes will be
promptly paid in full when due, subject to any applicable grace period, whether at the Maturity
Date, by acceleration, redemption or otherwise, and interest on the overdue principal of,
premium, if any, and interest and Liquidated Damages, if any, on the Notes, if lawful, and all
other obligations of the Company to the Holders or the Trustee under the Indenture or under the
Notes, will be promptly paid in full or performed, all in accordance with the terms thereof. The
obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Indenture
(including the Subsidiary Guarantee) are set forth in Article 10 of the Indenture, and reference is
hereby made to the Indenture for the precise terms of the Subsidiary Guarantee and the conditions
to the release thereof. Each Holder of a Note, by accepting the same agrees to and shall be bound
by such provisions.



                         Capitalized terms used but not defined herein have the meanings given to them in the
Indenture.



	 	 	 	 	 
	 	[NAME OF EACH GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A - 9 









 








	 	 	 	 	 



ASSIGNMENT FORM




          If you the Holder want to assign this Note, fill in the form below and have your signature
guaranteed:



I or we assign and transfer this Note to:




	 
	 


	 

	 


	 

	 


	(Print or type name, address and zip code and

social security or tax ID number of assignee)







	 	 	 	 
	and irrevocably appoint

	 	 
	,

	agent to transfer this Note on the books of Basic Energy Services, Inc.. The agent may substitute
another to act for him.






	 	 	 	 	 	 	 	 	 
	Date:

	 	 

	 	 	 	Signed:
	 	 

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






	 	 	 	 
	Medallion Guarantee:

	 	 






Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.






A - 10 









 








[OPTION OF HOLDER TO ELECT PURCHASE]




                         If you want to elect to have this Note purchased by Basic Energy Services, Inc. pursuant to
Section 4.12 or Section 4.15 of the Indenture, check the appropriate box:



Section 4.12 o

Section 4.15 o




                         If you want to elect to have only part of this Note purchased by Basic Energy Services, Inc.
pursuant to Section 4.12 or Section 4.15 of the Indenture, state the amount you elect to have
purchased:



$                     




	 	 	 
	Date:                    
     

	 	 
 NOTICE:
The signature on this assignment
must correspond with the name as it appears
upon the face of the within Note in every particular without alteration or enlargement or any
change whatsoever and be guaranteed by the endorser’s bank or broker.






Medallion Guarantee:                    


Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.





A -11 









 








EXHIBIT B




CUSIP No.: [                 ]




BASIC ENERGY SERVICES, INC.




11.625% SENIOR SECURED NOTE DUE 2014, SERIES B




	 	 	 	 	 
	No.

	$	 	 	 






                         BASIC ENERGY SERVICES, INC., a Delaware corporation (the “Issuer,” which term includes any
successor entity), for value received promises to pay to                      or registered assigns, the
principal sum of [                 ] DOLLARS on August 1, 2014.



                         Interest Payment Dates: February 1 and August 1, commencing February 1, 2010.



                         Record Dates: January 15 and July 15.



                         Reference is made to the further provisions of this Note contained herein and the Indenture
(as defined), which will for all purposes have the same effect as if set forth at this place.



B -1 









 





                         IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by
its duly authorized Officers.



	 	 	 	 	 
	 	BASIC ENERGY SERVICES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



B - 2 









 






	 	 	 	 	 



Certificate of Authentication





                         This is one of the 11.625% Senior Secured Notes due 2014, Series B referred to in the
within-mentioned Indenture.



	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST

     COMPANY, N.A.

      as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 



Date:                     





B - 3 












 





(REVERSE OF SECURITY)




11.625% SENIOR SECURED NOTE DUE 2014, SERIES B




          1.
Interest. Basic Energy Services, Inc., a Delaware corporation (the
“Issuer”), promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Notes will accrue from the most recent date on which interest
has been paid or, if no interest has been paid, from the date of the original issuance of the
Notes. The Issuer will pay interest semi-annually in arrears on each Interest Payment Date,
commencing February 1, 2010. Interest will be computed on the basis of a 360-day year of twelve
30-day months.




          The Issuer shall pay interest on overdue principal and on overdue installments of interest
(without regard to any applicable grace periods) to the extent lawful from time to time on demand
at the rate borne by the Notes.




          2. Method of Payment. The Issuer shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of business on the January 15
or July 15 immediately preceding the Interest Payment Date (whether or not such day is a Business
Day) even if the Notes are cancelled on registration of transfer or registration of exchange after
such Record Date. Holders must surrender Notes to a Paying Agent to collect payments of principal
and premium, if any. Payments of principal, premium, if any, and interest will be made in money of
the United States that at the time of payment is legal tender for payment of public and private
debts. If a Holder of Notes in certificated form has given wire transfer instructions to the
Issuer at least ten Business Days prior to the applicable payment date, the Issuer will make all
payments on such Holder’s Notes by wire transfer of immediately available funds to the account
specified in those instructions. Otherwise, payments on the Notes will be made at the office or
agency of the Paying Agent within the City and State of New York unless the Issuer elects to make
interest payments by check mailed to the Holders at their addresses set forth in the register of
Holders.




          3. Paying Agent and Registrar. Initially, The Bank of New York Mellon Trust Company,
N.A., a national banking association (the “Trustee”), will act as Paying Agent and
Registrar. The Issuer may change any Paying Agent, Registrar or co-Registrar without notice to the
Holders. Neither the Issuer nor any of Affiliates may act as Paying Agent but may act as Registrar
or co-Registrar. The Issuer has designated the office of The Bank of New York Mellon, acting on
behalf (for the benefit) of, the Trustee, located at 101 Barclay Street, Floor 21 West, New York,
New York 10286 as its office where Notes may be surrendered for registration of transfer or
exchange or for presentation for payment and where notices and demands to or upon the Issuer in
respect of the Notes may be served.




          4. Indenture. The Issuer issued this Note under an Indenture, dated as of July 31,
2009 (the “Indenture”), by and among the Issuer, the Guarantors and the Trustee. This Note
is one of a duly authorized issue of Initial Notes of the Issuer designated as its 11.625% Senior
Secured Notes due 2014, Series B (the “Notes”). The Notes include the Initial Notes, the
Additional Notes, if any, and the Exchange Notes issued in exchange for the Initial Notes and
Additional Notes, if any, pursuant to the Indenture. The Initial Notes and the Exchange Notes are
treated as a single class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture
Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the “TIA”), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of them. The Notes
are



B-4









 






general obligations of the Issuer. The Notes and the Note Guarantees are secured by first
priority Liens (subject to Permitted Collateral Liens) in the Collateral, granted to the Trustee
for the benefit of the Holders of the Notes, as provided in the Indenture and the Security
Documents.




          5. Redemption.




          (a) Optional Redemption. The Notes will be redeemable, at the Issuer’s option, in
whole at any time or in part from time to time, on and after February 1, 2012 at the following
Redemption Prices (expressed as percentages of the principal amount thereof) if redeemed during the
twelve-month period commencing on February 1 of the applicable year set forth below, plus, in each
case, accrued and unpaid interest and Liquidated Damages, if any, to the Redemption Date (subject
to the right of Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date):




	 	 	 	 	 
	Year	 	Percentage
	2012
	 	 	105.813	%
	2013
	 	 	102.906	%
	2014 and thereafter
	 	 	100.000	%






          (b) Redemption at Applicable Premium. In addition, prior to February 1, 2012, the
Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, at a
Redemption Price equal to 100% of the principal amount thereof, plus the Applicable Premium as of,
and accrued and unpaid interest and Liquidated Damages, if any, to the applicable Redemption Date
(subject to the right of Holders of record on the relevant record date to receive interest due on
the relevant Interest Payment Date).




          (c) Redemption upon Consummation of Certain Qualified Equity Offerings.
Notwithstanding the foregoing, at any time, or from time to time, prior to February 1, 2012, the
Issuer may on any one or more occasions, at its option, use all or any portion of the net cash
proceeds of one or more Qualified Equity Offerings to redeem up to 35% of the aggregate principal
amount of the Notes issued at a Redemption Price equal to 111.625% of the principal amount thereof
plus accrued and unpaid interest and Liquidated Damages, if any, to the date of redemption (subject
to the right of Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date); provided that at least 65% of the aggregate principal amount of
Notes issued under the Indenture remains outstanding immediately after giving effect to any such
redemption. In order to effect the foregoing redemption with the proceeds of any Qualified Equity
Offering, the Issuer shall consummate such redemption not more than 90 days after the consummation
of any such Qualified Equity Offering.




          6. Notice of Redemption. Notice of redemption under paragraph 5 of this Note will be
mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder to be
redeemed at such Holder’s registered address, except that redemption notices may be mailed more
than 60 days prior to a Redemption Date if the notice is issued in connection with a satisfaction
and discharge of the Indenture.




          Except as set forth in the Indenture, if money for the redemption of the Notes called for
redemption shall have been deposited with the Paying Agent for redemption on such redemption date,
then, unless the Issuer defaults in the payment of such Redemption Price plus accrued interest, if
any, the Notes called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment of the Redemption
Price plus accrued interest, if any.




B-5









 








          7. Offers to Purchase. The Indenture provides that, after certain Asset Sales or
Collateral Dispositions (each as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations contained therein, the
Issuer will make an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.




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




          9. Persons Deemed Owners. The registered holder of a Note shall be treated as the
owner of it for all purposes.




          10. Unclaimed Money. If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agent will pay the money back to the Issuer.
After that, Holders entitled to money must look to the Issuer for payment as general creditors
unless an “abandoned property” law designates another Person.




          11. Legal Defeasance and Covenant Defeasance. If the Issuer at any time deposits with
the Trustee U.S. legal tender or U.S. Government Obligations sufficient to pay the principal of and
interest on the Notes to redemption or the scheduled due dates and complies with the other
provisions of the Indenture relating to Covenant Defeasance, the Issuer will be discharged from
certain provisions of the Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes). The Notes are also subject to Legal
Defeasance as provided in Article 9 of the Indenture.




          12. Amendments, Supplements, and Waivers. Subject to certain exceptions, the
Indenture, the Security Documents or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and
any existing Default or Event of Default or noncompliance with any provision may be waived with the
consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Security Documents or the Notes to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Notes in addition to or in place of certificated Notes
or make any other change that does not adversely affect in any material respect the rights of any
Holder.




          13. Restrictive Covenants. The Indenture imposes certain limitations on the ability
of each of the Issuer and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness, make payments in respect of its Equity Interests, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting Restricted Subsidiaries, sell
assets, create Liens, make certain Investments, merge or consolidate with any other Person, or
sell, transfer, lease, convey or otherwise dispose of all or substantially all of its assets. Such
limitations are subject to a number of important qualifications and exceptions. The Issuer must
annually report to the Trustee on compliance with such limitations.




B-6









 








          14. Successor Entity. When a successor entity assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes, the Security Documents and the
Indenture, and immediately before and thereafter no Default or Event of Default exists and certain
other conditions are satisfied, the predecessor entity will be released from those obligations.




          15. Defaults and Remedies. Events of Default are set forth in the Indenture. If an
Event of Default (other than an Event of Default specified in Section 6.01(g) or (h)) shall occur
and be continuing, the Trustee, by written notice to the Issuer, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding by written notice to the Issuer and the
Trustee, may declare (an “acceleration declaration”) all amounts owing under the Notes to be due
and payable immediately; provided, however, that after such acceleration but before a judgment or
decree based on acceleration, the Holders of a majority in aggregate principal amount of the
outstanding Notes may rescind and annul such acceleration if, among other things, all existing
Events of Default, other than the nonpayment of principal, premium and Liquidated Damages, if any,
or interest that has become due solely because of the acceleration, have been cured or waived. No
such rescission shall affect any subsequent Default or impair any right consequent thereto. In
case an Event of Default specified in Section 6.01(g) or (h) of the Indenture occurs with respect
to the Issuer and is continuing, such principal amount, together with premium and Liquidated
Damages, if any, and interest with respect to all of the Notes, shall be due and payable
immediately without any declaration or other act on the part of the Trustee or the Holders.




          16. Trustee Dealings with the Issuer. The Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and perform services for
the Issuer, and may otherwise deal with the Issuer, its Subsidiaries or their respective Affiliates
as if it were not the Trustee.




          17. No Recourse Against Others. As more fully described in the Indenture, no
director, officer, employee, stockholder or incorporator, of the Issuer shall have any liability
for any obligation of the Issuer under the Notes, the Security Documents or the Indenture or of any
Guarantor under its Note Guarantees or the Security Documents or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. Such waiver and release are part of the consideration for the
issuance of the Notes.




          18. Authentication. This Note shall not be valid until the Trustee or Authenticating
Agent manually signs the certificate of authentication on this Note.




          19. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.




          20. Abbreviations and Defined Terms. 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 right of survivorship and not as tenants in common), CUST
(= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).




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




B-7









 








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




          The Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture or any Security Document. Requests may be made to: Basic Energy Services, Inc.,
Attention: Chief Financial Officer, 500 W. Illinois, Suite 100, Midland, Texas 79701, fax: (432)
620-5501.




B-8









 








FORM OF NOTE GUARANTEE NOTATION




          For value received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in, and
subject to the provisions of, the Indenture dated as of July 31, 2009 (the “Indenture”) among Basic
Energy Services, Inc. (the “Company”), the Guarantors party thereto and The Bank of New York Mellon
Trust Company, N.A., a national banking association, as trustee (the “Trustee”), that the principal
of, premium, if any, and interest and Liquidated Damages, if any, on the Notes will be promptly
paid in full when due, subject to any applicable grace period, whether at the Maturity Date, by
acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any,
and interest and Liquidated Damages, if any, on the Notes, if lawful, and all other obligations of
the Company to the Holders or the Trustee under the Indenture or under the Notes, will be promptly
paid in full or performed, all in accordance with the terms thereof. The obligations of the
Guarantors to the Holders of Notes and to the Trustee pursuant to the Indenture (including the
Subsidiary Guarantee) are set forth in Article 10 of the Indenture, and reference is hereby made to
the Indenture for the precise terms of the Subsidiary Guarantee and the conditions to the release
thereof. Each Holder of a Note, by accepting the same agrees to and shall be bound by such
provisions.




          Capitalized terms used but not defined herein have the meanings given to them in the
Indenture.




	 	 	 	 	 
	 	[NAME OF EACH GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



B-9









 






	 	 	 	 	 



ASSIGNMENT FORM




          If you the Holder want to assign this Note, fill in the form below and have your signature
guaranteed:



I or we assign and transfer this Note to:




	 
	 


	 

	 


	 

	 


	(Print or type name, address and zip code and

social security or tax ID number of assignee)







	 	 	 
	and irrevocably appoint

	 	 

	agent to transfer this Note on the books of Basic Energy Services, Inc.. The agent may substitute
another to act for him.






	 	 	 	 	 	 	 	 	 
	Date:

	 	 

	 	 	 	Signed:
	 	 

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






	 	 	 	 
	Medallion Guarantee:

	 	 






Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.




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[OPTION OF HOLDER TO ELECT PURCHASE]




          If you want to elect to have this Note purchased by Basic Energy Services, Inc. pursuant to
Section 4.12 or Section 4.15 of the Indenture, check the appropriate box:




          Section 4.12 o




          Section 4.15 o




          If you want to elect to have only part of this Note purchased by Basic Energy Services, Inc.
pursuant to Section 4.12 or Section 4.15 of the Indenture, state the amount you elect to have
purchased:




	 	 	 
	$	 	 








	 	 	 	 	 	 	 
	Date:	 	 

	 	 	 	 

	 	 	 
	 	 	 	NOTICE:  The signature on this
assignment must correspond with the name as it appears upon the face
of the within Note in every particular without alteration or
enlargement or any change whatsoever and be guaranteed by the endorser's bank or broker.






	 	 	 	 	 
	Medallion Guarantee:

	 	 

	 	 





Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.




B-11









 





EXHIBIT C




CERTIFICATE TO BE DELIVERED UPON EXCHANGE

OR REGISTRATION OF TRANSFER OF NOTES




Re: Basic Energy Services, Inc. Inc. ( “Basic Energy Services, Inc.”)

       11.625% Senior Secured Notes due 2014 (the “Notes”) 




          This Certificate relates to $                     principal amount of Notes held in the form of*                      a
beneficial interest in a Global Note or*                      Certificated Notes by                      (the
“Transferor”).




          The Transferor:




          o has requested by written order that the Registrar deliver in exchange for its
beneficial interest in the Global Note held by the Depository a Certificated Note or Certificated
Notes in definitive, registered form of authorized denominations and an aggregate principal amount
equal to its beneficial interest in such Global Note (or the portion thereof indicated above); or




          o has requested by written order that the Registrar exchange or register the transfer of
a Certificated Note or Certificated Notes.




          In connection with such request and in respect of each such Note, the Transferor does hereby
certify that the Transferor is familiar with the Indenture relating to the above captioned Notes
and the restrictions on transfers thereof as provided in Section 2.16 of such Indenture, and that
the transfer of the Notes does not require registration under the Securities Act of 1933, as
amended (the “Securities Act”), because*:




          o Such Note is being acquired for the Transferor’s own account, without transfer (in
satisfaction of Section 2.16 of the Indenture).




          o Such Note is being transferred to a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act), in reliance on Rule 144A.




          o Such Note is being transferred to an institutional “accredited investor” (within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act) which
delivers a certificate to the Trustee in the form of Exhibit D to the Indenture. [An
Opinion of Counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.]




          o Such Note is being transferred in reliance on Regulation S under the Securities Act
and a transfer certificate for Regulation S transfers in the form of Exhibit E to the
Indenture accompanies this certification. [An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this certification.]




          o Such Note is being transferred in reliance on Rule 144 under the Securities Act. [An
Opinion of Counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.]




          o Such Note is being transferred in reliance on and in compliance with an exemption from
the registration requirements of the Securities Act other than Regulation S, Rule 144A or Rule 144
under the Securities Act to a Person other than an institutional “accredited investor.” [An



C-1









 







Opinion of Counsel to the effect that such transfer does not require registration under the Securities
Act accompanies this certification.]




	 	 	 	 	 
	 	 

[INSERT NAME OF TRANSFEROR]

 	 
	 	By:  	 	 
	 	 	[Authorized Signatory] 	 
	 	 	 	 
	 



Date                     

*Check applicable box.





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EXHIBIT D




Form of Transferee Letter of Representation




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

Corporate Trust Division

601 Travis; 16th Floor

Houston, Texas 77002




Ladies and Gentlemen:




          This certificate is delivered with respect to a transfer of $                    principal amount of the
11.625% Senior Secured Notes due 2014 of Basic Energy Services, Inc. (“Basic Energy Services,
Inc.”) and any guarantee thereof (the “Notes”), or a beneficial interest therein, to
the undersigned transferee.




          The undersigned represents and warrants to you that:




          1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act of 1933 (the “Securities Act”)) purchasing Notes for our own
account or for the account of such an institutional “accredited investor” and we are acquiring the
Notes not with a view to, or for offer or sale in connection with, any distribution in violation of
the Securities Act. We have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risk of our investment in the Notes and we invest in or
purchase securities similar to the Notes in the normal course of our business. We and any accounts
for which we are acting are each able to bear the economic risk of our or its investment.




          2. We acknowledge that we have had access to such financial and other information, and have
been afforded the opportunity to ask such questions of representatives of Basic Energy Services,
Inc. and receive answers thereto, as we deem necessary.




          3. We understand that the Notes have not been registered under the Securities Act and, unless
so registered, may not be sold except as permitted in the following sentence. We agree on our own
behalf and on behalf of any investor account for which we are purchasing Notes that we will not
prior to the date (the “Resale Restriction Termination Date”) that is (a) one year after
the later of the original issuance of the Notes and the last date on which Basic Energy Services,
Inc. or any affiliate of Basic Energy Services, Inc. was the owner of such Notes (or any
predecessor thereto) or (b) such later date, if any, as may be required by any subsequent change in
applicable law, offer, sell or otherwise transfer such Notes except (a) to Basic Energy Services,
Inc. or any subsidiary of Basic Energy Services, Inc., (b) inside the United States to a “qualified
institutional buyer” in compliance with Rule 144A under the Securities Act, (c) inside the United
States to an “institutional accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that, prior to such transfer, furnishes (or has furnished on its behalf by
a U.S. broker-dealer) to the Trustee a signed letter substantially in the form of this letter, (d)
outside the United States in an offshore transaction in compliance with Rule 904 under the
Securities Act, (e) pursuant to Rule 144 under the Securities Act, (f) pursuant to any other
available exemption from the registration requirements of the Securities Act or (g) pursuant to an
effective registration statement under the Securities Act. We acknowledge that Basic Energy
Services, Inc. and the Trustee reserve the right prior to any offer, sale or other transfer prior
to the Resale Restriction Termination Date of the applicable



D-1









 








	 	 	Notes pursuant to clause (c), (e) or (f) above to require the delivery of an opinion of
counsel satisfactory to Basic Energy Services, Inc. and the Trustee.





          4. We understand that the Trustee will not be required to accept for registration of transfer
any Notes acquired by us, except upon presentation of evidence satisfactory to Basic Energy
Services, Inc. and the Trustee that the foregoing restrictions on transfer have been complied with.
We further understand that any Notes purchased by us in the form of definitive physical
certificates will bear a legend reflecting the substance of paragraph 3 of this letter. We
further agree to provide to any Person acquiring any of the Notes from us a notice advising such
Person that transfers of such Notes are restricted as stated herein and that certificates
representing such Notes will bear a legend to that effect.




          5. We understand that Basic Energy Services, Inc. and the Trustee and others are entitled to
rely upon the truth and accuracy of our acknowledgments, representations and agreements set forth
herein, and we agree to notify you promptly in writing if any of our acknowledgments,
representations or agreements herein ceases to be accurate and complete. You are also irrevocably
authorized to produce this letter or a copy hereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters covered hereby.




          6. We represent to you that we have full power to make the foregoing acknowledgments,
representations and agreements on our own behalf and on behalf of any investor account for which we
are acting as fiduciary agent.




          As used herein, the terms “offshore transaction,” “United States” and “U.S. person” have the
respective meanings given to them in Regulation S under the Securities Act.




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




	 	 	 	 	 	 	 	 	 
	Dated:	 	 
	 	 	 	TRANSFEREE:


	 	 	 	 	 	 	[NAME]


	 	 	 	 	 	 	By:
	 	 








	 	 	 
	Address:
	 	 


	 	 	 

	 

	 	 	 

	 







D-2









 





EXHIBIT E




Form of Certificate to Be

Delivered in Connection

with Regulation S Transfers




                    ,                     




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

Corporate Trust Division

601 Travis; 16th Floor

Houston, Texas 77002



Attn:
[                    ]


Re: Basic Energy Services, Inc. 11.625% Senior Secured Notes due 2014 (the “Notes”)




Ladies and Gentlemen:




          In connection with our proposed sale of $                     aggregate principal amount of the Notes or
a beneficial interest therein, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended (the “Securities
Act”), and, accordingly, we represent that:





     (1) the offer of the Notes was not made to a person in the United States;




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




     (3) no directed selling efforts have been made in the United States in contravention of
the requirements of Rule 903(a) or Rule 904(a) of Regulation S, as applicable;




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




     (5) we have advised the transferee of the transfer restrictions applicable to the
Notes.



E-1









 





          You and Basic Energy Services, Inc. are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered hereby. Defined terms
used herein without definition have the respective meanings provided in Regulation S.




	 	 	 	 	 
	 	Very truly yours,





[Name of Transferor]

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 




E-2









 





EXHIBIT F




FORM OF SUPPLEMENTAL INDENTURE




          SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of [           ], 20[     
] among [           ] (the “New Guarantor”), a subsidiary of Basic Energy Services, Inc. (or
its successor), a Delaware corporation (the “Issuer”), the Guarantors (the “Existing
Guarantors”) under the Indenture referred to below, and The Bank of New York Mellon Trust
Company, N.A., as trustee under the Indenture referred to below (the “Trustee”).




W
I T N E S S E
T H :




          WHEREAS the Issuer has heretofore executed and delivered to the Trustee an Indenture (as such
may be amended from time to time, the “Indenture”), dated as of July 31, 2009 providing for
the issuance of its 11.625% Senior Secured Notes due 2014 (the “Notes”);




          WHEREAS under certain circumstances the Issuer 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 of the Issuer’s obligations under the Notes pursuant to a Note
Guarantee on the terms and conditions set forth herein; and




          WHEREAS pursuant to Section 8.01 of the Indenture, the Trustee, the Issuer 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 Issuer, the
Existing Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit
of the Holders as follows:




          1. Definitions. (a) Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.




          (b) For all purposes of this Supplemental Indenture, except as otherwise herein expressly
provided or unless the context otherwise requires: (i) the terms and expressions used herein shall
have the same meanings as corresponding terms and expressions used in the Indenture; and (ii) the
words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental
Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.




          2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally
with all other Guarantors, to guarantee the Issuer’s obligations under the Notes on the terms and
subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other
applicable provisions of the Indenture. From and after the date hereof, the New Guarantor shall be
a Guarantor for all purposes under the Indenture and the Notes.




          3. 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 heretofore or
hereafter authenticated and delivered shall be bound hereby.




F-1









 








          4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.




          5. Trustee Makes No Representation. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture
or for or in respect of the recitals contained herein, all of which are made solely by the Issuer.




          6. Multiple Counterparts. The parties may sign multiple counterparts of this
Supplemental Indenture. Each signed counterpart shall be deemed an original, but all of them
together represent one and the same agreement.




          7. Headings. The headings of this Supplemental Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof, and shall in no way modify
or restrict any of the terms or provisions hereof.




F-2









 








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




	 	 	 	 	 
	 	[NEW GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	BASIC ENERGY SERVICES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




F-3









 





	 	 	 	 	 
	 	EXISTING GUARANTORS:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
  
as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




F-4