Exhibit 4.1


 


EXECUTION COPY


 


KEMET CORPORATION,


as Issuer,


 


and


 


THE GUARANTORS PARTY HERETO


 






 


101⁄2% SENIOR NOTES DUE 2018


 






 


INDENTURE


 


Dated as of May 5, 2010


 






 


WILMINGTON TRUST COMPANY


as Trustee


 

















 


CROSS-REFERENCE TABLE*


 


	
  Trust Indenture Act Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
  (b)

  	
   

  	
  7.3, 7.10

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.5

  
	
   

  	
  (b)

  	
   

  	
  13.3

  
	
   

  	
  (c)

  	
   

  	
  13.3

  
	
  313

  	
  (a)

  	
   

  	
  7.6

  
	
   

  	
  (b)(1)

  	
   

  	
  7.6

  
	
   

  	
  (b)(2)

  	
   

  	
  7.6, 7.7

  
	
   

  	
  (c)

  	
   

  	
  7.6, 13.2

  
	
   

  	
  (d)

  	
   

  	
  7.6

  
	
  314

  	
  (a)

  	
   

  	
  4.3, 13.5

  
	
   

  	
  (b)

  	
   

  	
  10.2

  
	
   

  	
  (c)(1)

  	
   

  	
  13.4

  
	
   

  	
  (c)(2)

  	
   

  	
  13.4

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  10.3, 10.6

  
	
   

  	
  (e)

  	
   

  	
  13.5

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.1

  
	
   

  	
  (b)

  	
   

  	
  7.5

  
	
   

  	
  (c)

  	
   

  	
  7.1

  
	
   

  	
  (d)

  	
   

  	
  7.1

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a)(last sentence)

  	
   

  	
  2.9

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.5

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.4

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.7

  
	
   

  	
  (c)

  	
   

  	
  2.13

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.8

  
	
   

  	
  (a)(2)

  	
   

  	
  6.9

  
	
   

  	
  (b)

  	
   

  	
  2.3

  
	
  318

  	
  (a)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  13.1

  



 






N.A.
means not applicable.


 


*              This Cross-Reference Table is not
part of this Indenture.


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE I

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  SECTION 1.2

  	
   

  	
  Other
  Definitions

  	
   

  	
  30

  
	
  SECTION 1.3

  	
   

  	
  Incorporation
  by Reference of TIA

  	
   

  	
  31

  
	
  SECTION 1.4

  	
   

  	
  Rules of
  Construction

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE II

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE NOTES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
   

  	
  Form and
  Dating

  	
   

  	
  32

  
	
  SECTION 2.2

  	
   

  	
  Execution
  and Authentication

  	
   

  	
  33

  
	
  SECTION 2.3

  	
   

  	
  Registrar;
  Paying Agent

  	
   

  	
  34

  
	
  SECTION 2.4

  	
   

  	
  Paying
  Agent to Hold Money in Trust

  	
   

  	
  34

  
	
  SECTION 2.5

  	
   

  	
  Holder
  Lists

  	
   

  	
  35

  
	
  SECTION 2.6

  	
   

  	
  Book-Entry
  Provisions for Global Securities

  	
   

  	
  35

  
	
  SECTION 2.7

  	
   

  	
  Replacement
  Notes

  	
   

  	
  37

  
	
  SECTION 2.8

  	
   

  	
  Outstanding
  Notes

  	
   

  	
  37

  
	
  SECTION 2.9

  	
   

  	
  Treasury
  Notes

  	
   

  	
  37

  
	
  SECTION 2.10

  	
   

  	
  Temporary
  Notes

  	
   

  	
  38

  
	
  SECTION 2.11

  	
   

  	
  Cancellation

  	
   

  	
  38

  
	
  SECTION 2.12

  	
   

  	
  Defaulted
  Interest

  	
   

  	
  38

  
	
  SECTION 2.13

  	
   

  	
  Record
  Date

  	
   

  	
  38

  
	
  SECTION 2.14

  	
   

  	
  Computation
  of Interest

  	
   

  	
  38

  
	
  SECTION 2.15

  	
   

  	
  CUSIP
  Number

  	
   

  	
  39

  
	
  SECTION 2.16

  	
   

  	
  Special
  Transfer Provisions

  	
   

  	
  39

  
	
  SECTION 2.17

  	
   

  	
  Issuance
  of Additional Notes

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE III

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REDEMPTION AND PREPAYMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
   

  	
  Notices
  to Trustee

  	
   

  	
  41

  
	
  SECTION 3.2

  	
   

  	
  Selection
  of Notes to Be Redeemed

  	
   

  	
  41

  
	
  SECTION 3.3

  	
   

  	
  Notice
  of Redemption

  	
   

  	
  42

  
	
  SECTION 3.4

  	
   

  	
  Effect
  of Notice of Redemption

  	
   

  	
  42

  
	
  SECTION 3.5

  	
   

  	
  Deposit
  of Redemption of Purchase Price

  	
   

  	
  42

  
	
  SECTION 3.6

  	
   

  	
  Notes
  Redeemed in Part

  	
   

  	
  43

  
	
  SECTION 3.7

  	
   

  	
  Optional
  Redemption

  	
   

  	
  43

  
	
  SECTION 3.8

  	
   

  	
  Mandatory
  Redemption

  	
   

  	
  44

  
	
  SECTION 3.9

  	
   

  	
  Offer
  to Purchase

  	
   

  	
  44

  



 


i

















 


	
   

  	
   

  	
  ARTICLE IV

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COVENANTS

  	
   

  	
   

  
	
  SECTION 4.1

  	
   

  	
  Payment
  of Notes

  	
   

  	
  45

  
	
  SECTION 4.2

  	
   

  	
  Maintenance
  of Office or Agency

  	
   

  	
  45

  
	
  SECTION 4.3

  	
   

  	
  Provision
  of Financial Information

  	
   

  	
  46

  
	
  SECTION 4.4

  	
   

  	
  Compliance
  Certificate

  	
   

  	
  47

  
	
  SECTION 4.5

  	
   

  	
  Taxes

  	
   

  	
  47

  
	
  SECTION 4.6

  	
   

  	
  Stay,
  Extension and Usury Laws

  	
   

  	
  47

  
	
  SECTION 4.7

  	
   

  	
  Limitation
  on Restricted Payments

  	
   

  	
  48

  
	
  SECTION 4.8

  	
   

  	
  Limitation
  on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

  	
   

  	
  50

  
	
  SECTION 4.9

  	
   

  	
  Limitation
  on Incurrence of Debt

  	
   

  	
  52

  
	
  SECTION 4.10

  	
   

  	
  Limitation
  on Asset Sales

  	
   

  	
  53

  
	
  SECTION 4.11

  	
   

  	
  Limitation
  on Transactions with Affiliates

  	
   

  	
  54

  
	
  SECTION 4.12

  	
   

  	
  Limitation
  on Liens

  	
   

  	
  56

  
	
  SECTION 4.13

  	
   

  	
  Limitation
  on Sale and Leaseback Transactions

  	
   

  	
  56

  
	
  SECTION 4.14

  	
   

  	
  Offer
  to Purchase upon Change of Control

  	
   

  	
  56

  
	
  SECTION 4.15

  	
   

  	
  Corporate
  Existence

  	
   

  	
  57

  
	
  SECTION 4.16

  	
   

  	
  Limitation
  on Layering Debt

  	
   

  	
  58

  
	
  SECTION 4.17

  	
   

  	
  Business
  Activities

  	
   

  	
  58

  
	
  SECTION 4.18

  	
   

  	
  Payment
  for Consents

  	
   

  	
  58

  
	
  SECTION 4.19

  	
   

  	
  Impairment
  of Security Interests

  	
   

  	
  58

  
	
  SECTION 4.20

  	
   

  	
  Additional
  Note Guarantees

  	
   

  	
  58

  
	
  SECTION 4.21

  	
   

  	
  Limitation
  on Creation of Unrestricted Subsidiaries

  	
   

  	
  59

  
	
  SECTION 4.22

  	
   

  	
  Further
  Assurances

  	
   

  	
  59

  
	
  SECTION 4.23

  	
   

  	
  Italian
  Pledge Agreement

  	
   

  	
  60

  
	
  SECTION 4.24

  	
   

  	
  Covenant
  Suspension

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE V

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUCCESSORS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
   

  	
  Consolidation,
  Merger, Conveyance, Transfer or Lease

  	
   

  	
  61

  
	
  SECTION 5.2

  	
   

  	
  Successor
  Person Substituted

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VI

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DEFAULTS AND REMEDIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
   

  	
  Events
  of Default

  	
   

  	
  63

  
	
  SECTION 6.2

  	
   

  	
  Acceleration

  	
   

  	
  65

  
	
  SECTION 6.3

  	
   

  	
  Other
  Remedies

  	
   

  	
  66

  
	
  SECTION 6.4

  	
   

  	
  Waiver
  of Past Defaults

  	
   

  	
  66

  
	
  SECTION 6.5

  	
   

  	
  Control
  by Majority

  	
   

  	
  66

  
	
  SECTION 6.6

  	
   

  	
  Limitation
  on Suits

  	
   

  	
  66

  
	
  SECTION 6.7

  	
   

  	
  Rights
  of Holders to Receive Payment

  	
   

  	
  67

  
	
  SECTION 6.8

  	
   

  	
  Collection
  Suit by Trustee

  	
   

  	
  67

  
	
  SECTION 6.9

  	
   

  	
  Trustee
  May File Proofs of Claim

  	
   

  	
  67

  



 


ii

















 


	
  SECTION 6.10

  	
   

  	
  Priorities

  	
   

  	
  68

  
	
  SECTION 6.11

  	
   

  	
  Undertaking
  for Costs

  	
   

  	
  68

  
	
  SECTION 6.12

  	
   

  	
  Appointment
  and Authorization of the Collateral Agent

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VII

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRUSTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
   

  	
  Duties
  of Trustee

  	
   

  	
  69

  
	
  SECTION 7.2

  	
   

  	
  Rights
  of Trustee

  	
   

  	
  70

  
	
  SECTION 7.3

  	
   

  	
  Individual
  Rights of Trustee

  	
   

  	
  71

  
	
  SECTION 7.4

  	
   

  	
  Trustee’s
  Disclaimer

  	
   

  	
  72

  
	
  SECTION 7.5

  	
   

  	
  Notice
  of Defaults

  	
   

  	
  72

  
	
  SECTION 7.6

  	
   

  	
  Reports
  by Trustee to Holders

  	
   

  	
  72

  
	
  SECTION 7.7

  	
   

  	
  Compensation
  and Indemnity

  	
   

  	
  72

  
	
  SECTION 7.8

  	
   

  	
  Replacement
  of Trustee

  	
   

  	
  73

  
	
  SECTION 7.9

  	
   

  	
  Successor
  Trustee by Merger, Etc.

  	
   

  	
  74

  
	
  SECTION 7.10

  	
   

  	
  Eligibility;
  Disqualification

  	
   

  	
  74

  
	
  SECTION 7.11

  	
   

  	
  Preferential
  Collection of Claims Against the Issuer

  	
   

  	
  75

  
	
  SECTION 7.12

  	
   

  	
  Trustee’s
  Application for Instructions from the Issuer

  	
   

  	
  75

  
	
  SECTION 7.13

  	
   

  	
  Limitation
  of Liability

  	
   

  	
  75

  
	
  SECTION 7.14

  	
   

  	
  Collateral
  Agent

  	
   

  	
  75

  
	
  SECTION 7.15

  	
   

  	
  Co-Trustees;
  Separate Trustee; Collateral Agent

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VIII

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
   

  	
  Option
  to Effect Legal Defeasance or Covenant Defeasance

  	
   

  	
  77

  
	
  SECTION 8.2

  	
   

  	
  Defeasance
  and Discharge

  	
   

  	
  77

  
	
  SECTION 8.3

  	
   

  	
  Covenant
  Defeasance

  	
   

  	
  78

  
	
  SECTION 8.4

  	
   

  	
  Conditions
  to Legal Defeasance or Covenant Defeasance

  	
   

  	
  78

  
	
  SECTION 8.5

  	
   

  	
  Deposited
  Money and Government Securities to Be Held in Trust; Other Miscellaneous
  Provisions

  	
   

  	
  80

  
	
  SECTION 8.6

  	
   

  	
  Repayment
  to Issuer

  	
   

  	
  80

  
	
  SECTION 8.7

  	
   

  	
  Reinstatement

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IX

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AMENDMENT, SUPPLEMENT AND WAIVER

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
   

  	
  Without
  Consent of Holders

  	
   

  	
  81

  
	
  SECTION 9.2

  	
   

  	
  With
  Consent of Holders

  	
   

  	
  82

  
	
  SECTION 9.3

  	
   

  	
  Compliance
  with TIA

  	
   

  	
  83

  
	
  SECTION 9.4

  	
   

  	
  Revocation
  and Effect of Consents

  	
   

  	
  83

  
	
  SECTION 9.5

  	
   

  	
  Notation
  on or Exchange of Notes

  	
   

  	
  83

  
	
  SECTION 9.6

  	
   

  	
  Trustee
  to Sign Amendments, Etc.

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE X

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECURITY

  	
   

  	
   

  



 


iii

















 


	
  SECTION 10.1

  	
   

  	
  Security
  Documents; Additional Collateral

  	
   

  	
  84

  
	
  SECTION 10.2

  	
   

  	
  Recording,
  Registration and Opinions

  	
   

  	
  85

  
	
  SECTION 10.3

  	
   

  	
  Releases
  of Collateral

  	
   

  	
  86

  
	
  SECTION 10.4

  	
   

  	
  Form and
  Sufficiency of Release

  	
   

  	
  87

  
	
  SECTION 10.5

  	
   

  	
  Possession
  and Use of Collateral

  	
   

  	
  88

  
	
  SECTION 10.6

  	
   

  	
  Specified
  Releases of Collateral

  	
   

  	
  88

  
	
  SECTION 10.7

  	
   

  	
  Purchaser
  Protected

  	
   

  	
  89

  
	
  SECTION 10.8

  	
   

  	
  Authorization
  of Actions to Be Taken by the Collateral Agent Under the Security Documents

  	
   

  	
  89

  
	
  SECTION 10.9

  	
   

  	
  Authorization
  of Receipt of Funds by the Trustee Under the Pledge Agreement

  	
   

  	
  89

  
	
  SECTION 10.10

  	
   

  	
  Powers
  Exercisable by Receiver or Collateral Agent

  	
   

  	
  89

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE XI

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLICATION OF TRUST MONIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.1

  	
   

  	
  Collateral
  Account

  	
   

  	
  90

  
	
  SECTION 11.2

  	
   

  	
  Investment
  of Trust Monies

  	
   

  	
  90

  
	
  SECTION 11.3

  	
   

  	
  Use
  of Trust Monies; Retirement of Notes

  	
   

  	
  90

  
	
  SECTION 11.4

  	
   

  	
  Disposition
  of Notes Retired

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE XII

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTE GUARANTEES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.1

  	
   

  	
  Note
  Guarantees

  	
   

  	
  91

  
	
  SECTION 12.2

  	
   

  	
  Execution
  and Delivery of Note Guarantee

  	
   

  	
  93

  
	
  SECTION 12.3

  	
   

  	
  Severability

  	
   

  	
  93

  
	
  SECTION 12.4

  	
   

  	
  Limitation
  of Guarantors’ Liability

  	
   

  	
  93

  
	
  SECTION 12.5

  	
   

  	
  Guarantors
  May Consolidate, Etc., on Certain Terms

  	
   

  	
  93

  
	
  SECTION 12.6

  	
   

  	
  Releases
  Following Sale of Assets

  	
   

  	
  94

  
	
  SECTION 12.7

  	
   

  	
  Release
  of a Guarantor

  	
   

  	
  94

  
	
  SECTION 12.8

  	
   

  	
  Benefits
  Acknowledged

  	
   

  	
  95

  
	
  SECTION 12.9

  	
   

  	
  Future
  Guarantors

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE XIII

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.1

  	
   

  	
  TIA
  Controls

  	
   

  	
  95

  
	
  SECTION 13.2

  	
   

  	
  Notices

  	
   

  	
  95

  
	
  SECTION 13.3

  	
   

  	
  Communication
  by Holders with Other Holders

  	
   

  	
  97

  
	
  SECTION 13.4

  	
   

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  	
  97

  
	
  SECTION 13.5

  	
   

  	
  Statements
  Required in Certificate or Opinion

  	
   

  	
  97

  
	
  SECTION 13.6

  	
   

  	
  Rules by
  Trustee and Agents

  	
   

  	
  98

  
	
  SECTION 13.7

  	
   

  	
  No
  Personal Liability of Directors, Officers, Employees and Stockholders

  	
   

  	
  98

  
	
  SECTION 13.8

  	
   

  	
  Governing
  Law

  	
   

  	
  98

  
	
  SECTION 13.9

  	
   

  	
  No
  Adverse Interpretation of Other Agreements

  	
   

  	
  98

  
	
  SECTION 13.10

  	
   

  	
  Successors

  	
   

  	
  98

  
	
  SECTION 13.11

  	
   

  	
  Severability

  	
   

  	
  98

  



 


iv

















 


	
  SECTION 13.12

  	
   

  	
  Counterpart
  Originals

  	
   

  	
  98

  
	
  SECTION 13.13

  	
   

  	
  Table
  of Contents, Headings, Etc.

  	
   

  	
  99

  
	
  SECTION 13.14

  	
   

  	
  Acts
  of Holders

  	
   

  	
  99

  
	
  SECTION 13.15

  	
   

  	
  Intercreditor Agreement

  	
   

  	
  100

  



 


	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  FORM OF
  NOTE

  
	
  Exhibit B

  	
   

  	
  FORM OF
  NOTATIONAL GUARANTEE

  
	
  Exhibit C

  	
   

  	
  FORM OF
  CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT 

  TO RULE 144A

  
	
  Exhibit D

  	
   

  	
  FORM OF
  CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT 

  TO REGULATION S

  



 


v

















 


This Indenture, dated as of May 5, 2010, is by
and among KEMET Corporation, a Delaware corporation (the “Issuer”),
the Guarantors (as defined herein) and Wilmington Trust Company, as trustee
(the “Trustee”).


 


Each party agrees as follows for the benefit of the
other parties and for the equal and ratable benefit of the holders of (i) the
Issuer’s 101⁄2% Senior Notes due 2018 issued on the date hereof that contain the
restrictive legend in Exhibit A (the “Initial
Notes”), (ii) Exchange Notes issued in exchange for the Initial
Notes pursuant to the Registration Rights Agreement or pursuant to an effective
registration statement under the Securities Act without the restrictive legends
in Exhibit A (the “Exchange Notes”)
and (iii) Additional Notes issued from time to time as either Initial
Notes or Exchange Notes (together with the Initial Notes, the “Notes”).


 


ARTICLE
I


 


DEFINITIONS
AND INCORPORATION BY REFERENCE


 


SECTION 1.1                                             Definitions.


 


“Acquired Debt”
means Debt (i) of a Person (including an Unrestricted Subsidiary) existing
at the time such Person becomes a Restricted Subsidiary or (ii) assumed in
connection with the acquisition of assets from such Person.  Acquired Debt shall be deemed to have been Incurred,
with respect to clause (i) of the preceding sentence, on the date such
Person becomes a Restricted Subsidiary and, with respect to clause (ii) of
the preceding sentence, on the date of consummation of such acquisition of
assets.


 


“Additional Interest”
means all additional interest owing on the Notes pursuant to the Registration
Rights Agreement.


 


“Additional Notes”
means Notes (other than the Initial Notes on the Issue Date) issued pursuant to
Article II hereof and otherwise in compliance with the provisions of this
Indenture.


 


“Affiliate” of
any Person means any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such Person.  For the purposes of this definition, “control”
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms “controlling”
and “controlled” have meanings that correspond to the foregoing.  For purposes of Section 4.11, (i) any
Person directly or indirectly owning 10% or more of the outstanding Voting
Interests of any other Person will be deemed to be an Affiliate of such other
Person and (ii) any Person who is a Permitted Holder will be deemed to be
an Affiliate of the Issuer.


 


“Agent” means
any Registrar, Paying Agent (so long as the Trustee serves in such capacity),
or co-registrar.


 


“Applicable Premium”  means, with respect to any Note on any redemption date, the
greater of (i) 1.0% of the principal amount of such Note and (ii) the
excess, if any, of: (1) the present value at such redemption date of (A) the
Redemption Price of such Note on May 1, 2014 (such Redemption Price being
set forth in the table appearing in Section 3.7(b)) plus (B) all
required interest payments due on such Note during the period from such
redemption date through May 1, 2014 (excluding accrued but unpaid
interest), computed using a discount rate equal to the Treasury Rate as of such
redemption date plus 50 basis points over (2) the principal amount of such
Note.


 

















 


“Asset Acquisition” means:


 


(a)           an
Investment by the Issuer or any Restricted Subsidiary in any other Person pursuant
to which such Person shall become a Restricted Subsidiary or shall be merged
with or into the Issuer or any Restricted Subsidiary; or


 


(b)           the
acquisition by the Issuer or any Restricted Subsidiary of the assets of any Person
which constitute all or substantially all of the assets of such Person, any
division or line of business of such Person or any other properties or assets
of such Person other than in the ordinary course of business and consistent
with past practices.


 


“Asset Sale”
means any transfer, conveyance, sale, lease or other disposition (including,
without limitation, dispositions pursuant to any consolidation or merger) by
the Issuer or any of its Restricted Subsidiaries to any Person (other than to
the Issuer or one or more of its Restricted Subsidiaries) in any single
transaction or series of transactions of:


 


(i)            Capital
Interests in another Person (other than directors’ qualifying shares or shares
or interests required to be held by foreign nationals pursuant to local law);
or


 


(ii)           any
other property or assets (other than in the normal course of business, including
any sale or other disposition of obsolete or permanently retired equipment);


 


provided, however, that the term “Asset Sale” shall exclude:


 


(a)           a
transaction that constitutes a Change of Control Triggering Event or any asset
disposition permitted by Section 5.1 that constitutes a disposition of all
or substantially all of the assets of the Issuer and its Restricted
Subsidiaries taken as a whole;


 


(b)           any
transfer, conveyance, sale, lease or other disposition of property or assets, including
Capital Interests, the gross proceeds of which (exclusive of indemnities) do
not exceed in any one or related series of transactions $5.0 million;


 


(c)           sales
or other dispositions of cash or Eligible Cash Equivalents;


 


(d)           sales
of interests in Unrestricted Subsidiaries;


 


(e)           the
sale and leaseback of any assets within 90 days of the acquisition thereof;


 


(f)            the
disposition of assets that, in the good faith judgment of the Board of
Directors of the Issuer, are surplus or are no longer used or useful in the
business of such entity;


 


(g)           a
Restricted Payment or Permitted Investment that is otherwise permitted by this
Indenture;


 


(h)           any
trade-in of equipment in exchange for other equipment; provided that in the
good faith judgment of the Issuer, the Issuer or such Restricted Subsidiary
receives equipment having a Fair Market Value equal to or greater than the
equipment being traded in;


 


(i)            the
creation of a Lien (but not the sale or other disposition of the property
subject to such Lien);


 


2

















 


(j)            leases
or subleases in the ordinary course of business to third persons not interfering
in any material respect with the business of the Issuer or any of its
Restricted Subsidiaries and otherwise in accordance with the provisions of this
Indenture;


 


(k)           any
disposition by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted
Subsidiary to a Restricted Subsidiary that is a Guarantor;


 


(l)            dispositions
of accounts receivable in connection with the collection or compromise thereof
in the ordinary course of business and consistent with past practice;


 


(m)          licensing
of intellectual property in accordance with industry practice in the ordinary
course of business;


 


(n)           any
transfer of accounts receivable, or a fractional undivided interest therein, by
a Receivable Subsidiary in a Qualified Receivables Transaction; or


 


(o)           sales
of accounts receivable to a Receivable Subsidiary pursuant to a Qualified
Receivables Transaction for the Fair Market Value thereof, including cash in an
amount at least equal to 75% of the Fair Market Value thereof (for the purposes
of this clause (o), Purchase Money Notes will be deemed to be cash).


 


For purposes of this definition, any series of
related transactions that, if effected as a single transaction, would
constitute an Asset Sale shall be deemed to be a single Asset Sale effected
when the last such transaction which is a part thereof is effected.


 


“Asset Sale Offer”
means an Offer to Purchase required to be made by the Issuer pursuant to Section 4.10
to all Holders.


 


“Attributable Debt”
in respect of a Sale and Leaseback Transaction means, at the time of determination,
the present value (discounted at the rate of interest implicit in such
transaction) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such Sale and Leaseback Transaction
(including any period for which such lease has been or may be extended).


 


“Authorization Letter”
means the Authorization Letter, dated May 5, 2010, among the Initial
Purchasers and the Collateral Agent.


 


“Average Life”
means, as of any date of determination, with respect to any Debt, the quotient
obtained by dividing (i) the sum of the products of (x) the number of
years from the date of determination to the dates of each successive scheduled
principal payment (including any sinking fund or mandatory redemption payment
requirements) of such Debt multiplied by (y) the amount of such principal
payment by (ii) the sum of all such principal payments.


 


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


 


“Board of Directors”
means (i) with respect to the Issuer, its board of directors, (ii) with
respect to a corporation, the board of directors of such corporation, (iii) with
respect to a limited liability company, the board of managers of such limited
liability company, (iv) with respect to a partnership, the board of
directors of the general partner of such partnership and (v) with respect
to any other entity, the functional equivalent of the foregoing in respect of
such entity or, in each case, any duly authorized committee thereof.


 


3
















 


“Board Resolution”
means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Issuer or any Restricted Subsidiary to have been duly adopted
by the Board of Directors, unless the context specifically requires that such
resolution be adopted by a majority of the Disinterested Directors, in which
case by a majority of such Disinterested Directors, and to be in full force and
effect on the date of such certification and delivered to the Trustee.


 


“Business Day”
means any day other than a Legal Holiday.


 


“Capital Interests”
in any Person means any and all shares, interests (including Preferred
Interests), participations or other equivalents in the equity interest (however
designated) in such Person and any rights (other than debt securities
convertible into an equity interest), warrants or options to acquire an equity
interest in such Person.


 


“Capital Lease Obligations”
means any obligation under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP; and the amount of Debt
represented by such obligation shall be the capitalized amount of such
obligations determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be terminated by
the lessee without payment of a penalty. 
For purposes of Section 4.12, a Capital Lease Obligation shall be
deemed secured by a Lien on the property being leased.


 


“Certificated Notes”
means Notes in certificated form that are in the form of Exhibit A
attached hereto.


 


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


 


(a)           the
Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of
the Exchange Act, proxy, vote, written notice or otherwise) that 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
ultimate “beneficial owner” (as such term is used in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause (a) such
person or group shall be deemed to have “beneficial ownership” of all shares
that any such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the Voting Interests in the Issuer; or


 


(b)           the
Issuer or any Restricted Subsidiary sells, conveys, transfers or leases (either
in one transaction or a series of related transactions) all or substantially
all of the assets of the Issuer and its Restricted Subsidiaries (determined on
a consolidated basis) to any Person, or the Issuer merges or consolidates with,
a Person other than (x) a Restricted Subsidiary of the Issuer or (y) a
Successor Entity in which a majority or more of the voting power of the Voting
Interests is held by the Permitted Holders.


 


“Change of Control
Triggering Event” means the occurrence of both a Change of Control
and a Ratings Event.


 


“Code” means the
Internal Revenue Code of 1986, as amended from time to time, and the regulations
promulgated thereunder.


 


“Collateral”
means all of the Pledged Equity (as such term is defined in the Pledge
Agreement), Trust Monies, if any, and all other property of whatever kind or
nature subject or purported to be subject from time to time to the Lien of any
Security Document.


 


4

















 


“Collateral Account”
means the collateral account established pursuant to this Indenture and the
Security Documents.


 


“Collateral
Agent” means Wilmington Trust Company or other financial institution
or entity which, in the determination of the Issuer is acceptable and may
include, without limitation, an entity affiliated with the initial purchasers,
any lenders or an entity affiliated with the lenders under any Credit Facility
or an affiliate thereof, in any case, not in its individual capacity but solely
as Collateral Agent under the Security Documents.


 


“Commission”
means the U.S. Securities and Exchange Commission and any successor thereto.


 


“Common Interests”
of any Person means Capital Interests in such Person that do not rank prior, as
to the payment of dividends or as to the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of such Person,
to Capital Interests of any other class in such Person.


 


“Consolidated Cash Flow
Available for Fixed Charges” means, with respect to any Person for
any period:


 


(a)           the
sum of, without duplication, the amounts for such period, taken as a single
accounting period, of:


 


(i)           Consolidated Net Income;


 


(ii)           Consolidated Non-cash Charges;


 


(iii)           Consolidated Interest Expense to the
extent the same was deducted in computing Consolidated Net Income;


 


(iv)           Consolidated Income Tax Expense
(other than income tax expense (either positive or negative) attributable to
extraordinary gains or losses);


 


(v)          any expenses or charges related to any
equity offering, Permitted Investment, recapitalization or Debt permitted to be
Incurred by this Indenture (whether or not successful) or related to the offering
of the Initial Notes;


 


(vi)           facility closure and severance costs
and charges;


 


(vii)           restructuring expenses and charges;


 


(viii)            acquisition integration expenses and
charges; and


 


(ix)            the Historical Costs and Expenses;
and


 


(b)           less non-cash items increasing Consolidated Net Income for
such period, other than (i) the accrual of revenue consistent with past
practice, and (ii) reversals of prior accruals or reserves for cash items
previously excluded in the calculation of Consolidated Non-cash Charges.


 


“Consolidated Fixed Charge
Coverage Ratio” means, with respect to any Person, the ratio of the
aggregate amount of Consolidated Cash Flow Available for Fixed Charges of such
Person for 


 


5

















 


the four full fiscal
quarters, treated as one period, for which financial information in respect
thereof is available immediately preceding the date of the transaction (the “Transaction Date”) giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio (such four full fiscal quarter period
being referred to herein as the “Four Quarter Period”)
to the aggregate amount of Consolidated Fixed Charges of such Person for the
Four Quarter Period.  For purposes of
this definition, Consolidated Cash Flow Available for Fixed Charges and Consolidated
Fixed Charges shall be calculated after giving effect, on a pro forma basis for
the period of such calculation, to:


 


(a)           the
Incurrence of any Debt (other than working capital borrowings under any revolving
credit facility in the ordinary course of business) of the Issuer or any
Restricted Subsidiary (and the application of the proceeds thereof) and any
repayment of other Debt (other than working capital borrowings under any
revolving credit facility in the ordinary course of business) 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
or repayment, as the case may be (and the application of the proceeds thereof),
occurred on the first day of the Four Quarter Period; and


 


(b)           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 Asset Acquisition) Incurring Acquired
Debt and also including any Consolidated Cash Flow Available for Fixed Charges
associated with any such Asset Acquisition or Asset Sale) 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 Debt or Acquired Debt) occurred on the first day of the Four
Quarter Period.


 


For purposes of this definition, pro forma
calculations shall be made in accordance with Article 11 of
Regulation S-X, except that such pro forma calculations may also include
operating expense reductions for such period resulting from any Asset Sale or
other dispositions or Asset Acquisition, investment, merger, consolidation or
discontinued operation (as determined in accordance with GAAP) for which pro
forma effect is being given that (A) have been realized or (B) for
which steps have been taken or are reasonably expected to be taken within six
months of the date of such transaction and are supportable and quantifiable
and, in each case, including, but not limited to, (a) reduction in
personnel expenses, (b) reduction of costs related to administrative
functions, (c) reduction of costs related to leased or owned properties
and (d) reductions from the consolidation of operations and streamlining
of corporate overhead, provided that, in either case, such adjustments are set
forth in an Officers’ Certificate signed by the Issuer’s principal financial
officer and one other Officer of the Issuer that states (i) the amount of
such adjustment or adjustments and (ii) that such adjustment or
adjustments are based on the reasonable good faith belief of the Officers executing
such Officers’ Certificate at the time of such execution.


 


In calculating Consolidated Fixed Charges for
purposes of determining the denominator (but not the numerator) of this
Consolidated Fixed Charge Coverage Ratio:


 


(i)          interest on outstanding Debt 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 Debt in effect on the Transaction Date;


 


(ii)          if interest on any Debt 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


 


6

















 


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


 


(iii)          notwithstanding clause (i) or (ii) above,
interest on Debt 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 Fixed Charges”
means, with respect to any Person for any period, the sum of, without
duplication, the amounts for such period of:


 


(a)           Consolidated
Interest Expense; and


 


(b)           the
product of (i) all dividends and other distributions paid or accrued
during such period in respect of Redeemable Capital Interests of such Person
and its Restricted Subsidiaries, times (ii) a
fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in each case,
determined on a consolidated basis in accordance with GAAP.


 


“Consolidated Income Tax
Expense” means, with respect to any Person for any period, the
provision for federal, state, local and foreign income taxes of such Person and
its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.


 


“Consolidated Interest
Expense” means, with respect to any Person for any period, without
duplication, the sum of:


 


(a)          the interest expense of such Person and its Restricted
Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP, including, without limitation:


 


(i)            any
amortization of debt discount;


 


(ii)           the
net cost under Hedging Obligations related to interest rates (including any
amortization of discounts);


 


(iii)          the
interest portion of any deferred payment obligation;


 


(iv)          all
commissions, discounts and other fees and charges owed with respect to letters
of credit, bankers’ acceptance financing or similar activities; and


 


(v)           all
accrued interest;


 


(b)         the interest component of Capital Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period determined on a consolidated basis
in accordance with GAAP;


 


(c)          the interest expense on any Debt guaranteed by such Person
and its Restricted Subsidiaries; and


 


(d)         all capitalized interest of such Person and its Restricted
Subsidiaries for such period;


 


7

















 


less interest
income of such Person and its Restricted Subsidiaries for such period; provided, however, that
Consolidated Interest Expense will exclude the amortization or write off of
debt issuance costs and deferred financing fees, commissions, fees and
expenses.


 


“Consolidated Net Income”
means, with respect to any Person, for any period, the consolidated net income
(or loss) of such Person and its Restricted Subsidiaries for such period as
determined in accordance with GAAP, adjusted, to the extent included in
calculating such net income, by excluding, without duplication,


 


(i)          all extraordinary gains or losses (net of fees and expense
relating to the transaction giving rise thereto), income, expenses or charges;


 


(ii)          the portion of net income of such Person and its Restricted
Subsidiaries allocable to minority interest in unconsolidated Persons or
Investments in Unrestricted Subsidiaries to the extent that cash dividends or
distributions have not actually been received by such Person or one of its Restricted
Subsidiaries;


 


(iii)          gains or losses in respect of any Asset Sales by such
Person or one of its Restricted Subsidiaries (net of fees and expenses relating
to the transaction giving rise thereto), on an after-tax basis;


 


(iv)          the net income (loss) from any disposed or discontinued
operations or any net gains or losses on disposed or discontinued operations,
on an after-tax basis;


 


(v)         solely for purposes of determining the amount available for
Restricted Payments under clause (c) of the first paragraph of Section 4.7,
the net income of any Restricted Subsidiary (other than a Guarantor) of such
Person to the extent that the declaration of dividends or similar distributions
by that Restricted Subsidiary of that income is not at the time permitted,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its
stockholders;


 


(vi)          any gain or loss realized as a result of the cumulative
effect of a change in accounting principles;


 


(vii)          any fees and expenses paid in connection with the issuance
of the Notes;


 


(viii)          non-cash compensation expense incurred
with any issuance of equity interests to an employee of such Person or any
Restricted Subsidiary;


 


(ix)          any net after-tax gains or losses attributable to the early
extinguishment of Debt;


 


(x)          any non-cash impairment charges or asset write-off or
write-down recorded in accordance with GAAP;


 


(xi)          any non-cash losses and expenses resulting from changes in
the exercise price of the warrant issued to K Financing, LLC in June 2009,
and subsequently transferred to K Equity, LLC, an affiliate of K Financing,
LLC, to purchase shares of the Issuer’s common stock;


 


(xii)           non-cash gains, losses, income and expenses resulting from
fair value accounting required by GAAP; and


 


8

















 


(xiii)           any foreign currency translation
gains or losses.


 


“Consolidated Non-cash
Charges” means, with respect to any Person for any period, the aggregate
depreciation, amortization (including amortization of goodwill and other
intangibles) and other non-cash expenses of such Person and its Restricted
Subsidiaries reducing Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP (excluding any such charges constituting an extraordinary item or
loss and excluding any charges constituting an extraordinary item or loss or
any charge which requires an accrual of or a reserve for cash charges for any
future period).


 


“Corporate Trust Office of
the Trustee” shall be at the address of the Trustee specified in Section 13.2
hereof or such other address as to which the Trustee may give notice to the
Issuer.


 


“Credit Facility”  means, collectively, one or more debt facilities or other
financing arrangements with banks or other lenders providing for revolving
credit loans, term loans, letters of credit or overdraft or factoring
facilities, in each case, as amended, refinanced or otherwise restructured, in
whole or in part from time to time, including by or pursuant to any agreement
or instrument that increases the amount of available borrowings thereunder or
adds Subsidiaries of the Issuer as additional borrowers or guarantors
thereunder, in each case with respect to 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.


 


“Debt” means at
any time (without duplication), with respect to any Person, whether recourse is
to all or a portion of the assets of such Person, or non-recourse, and whether
or not contingent, the following: (i) all indebtedness of such Person for
money borrowed or for the deferred purchase price of property, excluding any
trade payables or other current liabilities incurred in the normal course of
business; (ii) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments; (iii) all obligations of
such Person with respect to letters of credit (other than letters of credit
that are secured by cash or Eligible Cash Equivalents), bankers’ acceptances or
similar facilities issued for the account of such Person; (iv) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property or assets acquired by such Person
(even if the rights and remedies of the seller or lender under such agreement
in the event of default are limited to repossession or sale of such property or
assets); (v) all Capital Lease Obligations of such Person; (vi) the
maximum fixed redemption or repurchase price of Redeemable Capital Interests in
such Person (or, if such Person is not the Issuer or a Guarantor, the maximum
fixed redemption or repurchase price of any Preferred Interests in such Person)
at the time of determination; (vii) any Hedging Obligations of such Person
at the time of determination; (viii) Attributable Debt with respect to any
Sale and Leaseback Transaction to which such Person is a party; and (ix) all
obligations of the types referred to in clauses (i) through (viii) of
this definition of another Person and all dividends and other distributions of
another Person, the payment of which, in either case, (A) such Person has
Guaranteed or (B) is secured by (or the holder of such Debt or the recipient
of such dividends or other distributions has an existing right, whether
contingent or otherwise, to be secured by) any Lien upon the property or other
assets of such Person, even though such Person has not assumed or become liable
for the payment of such Debt, dividends or other distributions.  For purposes of the foregoing:  (a) the maximum fixed redemption or
repurchase price of any Redeemable Capital Interests or Preferred Interests
that do not have a fixed redemption or repurchase price shall be calculated in
accordance with the terms of such Redeemable Capital Interests or such
Preferred Interests as if such Redeemable Capital Interests or such Preferred
Interests were redeemed or repurchased on any date on which Debt shall be
required to be determined pursuant to this Indenture; provided, however,  that, if such
Redeemable Capital Interests or such Preferred Interests are not then permitted
to be redeemed or repurchased, the redemption or repurchase price shall be the
book value of such Redeemable Capital Interests


 


9

















 


or such Preferred Interests;
(b) the amount of Debt of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and
the maximum liability, upon the occurrence of the contingency giving rise to
the obligations, of any contingent obligations at such date; provided, however,  that the amount outstanding at any time of any Debt issued
with original issue discount is the principal amount of such Debt less the
remaining unamortized portion of the original issue discount of such Debt at
such time as determined in conformity with GAAP, but such Debt shall be deemed
Incurred only as of the date of original issuance thereof; (c) the amount
of any Debt described in clause (ix)(A) above shall be the maximum
liability under any such Guarantee; (d) the amount of any Debt described
in clause (ix)(B) above shall be the lesser of (I) the maximum amount
of the obligations so secured and (II) the Fair Market Value of such
property or other assets; and (e) interest, fees, premium, and expenses
and additional payments, if any, will not constitute Debt.


 


Notwithstanding the foregoing, in connection with
the purchase by the Issuer or any Restricted Subsidiary of any business, the
term “Debt” will exclude (x) customary indemnification obligations and (y) post-closing
payment adjustments to which the seller may become entitled to the extent such
payment is determined by a final closing balance sheet or such payment is
otherwise contingent; provided, however,  that, such
amount would not be required to be reflected on the face of a balance sheet
prepared in accordance with GAAP.


 


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


 


“Depositary”
means, with respect to the Notes issuable or issued in whole or in part in
global form, the Person specified in Section 2.3 hereof as the Depositary
with respect to the Notes, until a successor shall have been appointed and
become such pursuant to Section 2.6 hereof, and, thereafter, “Depositary”
shall mean or include such successor.


 


“Designated
Non-cash Consideration” means the Fair Market Value of non-cash
consideration received by the Issuer or a Restricted Subsidiary in connection
with an Asset Sale that is so designated as Designated Non-cash Consideration
pursuant to an Officers’ Certificate, setting forth the basis of such
valuation, executed by the principal financial officer and another officer of
the Issuer, less the amount of cash or Eligible Cash Equivalents received in
connection with a subsequent sale of or collection on such Designated Non-cash
Consideration.


 


“Disinterested Director”
means, with respect to any proposed transaction between (i) the Issuer or
a Restricted Subsidiary, as applicable, and (ii) an Affiliate thereof
(other than the Issuer or a Restricted Subsidiary), a member of the Board of
Directors of the Issuer or such Restricted Subsidiary, as applicable, who would
not be a party to, or have a financial interest in, such transaction and is not
an officer, director or employee of, and does not have a financial interest in,
such Affiliate.  For purposes of this
definition, no person would be deemed not to be a Disinterested Director solely
because such person holds Capital Interests in the Issuer or is an employee of
the Issuer.


 


“Domestic Restricted
Subsidiary” means any Restricted Subsidiary that is formed or otherwise
incorporated in the United States or a State thereof or the District of
Columbia or that Guarantees or otherwise provides direct credit support for any
Debt of the Issuer.


 


“DTC” means The
Depository Trust Company.


 


“Eligible Bank”
means a bank or trust company that (i) is organized and existing under the
laws of the United States of America, or any state, territory or possession
thereof, or any country that is a member of the Organization for Economic
Cooperation and Development, (ii) as of the time of the


 


10

















 


making or acquisition of an
Investment in such bank or trust company, has combined capital and surplus in
excess of $250.0 million and (iii) the senior Debt of which is rated at
least “A-2” by Moody’s or at least “A” by Standard & Poor’s (or an
equivalent rating from a comparable foreign rating agency).


 


“Eligible Cash Equivalents”
means any of the following Investments:  (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that
the full faith and credit of the United States is pledged in support thereof)
maturing not more than one year after the date of acquisition; (ii) time
deposits in and certificates of deposit of any Eligible Bank, provided that such Investments have a maturity date not more
than two years after date of acquisition and that the Average Life of all such
Investments is one year or less from the respective dates of acquisition; (iii) repurchase
obligations with a term of not more than 180 days for underlying securities of
the types described in clause (i) above entered into with any Eligible
Bank; (iv) direct obligations issued by any state of the United States or
any political subdivision or public instrumentality thereof, or any country
that is a member of the Organization for Economic Cooperation and Development, provided that such Investments mature, or are subject to
tender at the option of the holder thereof, within 365 days after the date of
acquisition and, at the time of acquisition, have a rating of at least “A” from
Standard & Poor’s or “A-2” from Moody’s (or an equivalent rating by
any other nationally recognized rating agency or a comparable foreign rating
agency); (v) commercial paper of any Person other than an Affiliate of the
Issuer and other than structured investment vehicles, provided that
such Investments have a rating of at least “P-2” by Moody’s or at least “A-2”
by Standard & Poor’s and mature within 180 days after the date of
acquisition; (vi) overnight and demand deposits in and bankers’
acceptances of any Eligible Bank and demand deposits in any bank or trust
company to the extent insured by the Federal Deposit Insurance Corporation
against the Bank Insurance Fund; (vii) money market funds substantially
all of the assets of which comprise Investments of the types described in
clauses (i) through (vi); and (viii) instruments equivalent to those
referred to in clauses (i) through (vi) above or funds equivalent to
those referred to in clause (vii) above denominated in Euros or any other
foreign currency comparable in credit quality and tender to those referred to
in such clauses and customarily used by corporations for cash management
purposes in jurisdictions outside the United States to the extent reasonably
required in connection with any business conducted by any Restricted Subsidiary
organized in such jurisdiction, all as determined in good faith by the Issuer.


 


“ERISA” means
the Employee Retirement Income Security Act of 1974 and all rules and
regulations from time to time promulgated thereunder.


 


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


 


“Exchange Notes”
has the meaning set forth in the preamble hereto.


 


“Exchange Offer”
means an offer that may be made by the Issuer pursuant to the Registration
Rights Agreement to exchange Notes bearing the Restricted Notes Legend for the
Exchange Notes.


 


“Exchange Offer
Registration Statement” has the meaning given to such term in the Registration
Rights Agreement.


 


“Expiration Date”
has the meaning set forth in the definition of “Offer to Purchase.”


 


“Fair Market Value”
means, with respect to any asset or the consideration received or paid in any
transaction or series of transactions, the fair market value thereof as determined
in good faith by the Board of Directors of the Issuer.  In the case of a transaction between the
Issuer or a Restricted Subsidiary, on the one hand, and a Receivable
Subsidiary, on the other hand, if the Board of Directors of


 


11

















 


the Issuer determines in its
sole discretion that such determination is appropriate, a determination as to
Fair Market Value may be made at the commencement of the transaction and be
applicable to all dealings between the Receivable Subsidiary and the Issuer or
such Restricted Subsidiary during the course of such transaction.


 


“Foreign Law Security Documents” means the
Singapore law-governed Share Charge between the Collateral Agent and Kemet
Electronics Corporation, the Mexican law-governed Stock Pledge Agreement among
Kemet Electronics Corporation, the Collateral Agent and Kemet de
México, S.A. de C.V. and the Italian Pledge Agreement, each being
executed in connection with the issuance of the Notes pursuant to this Indenture.


 


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


 


“Four Quarter Period”
has the meaning set forth in the definition of “Consolidated Fixed Charge
Coverage Ratio.”


 


“GAAP” means
generally accepted accounting principles in the United States, consistently
applied, as 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, which are in effect
from time to time.


 


“Global Note Legend”
means the legend identified as such in Exhibit A hereto.


 


“Global Notes”
means the Notes in global form that are in the form of Exhibit A
hereto.


 


“Guarantee”
means, as applied to any Debt of another Person, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the normal
course of business), direct or indirect, in any manner, of any part or all of
such Debt, (ii) any direct or indirect obligation, contingent or
otherwise, of a Person guaranteeing or having the effect of guaranteeing the
Debt of any other Person in any manner and (iii) an agreement of a Person,
direct or indirect, contingent or otherwise, the practical effect of which is
to assure in any way the payment or performance (or payment of damages in the
event of non-payment or non-performance) of all or any part of such Debt of
another Person (and “Guaranteed” and
“Guaranteeing” shall have meanings that
correspond to the foregoing).


 


“Guarantor”
means any Person that executes this Indenture as a Guarantor or executes a Note
Guarantee or supplemental indenture in accordance with the provisions of this
Indenture and their respective successors and assigns.


 


“Hedging Obligations”
of any Person means the obligations of such Person pursuant to any interest
rate agreement, currency agreement or commodity agreement.


 


“Historical Costs and
Expenses” means public company costs, merger and proxy related
expenses, workers’ compensation reserve adjustments, legal settlements and
historical costs associated with closed facilities to the extent incurred prior
to the Issue Date and, in each case, on a basis consistent with the calculation
of Adjusted EBITDA as set forth in the Offering Memorandum.


 


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


 


12

















 


“Immaterial Subsidiary”  means, as of any date, any
Restricted Subsidiary whose total assets, as of such date, are less than
$100,000 and whose total revenues for the most recent 12-month period do not
exceed $100,000; provided that a
Restricted Subsidiary will not be considered to be an Immaterial Subsidiary if
it, directly or indirectly, Guarantees or otherwise provides direct credit
support for any Debt of the Issuer.


 


“Incur” means,
with respect to any Debt or other obligation of any Person, to create, issue,
incur (by conversion, exchange or otherwise), assume, Guarantee or otherwise
become liable in respect of such Debt or other obligation or the recording, as
required pursuant to GAAP or otherwise, of any such Debt or other obligation on
the balance sheet of such Person; provided, however, that a change in GAAP that results in an obligation
of such Person that exists at such time becoming Debt shall not be deemed an
Incurrence of such Debt.  Debt otherwise
Incurred by a Person before it becomes a Subsidiary of the Issuer shall be
deemed to be Incurred at the time at which such Person becomes a Subsidiary of
the Issuer.  “Incurrence,”
“Incurred,” “Incurrable”
and “Incurring” shall have meanings that
correspond to the foregoing.  A Guarantee
by the Issuer or a Restricted Subsidiary of Debt Incurred by the Issuer or a
Restricted Subsidiary, as applicable, shall not be a separate Incurrence of
Debt.  In addition, the following shall
not be deemed a separate Incurrence of Debt:


 


(1)           amortization
of debt discount or accretion of principal with respect to a non-interest bearing
or other discount security;


 


(2)           the
payment of regularly scheduled interest in the form of additional Debt of the
same instrument or the payment of regularly scheduled dividends on Capital Interests
in the form of additional Capital Interests of the same class and with the same
terms;


 


(3)           the
obligation to pay a premium in respect of Debt arising in connection with the
issuance of a notice of redemption or making of a mandatory offer to purchase
such Debt; and


 


(4)           unrealized
losses or charges in respect of Hedging Obligations.


 


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


 


“Initial Notes”
has the meaning set forth in the preamble hereto.


 


“Initial Purchasers”  means Banc of America Securities LLC, KeyBanc Capital
Markets Inc., UBS Securities LLC and such other initial purchasers, if any,
party to the Purchase Agreement entered into in connection with the offer and
sale of the Initial Notes on the Issue Date.


 


“Intercreditor Agreement” means an
intercreditor agreement among the Collateral Agent, the collateral agent (or
entity performing a similar function) under a Credit Facility and any other
parties thereto that provides for the allocation of rights among the Collateral
Agent and such collateral agent (or other entity) under such Credit Facility
with respect to their respective interests in the Collateral and the
enforcement provisions relating thereto, in form and substance satisfactory to
the Collateral Agent.


 


“Investment” by
any Person means any direct or indirect loan, advance (or other extension of
credit) or capital contribution to (by means of any transfer of cash or other
property or assets to another Person or any other payments for property or
services for the account or use of another Person) another Person, including,
without limitation, the following:  (i) the
purchase or acquisition of any Capital Interest or other evidence of beneficial
ownership in another Person; (ii) the purchase, acquisition or Guarantee
of the obligations of another Person or the issuance of a “keep-well” with
respect thereto; and (iii) the purchase or acquisition of the business or
assets of another Person, but shall exclude: 
(a) accounts


 


13
















 


receivable and other
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices; (b) the acquisition of property and assets from
suppliers and other vendors in the normal course of business; (c) prepaid
expenses and workers’ compensation, utility, lease and similar deposits, in the
normal course of business; and (d) commission, travel and similar advances
to officers and employees in the ordinary course of business.


 


“Investment Grade Rating”
means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and
BBB- (or the equivalent) by Standard & Poor’s, or, in either case, an
equivalent rating by any other Rating Agency.


 


“Issue Date”
means May 5, 2010, the date on which the initial $230.0 million in aggregate
principal amount of the Notes is originally issued under this Indenture.


 


“Issuer” has the
meaning set forth in the preamble hereto until a successor replaces it in
accordance with the applicable provisions of this Indenture and, thereafter,
means the successor.


 


“Italian Pledge Agreement”
means the Pledge Agreement Over Shares to be entered into among Kemet
Electronics Corporation and the Collateral Agent.


 


“Legal Holiday”
means a Saturday, a Sunday or a day on which banking institutions in The City
of New York, the city in which the principal Corporate Trust Office of the
Trustee is located or at a place of payment are authorized or required by law,
regulation or executive order to remain closed. 
If a payment date in a place of payment is a Legal Holiday, payment
shall 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.


 


“Lien” means,
with respect to any property or other asset, any mortgage, deed of trust, deed
to secure debt, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien (statutory or otherwise), charge, easement,
encumbrance, preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever on or with respect to such
property or other asset (including, without limitation, any conditional sale or
other title retention agreement having substantially the same economic effect
as any of the foregoing).


 


“Moody’s” means Moody’s Investors Service, Inc., and any
successor to its rating agency business.


 


“Net Cash Proceeds”
means, with respect to Asset Sales of any Person, cash and Eligible Cash
Equivalents received, net of:  (i) all
reasonable out-of-pocket costs and expenses of such Person incurred in
connection with such a sale, including, without limitation, all legal,
accounting, title and recording tax expenses, commissions and other fees and expenses
incurred and all federal, state, foreign and local taxes arising in connection
with such an Asset Sale that are paid or required to be accrued as a liability
under GAAP by such Person; (ii) except in the case of Liens ranking junior
to the Note Liens, all payments made by such Person on any Debt that is secured
by such properties or other assets in accordance with the terms of any Lien
upon or with respect to such properties or other assets or that must, by the
terms of such Lien or such Debt, or in order to obtain a necessary consent to
such transaction or by applicable law, be repaid to any other Person (other
than the Issuer or a Restricted Subsidiary thereof) in connection with such
Asset Sale; and (iii) all contractually required distributions and other
payments made to minority interest holders in Restricted Subsidiaries of such
Person as a result of such transaction; provided, however,  that:  (a) in the event that any consideration
for an Asset Sale (which would otherwise constitute Net Cash Proceeds) is
required by (I) contract to be held in escrow pending determination of
whether a purchase price adjustment will be made or (II) GAAP to be
reserved against other liabilities in connection with such Asset Sale, such
consideration (or any portion thereof) shall become Net Cash


 


14

















 


Proceeds only at such time
as it is released to such Person from escrow or otherwise; and (b) any
non-cash consideration (including Designated Non-cash Consideration) received
in connection with any transaction, which is subsequently converted to cash or
Eligible Cash Equivalents, shall become Net Cash Proceeds only at such time as
it is so converted.


 


“Non-Recourse Receivable
Subsidiary Indebtedness” has the meaning set forth in the definition
of “Receivable Subsidiary.”


 


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


 


“Note Guarantee”
means any guarantee of the Notes by any Guarantor pursuant to this Indenture.


 


“Note  Liens”  means all
Liens in favor of the Collateral Agent on Collateral securing the Note Obligations.


 


“Note Obligations”  means the Debt Incurred and Obligations under the Senior
Note Documents.


 


“Notes” has the
meaning set forth in the preamble to this Indenture.


 


“Obligations”
means any principal, premium, interest (including any interest accruing
subsequent to the filing of a petition in bankruptcy, reorganization or similar
proceeding at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable state,
federal or foreign law), penalties, fees, indemnifications, reimbursements
(including reimbursement obligations with respect to letters of credit and
banker’s acceptances), damages and other liabilities, and guarantees of payment
of such principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities, payable under the documentation governing any
Debt.


 


“Offer” has the
meaning set forth in the definition of “Offer to Purchase.”


 


“Offer to Purchase”
means a written offer (the “Offer”) sent by
the Issuer by electronic transmission or by first class mail (or such other
means reasonably likely to be delivered faster than first class mail), postage
prepaid, to each Holder at his address appearing in the Note Register on the
date of the Offer, offering to purchase up to the aggregate principal amount of
Notes set forth in such Offer at the purchase price set forth in such Offer (as
determined pursuant to this Indenture). 
Unless otherwise required by applicable law, the Offer shall specify an
expiration date (the “Expiration Date”)
of the Offer to Purchase which shall be, subject to any contrary requirements
of applicable law, not less than 30 days or more than 60 days after the date of
mailing of such Offer and a settlement date (the “Purchase
Date”) for purchase of Notes within five Business Days after the
Expiration Date.  The Issuer shall notify
the Trustee at least 15 days (or such shorter period as is acceptable to the
Trustee) prior to the mailing of the Offer of the Issuer’s obligation to make
an Offer to Purchase, and the Offer shall be mailed by the Issuer or, at the
Issuer’s request, by the Trustee in the name and at the expense of the
Issuer.  The Offer shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Offer to Purchase.  The
Offer shall also state:


 


(1)           the
Section of this Indenture pursuant to which the Offer to Purchase is being
made;


 


(2)           the
Expiration Date and the Purchase Date;


 


15

















 


(3)           the
aggregate principal amount of the outstanding Notes offered to be purchased
pursuant to the Offer to Purchase (including, if less than 100%, the manner by
which such amount has been determined pursuant to Indenture covenants requiring
the Offer to Purchase) (the “Purchase Amount”);


 


(4)           the
purchase price to be paid by the Issuer for each $1,000 principal amount of
Notes accepted for payment (as specified pursuant to this Indenture) (the “Purchase Price”);


 


(5)           that
the Holder may tender all or any portion of the Notes registered in the name of
such Holder and that any portion of a Note tendered must be tendered in a minimum
amount of $1,000 principal amount;


 


(6)           the
place or places where Notes are to be surrendered for tender pursuant to the
Offer to Purchase, if applicable;


 


(7)           that,
unless the Issuer defaults in making such purchase, any Note accepted for
purchase pursuant to the Offer to Purchase will cease to accrue interest on and
after the Purchase Date, but that any Note not tendered or tendered but not
purchased by the Issuer pursuant to the Offer to Purchase will continue to
accrue interest at the same rate;


 


(8)           that,
on the Purchase Date, the Purchase Price will become due and payable upon each
Note accepted for payment pursuant to the Offer to Purchase;


 


(9)           that
each Holder electing to tender a Note pursuant to the Offer to Purchase will be
required to surrender such Note or cause such Note to be surrendered at the
place or places set forth in the Offer prior to the close of business on the
Expiration Date (such Note being, if the Issuer or the Trustee so requires,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing);


 


(10)         that
Holders will be entitled to withdraw all or any portion of Notes tendered if
the Issuer (or its paying agent) receives, not later than the close of business
on the Expiration Date, a facsimile transmission or letter setting forth the
name of the Holder, the aggregate principal amount of the Notes the Holder
tendered, the certificate number of the Note the Holder tendered and a
statement that such Holder is withdrawing all or a portion of his tender;


 


(11)         that
(a) if Notes having an aggregate principal amount less than or equal to
the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer
to Purchase, the Issuer shall purchase all such Notes and (b) if Notes having
an aggregate principal amount in excess of the Purchase Amount are tendered and
not withdrawn pursuant to the Offer to Purchase, the Issuer shall purchase
Notes having an aggregate principal amount equal to the Purchase Amount on a pro  rata basis (with
such adjustments as may be deemed appropriate so that only Notes in
denominations of $2,000 principal amount or integral multiples of $1,000 in
excess thereof shall remain outstanding following such purchase); and


 


(12)         if
applicable, that, in the case of any Holder whose Note is purchased only in
part, the Issuer shall execute, and the Trustee shall authenticate and deliver
to the Holder of such Note without service charge, a new Note or Notes, of any
authorized denomination as requested by such Holder, in the aggregate principal
amount equal to and in exchange for the unpurchased portion of the aggregate
principal amount of the Notes so tendered.


 


16

















 


“Offering Memorandum”
means the offering memorandum related to the issuance of the Initial Notes on
the Issue Date, dated April 21, 2010.


 


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


 


“Officers’ Certificate” means a certificate signed by two Officers of
the Issuer or a Guarantor, as applicable, one of whom must be the principal
executive officer, the principal financial officer or the principal accounting
officer of the Issuer or such Guarantor, as applicable.


 


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


 


“Participant”
means, with respect to DTC, a Person who has an account with DTC.


 


“Paying Agent”
means any Person authorized by the Issuer to pay the principal of, premium, if
any, or interest on, or redemption, purchase, retirement, legal defeasance,
covenant defeasance or similar payment with respect to, any Notes on behalf of
the Issuer.


 


“Permitted Business”  means any business similar in nature to any business
conducted by the Issuer and the Restricted Subsidiaries on the Issue Date and
any business reasonably ancillary, incidental, complementary or related to, or
a reasonable extension, development or expansion of, the business conducted by
the Issuer and the Restricted Subsidiaries on the Issue Date, in each case, as
determined in good faith by the Board of Directors of the Issuer.


 


“Permitted Collateral Liens”
means the Liens permitted by clauses (b) (which Liens shall be (i) equal
and ratable with, or junior to, the Note Liens and (ii) subject to an
Intercreditor Agreement), (c), (d), (e), (f), (p) or (t) of the definition
of “Permitted Liens.”


 


“Permitted Debt” means:


 


(i)          Debt Incurred pursuant to one or more Credit Facilities in
an aggregate principal amount at any one time outstanding not to exceed (x) the
greatest of (1) $75.0 million, (2) the sum of (A) 85% of the net
book value of accounts receivable, plus (B) 60% of the net book value of
the inventory, in each case of the Issuer and the Restricted Subsidiaries,
calculated on a consolidated basis in accordance with GAAP and (3) an
amount equal to (A) the aggregate amount of Consolidated Cash Flow
Available for Fixed Charges of the Issuer for the four full fiscal quarters,
treated as one period, for which financial information in respect thereof is
available immediately preceding the date on which such Debt is Incurred,
multiplied by (B) 1.5, minus (y)(1) any amounts Incurred and
outstanding pursuant to a Qualified Receivables Transaction permitted under
clause (xiv) below and (2) with respect to clause (x)(1) above only,
any amount used to permanently repay such Obligations (and, if the Obligations
repaid are revolving credit Debt, permanently reduce commitments with respect
thereto) pursuant to Section 4.10;


 


(ii)          Debt outstanding under the Notes (excluding any Additional
Notes) on the Issue Date (and any Exchange Notes pursuant to the Registration
Rights Agreement) and contribution, indemnification and reimbursement
obligations owed by the Issuer or any Guarantor to any of the other of them in
respect of amounts paid or payable on such Notes;


 


17

















 


(iii)          Guarantees of the Notes (and of any Exchange Notes pursuant
to the Registration Rights Agreement);


 


(iv)          Debt of the Issuer or any Restricted Subsidiary outstanding
at the time of the Issue Date (other than clauses (i), (ii) or (iii) above),
including the Issuer’s existing 2.25% Convertible Senior Notes due 2026 (other
than any such notes purchased in the tender offer therefor being conducted
concurrently with the offering of the Notes);


 


(v)         Debt owed to and held by the Issuer or a Restricted
Subsidiary, provided that (A) if such Debt is
owed by the Issuer or a Guarantor to a Restricted Subsidiary that is not a
Guarantor, such Debt must be expressly subordinated in right of payment to, in
the case of the Issuer, the Notes or, in the case of a Guarantor, such
Guarantor’s Note Guarantee and (B) if for any reason such Debt ceases to
be held by the Issuer or a Restricted Subsidiary, as applicable, such Debt
shall cease to be Permitted Debt and the Issuer or such Restricted Subsidiary
shall be deemed to have Incurred Debt not permitted by this clause (v);


 


(vi)          Guarantees Incurred by the Issuer of Debt of a Restricted
Subsidiary otherwise permitted to be incurred under this Indenture;


 


(vii)          Guarantees by any Restricted Subsidiary of Debt of the
Issuer or any Restricted Subsidiary, including Guarantees by any Restricted
Subsidiary of Debt under any Credit Facility, provided that
(a) such Debt is Permitted Debt or is otherwise Incurred in accordance
with Section 4.9 hereof and (b) such Guarantees are subordinated to
the Notes to the same extent as the Debt being guaranteed;


 


(viii)          Debt Incurred in respect of workers’
compensation claims, self-insurance obligations, indemnity, bid, performance,
warranty, release, appeal, surety and similar bonds, letters of credit for
operating purposes and completion guarantees provided or incurred (including
Guarantees thereof) by the Issuer or a Restricted Subsidiary in the ordinary
course of business;


 


(ix)          Debt under Hedging Obligations entered into for bona fide hedging purposes to protect the Issuer and its
Restricted Subsidiaries from fluctuations in interest rates, commodity prices
and currency exchange rates and not for the purpose of speculation;


 


(x)          Debt of the Issuer or any Restricted Subsidiary pursuant to
Capital Lease Obligations and Purchase Money Debt under this clause (x), provided that the aggregate principal amount of such Debt
outstanding at any time may not exceed $15.0 million in the aggregate;


 


(xi)          Debt arising from agreements of the Issuer or a Restricted
Subsidiary providing for indemnification, contribution, earnout, adjustment of
purchase price or similar obligations, in each case, incurred or assumed in
connection with the acquisition or disposition of any business, assets or
Capital Interests of a Restricted Subsidiary otherwise permitted under this
Indenture;


 


(xii)           the issuance by any of the Issuer’s Restricted
Subsidiaries to the Issuer or to any of its Restricted Subsidiaries of
Preferred Interests; provided, however, that:


 


(a)           any
subsequent issuance or transfer of Capital Interests that results in any such
Preferred Interests being held by a Person other than the Issuer or a
Restricted Subsidiary; and


 


18

















 


(b)           any
sale or other transfer of any such Preferred Interests to a Person that is not
either the Issuer or a Restricted Subsidiary;


 


shall
be deemed, in each case, to constitute an issuance of such Preferred Interests
by such Restricted Subsidiary that was not permitted by this clause (xii);


 


(xiii)           Debt of the Issuer or any Restricted
Subsidiary not otherwise permitted pursuant to this definition, in an aggregate
principal amount not to exceed $25.0 million at any time outstanding, which
Debt may be Incurred under a Credit Facility;


 


(xiv)           Purchase Money Notes Incurred by any Receivable Subsidiary
that is a Restricted Subsidiary in a Qualified Receivables Transaction and
Non-Recourse Receivable Subsidiary Indebtedness;


 


(xv)          Refinancing Debt in respect of Debt permitted by clauses
(ii), (iii) or (iv) above, or this clause (xv) or the first paragraph
of Section 4.9;


 


(xvi)           Debt of the Issuer or any of its Restricted Subsidiaries
arising from customary cash management services or 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 and consistent with past
practices; provided, however,  that such Debt is extinguished within five Business Days of
Incurrence;


 


(xvii)           customer deposits and advance
payments received in the ordinary course of business from customers for goods
purchased in the ordinary course of business;


 


(xx)           Debt of the Issuer or any of its Restricted Subsidiaries
consisting of (A) the financing of insurance premiums or (B) take-or-pay
obligations contained in supply arrangements, in each case, incurred in the ordinary
course of business; and


 


(xxi)           Debt of Foreign Restricted Subsidiaries in an aggregate
principal amount at any one time outstanding not to exceed the greater of (A) $15.0
million and (B) 5.0% of the total consolidated assets of the Foreign
Restricted Subsidiaries calculated on a consolidated basis in accordance with
GAAP.


 


Notwithstanding anything herein to the contrary,
Debt permitted under clause (i) of this definition of “Permitted Debt”
shall not constitute “Refinancing Debt” under clause (xv) of this definition of
“Permitted Debt.”


 


“Permitted Holders”
means Platinum Equity Capital Partners, L.P., a Delaware limited partnership,
and Platinum Equity Capital Partners II, L.P., a Delaware limited partnership,
or any of their Affiliates.


 


“Permitted Investments” means:


 


(a)           Investments
in existence on the Issue Date;


 


(b)           Investments
required pursuant to any agreement or obligation of the Issuer or a Restricted
Subsidiary, in effect on the Issue Date, to make such Investments;


 


(c)           Investments
in cash and Eligible Cash Equivalents;


 


19

















 


(d)           Investments
in property and other assets owned or used by the Issuer or any Restricted
Subsidiary in the normal course of business;


 


(e)           Investments
by the Issuer or any of its Restricted Subsidiaries in the Issuer or any
Restricted Subsidiary that is a Guarantor;


 


(f)            Investments
by the Issuer or any Restricted Subsidiary in a Person, if as a result of such
Investment (A) such Person becomes a Restricted Subsidiary or (B) such
Person is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated or wound-up into, the
Issuer or a Restricted Subsidiary;


 


(g)           Hedging
Obligations entered into for bona fide
hedging purposes to protect the Issuer and its Restricted Subsidiaries from
fluctuations in interest rates, commodity prices and currency exchange rates
and not for the purpose of speculation;


 


(h)           Investments
received in settlement of obligations owed to the Issuer or any Restricted
Subsidiary and as a result of bankruptcy or insolvency proceedings or upon the
foreclosure or enforcement of any Lien in favor of the Issuer or any Restricted
Subsidiary;


 


(i)            Investments
by the Issuer or any Restricted Subsidiary (other than in an Affiliate) not
otherwise permitted under this definition, in an aggregate amount not to exceed
$25.0 million at any one time outstanding (with the Fair Market Value of each
such Investment being measured at the time made and without giving effect to
subsequent changes in value);


 


(j)            loans
and advances (including for travel and relocation) to employees in an amount
not to exceed $2.5 million in the aggregate at any one time outstanding;


 


(k)           Investments
the payment for which consists solely of Qualified Capital Interests in the
Issuer or the net cash proceeds from the issuance and sale of Qualified Capital
Interests;


 


(l)            any
Investment in any Person to the extent such Investment represents the non-cash
portion of the consideration received in connection with an Asset Sale
consummated in compliance with Section 4.10 or any other disposition of
property not constituting an Asset Sale;


 


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


 


(n)           guarantees
by the Issuer or any Restricted Subsidiary of Debt of the Issuer or a
Restricted Subsidiary (other than a Receivable Subsidiary) of Debt otherwise
permitted by Section 4.9; and


 


(o)           any
Investment by the Issuer or any Restricted Subsidiary in a Receivables Subsidiary
or any Investment by a Receivable Subsidiary in any other Person in connection
with a Qualified Receivables Transaction, so long as any Investment in a
Receivable Subsidiary is in the form of a Purchase Money Note or an Investment
in Capital Interests; and


 


(p)           any
Investment by the Issuer or any Restricted Subsidiary in a Permitted Joint
Venture; provided that the aggregate amount of
all such Investments made pursuant to this clause (p) shall not exceed
$12.5 million at any one time outstanding (with the Fair Market Value of


 


20

















 


each such Investment being
measured at the time made and without giving effect to subsequent changes in
value).


 


“Permitted Joint Venture” means any
agreement or other arrangement between the Issuer or a Restricted Subsidiary and
any other Person engaged in a Permitted Business, consistent with the
agreements and arrangements of the Issuer and its Restricted Subsidiaries in
effect on the Issue Date, that permits one party to share risks or costs,
comply with regulatory requirements or satisfy other business objectives
customarily achieved through the conduct of such Permitted Business jointly
with third parties.


 


“Permitted Liens” means:


 


(a)           Liens
existing on the Issue Date;


 


(b)           Liens
that secure Obligations Incurred pursuant to clause (i) of the definition
of “Permitted Debt” (and any related Hedging Obligations permitted under the
agreement related thereto);


 


(c)           any
Lien for taxes or assessments or other governmental charges or levies not then
due and payable (or which, if due and payable, are being contested in good
faith by appropriate proceedings and for which adequate reserves are being
maintained to the extent required by GAAP, and such proceedings have the effect
of preventing the forfeiture or sale of the property or assets subject to any
such Lien);


 


(d)           any
warehousemen’s, materialmen’s, landlord’s or other similar Liens arising by law
for sums not then due and payable (or which, if due and payable, are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained to the extent required by GAAP, and such
proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien);


 


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


 


(f)            pledges
or deposits (i) in connection with workers’ compensation, unemployment
insurance and other types of statutory obligations or the requirements of any
official body, or (ii) to secure the performance of tenders, bids, surety
or performance bonds, leases, purchase, construction, sales or servicing
contracts and other similar obligations Incurred in the normal course of
business consistent with industry practice; or (iii) to obtain or secure
obligations with respect to letters of credit, Guarantees, bonds or other
sureties or assurances given in connection with the activities described in
clauses (i) and (ii) above, in each case not Incurred or made in
connection with the borrowing of money, the obtaining of advances or credit or
the payment of the deferred purchase price of property or services or imposed
by ERISA or the Code in connection with a “plan” (as defined in ERISA) or (iv) arising
in connection with any attachment unless such Liens shall not be satisfied or
discharged or stayed pending appeal within 60 days after the entry thereof or
the expiration of any such stay;


 


21

















 


(g)           Liens
on property of a Person existing at the time such Person is merged with or into
or consolidated with the Issuer or a Restricted Subsidiary, or becomes a
Restricted Subsidiary (and not created or Incurred in anticipation of such
transaction), provided that such Liens are not
extended to the property and assets of the Issuer and its Restricted
Subsidiaries other than the property or assets acquired;


 


(h)           Liens
securing Debt of a Restricted Subsidiary that is a Guarantor owed to and held
by the Issuer or a Restricted Subsidiary that is a Guarantor;


 


(i)            other
Liens (not securing Debt) incidental to the conduct of the business of the
Issuer or any of its Restricted Subsidiaries, as the case may be, or the
ownership of their assets which do not individually or in the aggregate
materially adversely affect the value of such assets or materially impair the
operation of the business of the Issuer or its Restricted Subsidiaries;


 


(j)            Liens
to secure any permitted extension, renewal, refinancing or refunding (or
successive extensions, renewals, refinancings or refundings), in whole or in
part, of any Debt secured by Liens referred to in the foregoing clauses (a) and
(g); provided that such Liens do not extend
to any other property or assets and the principal amount of the obligations
secured by such Liens is not increased;


 


(k)           Liens
in favor of customs or revenue authorities arising as a matter of law to secure
payment of custom duties in connection with the importation of goods incurred
in the ordinary course of business;


 


(l)            Liens
to secure Capital Lease Obligations and Purchase Money Debt permitted to be
incurred pursuant to clause (x) of the definition of “Permitted Debt;” provided that such Liens do not extend to any Collateral;


 


(m)          Liens
upon specific items of inventory or other goods and proceeds of any Person
securing such Person’s obligation in respect of banker’s acceptances issued or
created in the ordinary course of business for the account of such Person to
facilitate the purchase, shipment, or storage of such inventory or other goods;


 


(n)           Liens
on property or shares of Capital Interests of another Person at the time such
other Person becomes a Restricted Subsidiary of such Person; provided, however, that (i) the
Liens may not extend to any other property owned by such Person or any of its
Restricted Subsidiaries (other than assets and property affixed or appurtenant
thereto) and (ii) such Liens are not created or incurred in connection
with, or in contemplation of, such other Person becoming such a Restricted Subsidiary;


 


(o)           Liens
(i) that are contractual rights of set-off (A) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Debt, (B) relating to pooled deposit or sweep accounts of
the Issuer or any of its Restricted Subsidiaries to permit satisfaction of
overdraft or similar obligations and other cash management activities incurred
in the ordinary course of business of the Issuer and/or any of its Restricted
Subsidiaries or (C) relating to purchase orders and other agreements
entered into with customers of the Issuer or any of its Restricted Subsidiaries
in the ordinary course of business and (ii) of a collection bank arising under
Section 4-210 of the Uniform Commercial Code on items in the course of
collection, (Y) encumbering reasonable customary initial deposits and margin
deposits and attaching to commodity trading accounts or other brokerage
accounts incurred in the ordinary course of business, and (Z) in favor of
banking institutions arising as a matter of law or pursuant to customary
account


 


22

















 


agreements encumbering
deposits (including the right of set-off) and which are within the general
parameters customary in the banking industry;


 


(p)           Liens
securing judgments for the payment of money not constituting an Event of
Default under clause (7) of Section 6.1 so long as such Liens are
adequately bonded and any appropriate legal proceedings that may have been duly
initiated for the review of such judgment have not been finally terminated or
the period within which such proceedings may be initiated has not expired;


 


(q)           Deposits
made in the ordinary course of business to secure liability to insurance
carriers;


 


(r)            leases,
subleases, licenses or sublicenses granted to others in the ordinary course of
business so long as such leases, subleases, licenses or sublicenses are
subordinate in all respects to the Liens granted and evidenced by the Security
Documents and which do not materially interfere with the ordinary conduct of
the business of the Issuer or any Restricted Subsidiaries and do not secure any
Debt;


 


(s)           Liens
arising from UCC financing statement filings regarding operating leases entered
into by the Issuer or any Restricted Subsidiary in the ordinary course of
business;


 


(t)            Liens
on the Collateral granted under the Security Documents in favor of the
Collateral Agent to secure the Notes and the Note Guarantees; and


 


(u)           Liens
not otherwise permitted under this Indenture in an aggregate amount not to
exceed $10.0 million, provided that
no portion of the Liens permitted pursuant to this clause (u) may be used
to encumber Collateral.


 


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


 


“Pledge Agreement”  means the pledge agreement being executed in connection
with the issuance of the Notes pursuant to this Indenture between the
Collateral Agent, the Issuer and the applicable Guarantors, among other things,
granting a first-priority Lien on the Collateral, subject to Permitted Collateral
Liens, in favor of the Collateral Agent for its benefit and for the benefit of
the Trustee and the Holders, as amended, modified, restated, supplemented or
replaced from time to time in accordance with its terms.


 


“Preferred Interests”
as applied to the Capital Interests in any Person, means Capital Interests in
such Person of any class or classes (however designated) that rank prior, as to
the payment of dividends or as to the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of such Person, to shares
of Common Interests in such Person.


 


“Purchase Agreement”
means the purchase agreement dated April 21, 2010 by and among the Issuer,
the Guarantors party thereto and the Initial Purchasers.


 


“Purchase Amount”
has the meaning set forth in the definition of “Offer to Purchase.”


 


“Purchase Date”
has the meaning set forth in the definition of “Offer to Purchase.”


 


23
















 


“Purchase Money Debt” means, with respect to any Person, Debt


 


(i)                                    Incurred to finance the
purchase or construction (including additions and improvements thereto) of any
assets (other than Capital Interests) of such Person or any Restricted
Subsidiary; and


 


(ii)                                 that is secured by a Lien on
such assets where the lender’s sole security is to the assets so purchased or
constructed,


 


in each case that does not exceed 100% of the
cost and to the extent the purchase or construction prices for such assets are
or should be included in “addition to property, plant or equipment” in
accordance with GAAP.


 


“Purchase Money Note”
means a promissory note of a Receivable Subsidiary to the Issuer or any
Restricted Subsidiary, which note must be repaid from cash available to the
Receivable Subsidiary, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts paid
in connection with the purchase of newly generated receivables.  The repayment of a Purchase Money Note may be
subordinated to the repayment of other liabilities of the Receivable Subsidiary
on terms determined in good faith by the Issuer to be substantially consistent
with market practice in connection with Qualified Receivables Transactions.


 


“Purchase Price”
has the meaning set forth in the definition of “Offer to Purchase.”


 


“Qualified Capital
Interests” in any Person means Capital Interests in such Person
other than Redeemable Capital Interests.


 


“Qualified Equity Offering”
means (i) an underwritten public equity offering of Qualified Capital
Interests pursuant to an effective registration statement under the Securities
Act yielding gross proceeds to either of the Issuer, or any direct or indirect
parent company of the Issuer, of at least $25.0 million, (ii) a
private equity offering of Qualified Capital Interests of the Issuer other than
(x) any such public or private sale to an entity that is an Affiliate of
the Issuer and (y) any public offerings registered on Form S-8 or (iii) the
sale of shares of the Issuer’s common stock pursuant to an exercise of the
warrant issued to K Financing, LLC in June 2009, and subsequently
transferred to K Equity, LLC, an affiliate of K Financing, LLC, to
purchase shares of the Issuer’s common stock.


 


“Qualified Receivables
Transaction” means any transaction or series of transactions entered
into by the Issuer or any of its Restricted Subsidiaries pursuant to which the
Issuer or such Restricted Subsidiary transfers to (a) a Receivable
Subsidiary (in the case of a transfer by the Issuer or any of its Restricted
Subsidiaries) or (b) any other Person (in the case of a transfer by a
Receivable Subsidiary), or grants a security interest in, any accounts receivable
(whether now existing or arising in the future) of the Issuer or any of its
Restricted Subsidiaries, and any assets related thereto, including, without
limitation, all collateral securing such accounts receivable, all contracts and
all Guarantees or other obligations in respect of such accounts receivable,
proceeds of such accounts receivable and other assets which are customarily
transferred or in respect of which security interests are customarily granted
in connection with an accounts receivable financing transaction; provided such transaction is on market terms as determined
in good faith by the Board of Directors of the Issuer at the time the Issuer or
such Restricted Subsidiary enters into such transaction.


 


“Rating Agencies”
means (1) each of Moody’s and Standard & Poor’s and (2) if
Moody’s or Standard & Poor’s ceases to rate the Notes or fails to make
a rating of the Notes publicly available, at 


 


24

















 


the Issuer’s sole option, a “nationally
recognized statistical rating organization” as defined in Section 3 of the
Exchange Act, selected by the Issuer (as certified by a resolution of the Board
of Directors of the Issuer) as a replacement agency for Moody’s or Standard &
Poor’s, or any of them, as the case may be.


 


“Ratings Event”
means that the rating on the Notes is lowered by one or both of the Rating
Agencies on any day during the period (which period will be extended so long as
the rating of the Notes is under publicly announced consideration for a
possible downgrade by any of the Rating Agencies) commencing 60 days prior to
the first public notice of the occurrence of a Change of Control or the Issuer’s
intention to effect a Change of Control and ending 60 days following
consummation of such Change of Control.


 


“Receivable Subsidiary” means a Subsidiary of the Issuer:


 


(1)                                  that is formed solely for
the purpose of, and that engages in no activities other than activities in
connection with, financing accounts receivable of the Issuer and/or its Restricted
Subsidiaries;


 


(2)                                  that is designated by the
Board of Directors of the Issuer as a Receivable Subsidiary pursuant to a Board
Resolution set forth in an Officers’ Certificate and delivered to the Trustee;


 


(3)                                  that is either (a) a
Restricted Subsidiary or (b) an Unrestricted Subsidiary designated in
accordance with Section 4.21;


 


(4)                                  no portion of the Debt or
any other obligation (contingent or otherwise) of which (a) is at any time
Guaranteed by the Issuer or any Restricted Subsidiary (excluding Guarantees of
obligations (other than any Guarantee of Debt) pursuant to Standard
Securitization Undertakings), (b) is at any time recourse to or obligates
the Issuer or any Restricted Subsidiary in any way, other than pursuant to
Standard Securitization Undertakings or (c) subjects any asset of the
Issuer or any other Restricted Subsidiary of the Issuer, directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings (such Indebtedness, “Non-Recourse Receivable Subsidiary Indebtedness”);


 


(5)                                  with which neither the
Issuer nor any Restricted Subsidiary has any material contract, agreement,
arrangement or understanding other than (a) contracts, agreements, arrangements
and understandings entered into in the ordinary course of business on terms no
less favorable to the Issuer or such Restricted Subsidiary than those that
might be obtained at the time from Persons that are not Affiliates of the
Issuer in connection with a Qualified Receivables Transaction as determined in
good faith by the Board of Directors of the Issuer, (b) fees payable in
the ordinary course of business in connection with servicing accounts
receivable in connection with such a Qualified Receivables Transaction as determined
in good faith by the Board of Directors of the Issuer and (c) any Purchase
Money Note issued by such Receivable Subsidiary to the Issuer or a Restricted
Subsidiary; and


 


(6)                                  with respect to which
neither the Issuer nor any other Restricted Subsidiary has any obligation (a) to
subscribe for additional shares of Capital Interests therein or make any additional
capital contribution or similar payment or transfer thereto except in
connection with a Qualified Receivables Transaction or (b) to maintain or
preserve the solvency or any balance sheet term, financial condition, level of
income or results of operations thereof.


 


25

















 


“Redeemable Capital
Interests” in any Person means any equity security of such Person
that by its terms (or by terms of any security into which it is convertible or
for which it is exchangeable), or otherwise (including the passage of time or
the happening of an event), is required to be redeemed, is redeemable at the
option of the Holder thereof in whole or in part (including by operation of a
sinking fund), or is convertible or exchangeable for Debt of such Person at the
option of the Holder thereof, in whole or in part, at any time prior to the
Stated Maturity of the Notes; provided that
only the portion of such equity security which is required to be redeemed, is
so convertible or exchangeable or is so redeemable at the option of the Holder
thereof before such date will be deemed to be Redeemable Capital Interests.  Notwithstanding the preceding sentence, any
equity security that would constitute Redeemable Capital Interests solely
because the holders of the equity security have the right to require the Issuer
to repurchase such equity security upon the occurrence of a change of control
or an asset sale will not constitute Redeemable Capital Interests if the terms
of such equity security provide that the Issuer may not repurchase or redeem
any such equity security pursuant to such provisions unless such repurchase or
redemption complies with Section 4.7. 
The amount of Redeemable Capital Interests deemed to be outstanding at
any time for purposes of this Indenture will be the maximum amount that the
Issuer and its Restricted Subsidiaries may become obligated to pay upon the
maturity of, or pursuant to any mandatory redemption provisions of, such
Redeemable Capital Interests or portion thereof, exclusive of accrued
dividends.


 


“Redemption Price,”
when used with respect to any Note to be redeemed, means the price at which it
is to be redeemed pursuant to this Indenture.


 


“Refinancing Debt”
means Debt that refunds, refinances, renews, replaces or extends any Debt
permitted to be Incurred by the Issuer or any Restricted Subsidiary pursuant to
the terms of this Indenture, whether involving the same or any other lender or
creditor or group of lenders or creditors, but only to the extent that


 


(i)                                    the Refinancing Debt is
subordinated to the Notes to at least the same extent as the Debt being
refunded, refinanced or extended, if such Debt was subordinated to the Notes,


 


(ii)                                 the Refinancing Debt is
scheduled to mature either (a) no earlier than the Debt being refunded,
refinanced or extended or (b) at least 91 days after the maturity date of
the Notes,


 


(iii)                              the Refinancing Debt has a
weighted average life to maturity at the time such Refinancing Debt is Incurred
that is equal to or greater than the weighted average life to maturity of the
Debt being refunded, refinanced, renewed, replaced or extended,


 


(iv)                             such Refinancing Debt is in
an aggregate principal amount that is less than or equal to the sum of (a) the
aggregate principal or accreted amount (in the case of any Debt issued with
original issue discount, as such) then outstanding under the Debt being
refunded, refinanced, renewed, replaced or extended, (b) the amount of
accrued and unpaid interest, if any, and premiums owed, if any, not in excess
of preexisting prepayment provisions on such Debt being refunded, refinanced,
renewed, replaced or extended and (c) the amount of reasonable and customary
fees, expenses and costs related to the Incurrence of such Refinancing Debt,
and


 


(v)                                such Refinancing Debt is
Incurred by the same Person (or its successor) that initially Incurred the Debt
being refunded, refinanced, renewed, replaced or extended, except that the
Issuer may Incur Refinancing Debt to refund, refinance, renew, replace or
extend Debt of any Restricted Subsidiary of the Issuer.


 


26

















 


“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of the
Issue Date, among the Issuer, the Guarantors and the Initial Purchasers and any
similar agreement entered into in connection with any Additional Notes.


 


“Regulation S-X”
means Regulation S-X promulgated by the Commission.


 


“Responsible Officer”
means, when used with respect to the Trustee, any officer within the corporate
trust department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such Person’s
knowledge of and familiarity with the particular subject and in any case who
shall have direct responsibility for the administration of this Indenture.


 


“Restricted Notes Legend”
means the legend identified as such in Exhibit A hereto.


 


“Restricted Payment” is defined to mean any of the following:


 


(a)                                  any dividend or other
distribution declared and paid on the Capital Interests in the Issuer or on the
Capital Interests in any Restricted Subsidiary of the Issuer that are held by,
or declared and paid to, any Person other than the Issuer or a Restricted
Subsidiary, but excluding:


 


(i)                                      dividends,
distributions or payments made solely in Qualified Capital Interests in the
Issuer; and


 


(ii)                                   in the case of
Restricted Subsidiaries, dividends or distributions payable to the Issuer or a Restricted
Subsidiary of the Issuer or to other holders of Capital Interests of a
Restricted Subsidiary on a pro rata basis;


 


(b)                                 any payment made by the
Issuer or any of its Restricted Subsidiaries to purchase, redeem, acquire or
retire any Capital Interests in the Issuer or any of its Restricted
Subsidiaries (including any issuance of Debt in exchange for such Capital
Interests or the conversion or exchange of such Capital Interests into or for
Debt) other than any such Capital Interests owned by the Issuer or any
Restricted Subsidiary;


 


(c)                                  any payment made by the
Issuer or any of its Restricted Subsidiaries (other than a payment made solely
in Qualified Capital Interests in the Issuer) to redeem, repurchase, defease
(including an in substance or legal defeasance) or otherwise acquire or retire
for value (including pursuant to mandatory repurchase covenants), prior to any
scheduled maturity, scheduled sinking fund or mandatory redemption payment,
Debt of the Issuer or any Guarantor that is subordinate (pursuant to its terms)
in right of payment to the Notes or Note Guarantees (excluding any Debt owed to
the Issuer or any Restricted Subsidiary); except payments of principal and
interest in anticipation of satisfying a sinking fund obligation or final
maturity, in each case, within one year of the due date thereof;


 


(d)                                 any Investment by the Issuer
or a Restricted Subsidiary in any Person, other than a Permitted Investment;
and


 


(e)                                  any designation of a
Restricted Subsidiary as an Unrestricted Subsidiary.


 


27

















 


“Restricted Subsidiary”
means any Subsidiary that has not been designated as an “Unrestricted
Subsidiary” in accordance with this Indenture. 
Unless otherwise specified “Restricted Subsidiary” refers to a Restricted
Subsidiary of the Issuer.


 


“Sale and Leaseback
Transaction” means any direct or indirect arrangement pursuant to
which property is sold or transferred by the Issuer or a Restricted Subsidiary
and is thereafter leased back as a capital lease by the Issuer or a Restricted
Subsidiary.


 


“Secured Party”
means the Collateral Agent, for its benefit and the benefit of the Trustee and
the Noteholders.


 


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


 


“Security Documents”
means the Pledge Agreement, any Intercreditor Agreement, the Foreign Law
Security Documents, the Authorization Letter and all of the security
agreements, pledges, collateral assignments, mortgages, deeds of trust, trust
deeds or other instruments evidencing or creating or purporting to create any
Security Interests in favor of the Collateral Agent for its benefit and for the
benefit of the Trustee and the Holders, in all or any portion of the
Collateral, as amended, modified, restated, supplemented or replaced from time
to time.


 


“Security Interests”
means the Liens on the Collateral created by the Security Documents in favor of
the Collateral Agent for its benefit and for the benefit of the Trustee and the
Holders.


 


“Senior Note Documents”
means this Indenture, the Notes, the Note Guarantees and the Security
Documents.


 


“Significant Subsidiary”
has the meaning set forth in Rule 1-02 of Regulation S-X, but shall not
include any Unrestricted Subsidiary.


 


“Standard & Poor’s”
means Standard & Poor’s, a division of The McGraw Hill Companies, Inc.,
and any successor to its rating agency business.


 


“Standard Securitization
Undertakings” means representations, warranties, covenants and indemnities
entered into by the Issuer or any Restricted Subsidiary which are reasonably
customary in an accounts receivable securitization transaction as determined in
good faith by the Board of Directors of the Issuer, including Guarantees by the
Issuer or any Restricted Subsidiary of any of the foregoing obligations of the
Issuer or a Restricted Subsidiary.


 


“Stated Maturity,”
when used with respect to (i) any Note or any installment of interest
thereon, means the date specified in such Note as the fixed date on which the
principal amount of such Note or such installment of interest is due and
payable and (ii) any other Debt or any installment of interest thereon,
means the date specified in the instrument governing such Debt as the fixed
date on which the principal of such Debt or such installment of interest is due
and payable.


 


“Subsidiary”
means, with respect to any Person, any corporation, limited or general partnership,
trust, association or other business entity of which an aggregate of at least a
majority of the outstanding Capital Interests therein is, at the time, directly
or indirectly, owned by such Person and/or one or more Subsidiaries of such
Person.  Unless otherwise specified “Subsidiary”
refers to a Subsidiary of the Issuer.


 


“Subsidiary Guarantor”  means each Subsidiary of the Issuer that is a Guarantor.


 


28

















 


“Successor Entity”
means a corporation or other entity that succeeds to and continues the business
of the Issuer.


 


“TIA” means the
Trust Indenture Act of 1939, as amended.


 


“Total Assets”
means, at any time, the total consolidated assets of the Issuer and its Restricted
Subsidiaries at such time, determined in accordance with GAAP.


 


“Transaction Date”
has the meaning set forth in the definition of “Consolidated Fixed Charge
Coverage Ratio.”


 


“Transfer Restricted Notes”
means Notes that bear or are required to bear the Restricted Notes Legend.


 


“Treasury Rate”
means, with respect to any redemption date, the yield to maturity as of such
redemption date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15 (519) that has become publicly available at least two Business
Days prior to such redemption date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most
nearly equal to the period from such redemption date to May 1, 2014; provided, however, that
if the period from such redemption date to May 1, 2014 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) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from such redemption date to May 1, 2014
is less than one year, the weekly average yield on actively traded United
States Treasury securities adjusted to a constant maturity of one year will be
used.


 


“Trust Monies” means all cash and Eligible Cash Equivalents
received by the Trustee:


 


(1)                                  upon the release of
Collateral from the Lien of this Indenture or the Security Documents;


 


(2)                                  pursuant to the Security
Documents;


 


(3)                                  as proceeds of any sale or
other disposition of all or any part of the Collateral by or on behalf of the
Trustee or any collection, recovery, receipt, appropriation or other
realization of or from all or any part of the Collateral pursuant to this
Indenture or any of the Security Documents or otherwise; or


 


(4)                                  for application as provided
in the relevant provisions of this Indenture or any Security Document or which
disposition is not otherwise specifically provided for in this Indenture or in
any Security Document;


 


provided, however, that Trust Monies shall in no event include any property
deposited with the Trustee for any redemption, legal defeasance or covenant
defeasance of Notes, for the satisfaction and discharge of this Indenture or to
pay the purchase price of Notes pursuant to an Offer to Purchase in accordance
with the terms of this Indenture and shall not include any cash received or
applicable by the Trustee in payment of its fees and expenses.


 


29

















 


“Trustee” has
the meaning set forth in the preamble to this Indenture until a successor replaces
it in accordance with the applicable provisions of this Indenture and,
thereafter, means the successor.


 


“UCC” means the
Uniform Commercial Code as in effect from time to time in the State of New
York; provided, however,
that, at any time, if by reason of mandatory provisions of law, any or all of
the perfection or priority of the Collateral Agent’s security interest in any
item or portion of the Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, the term “UCC”
shall mean the Uniform Commercial Code as in effect, at such time, in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or priority and for purposes of definitions relating to such provisions.


 


“Unrestricted Subsidiary” means:


 


(1)                                  any Subsidiary designated as
such by the Board of Directors of the Issuer as set forth below where (a) neither
the Issuer nor any  of its Restricted Subsidiaries (i) provides
credit support for, or Guarantee of, any Debt of such Subsidiary or any
Subsidiary of such Subsidiary (including any undertaking, agreement or
instrument evidencing such Debt, but excluding in the case of a Receivable
Subsidiary any Standard Securitization Undertakings) or (ii) is directly
or indirectly liable for any Debt of such Subsidiary or any Subsidiary of such
Subsidiary (except in the case of a Receivable Subsidiary any Standard
Securitization Undertakings), and (b) no default with respect to any Debt
of such Subsidiary or any Subsidiary of such Subsidiary (including any right
which the holders thereof may have to take enforcement action against such
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Debt of the Issuer and its Restricted Subsidiaries to declare a default
on such other Debt or cause the payment thereof to be accelerated or payable
prior to its final scheduled maturity (except in the case of a Receivable
Subsidiary any Standard Securitization Undertakings); and


 


(2)                                  any Subsidiary of an
Unrestricted Subsidiary.


 


“Voting Interests”
means, with respect to any Person, securities of any class or classes of
Capital Interests in such Person entitling the holders thereof generally to
vote on the election of members of the Board of Directors or comparable body of
such Person.


 


SECTION 1.2                                             Other
Definitions.


 


	
  Term

  	
   

  	
  Defined in Section

  
	
  “Affiliate Transaction”

  	
   

  	
  4.11

  
	
  “Agent Members”

  	
   

  	
  2.6

  
	
  “Change of Control Payment”

  	
   

  	
  4.14

  
	
  “covenant defeasance”

  	
   

  	
  8.3

  
	
  “Covenant Suspension”

  	
   

  	
  4.24

  
	
  “Custodian”

  	
   

  	
  6.1

  
	
  “Discharge”

  	
   

  	
  8.2

  
	
  “Event of Default”

  	
   

  	
  6.1

  
	
  “Excess Proceeds”

  	
   

  	
  4.10

  
	
  “Independent Financial Advisor”

  	
   

  	
  4.11

  
	
  “Issuer Notice”

  	
   

  	
  10.6

  
	
  “legal defeasance”

  	
   

  	
  8.2

  
	
  “Note Register”

  	
   

  	
  2.3

  



 


30

















 


	
  “Offer Amount”

  	
   

  	
  3.9

  
	
  “QIB”

  	
   

  	
  2.1

  
	
  “QIB Global Note”

  	
   

  	
  2.1

  
	
  “redemption date”

  	
   

  	
  3.1

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Regulation S”

  	
   

  	
  2.1

  
	
  “Regulation S Global Note”

  	
   

  	
  2.1

  
	
  “Released Collateral”

  	
   

  	
  10.6

  
	
  “Reversion Date”

  	
   

  	
  4.24

  
	
  “Rule 144A”

  	
   

  	
  2.1

  
	
  “Surviving Entity”

  	
   

  	
  5.1

  
	
  “Suspended Covenants”

  	
   

  	
  4.24

  
	
  “Suspension Period”

  	
   

  	
  4.24

  
	
  “Valuation Date”

  	
   

  	
  10.6

  



 


SECTION 1.3                                             Incorporation
by Reference of TIA.


 


Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in, and made a part of, this
Indenture.


 


The following TIA term used in this Indenture has
the following meaning:


 


“obligor” on the
Notes means the Issuer, the Guarantors and any successor obligor upon the
Notes.


 


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


 


SECTION 1.4                                             Rules of
Construction.


 


Unless the context otherwise requires:


 


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


 


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


 


(3)                                  “or” is not
exclusive;


 


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


 


(5)                                  unless
otherwise specified, any reference to a Section or an Article refers
to such Section or Article of this Indenture;


 


(6)                                  provisions
apply to successive events and transactions;


 


(7)                                  references to
sections of or rules under the Securities Act, the Exchange Act or the TIA
shall be deemed to include substitute, replacement or successor sections or rules adopted
by the Commission from time to time; and


 


31

















 


(8)                                  for the
avoidance of doubt, any references to “interest” shall include any Additional Interest
that may be payable.


 


ARTICLE
II


 


THE
NOTES


 


SECTION 2.1                                             Form and
Dating.


 


(a)                                  The Notes and
the Trustee’s certificate of authentication shall be substantially in the form
of Exhibit A attached hereto. 
The Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage.  Each
Note shall be dated the date of its authentication.  The Notes initially shall be issued only in
denominations of $2,000 and any integral multiple of $1,000 in excess thereof.


 


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


 


The Notes shall be issued initially in the form of
one or more Global Notes substantially in the form attached as Exhibit A
hereto and shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee as Note Custodian, and registered in the
name of the Depositary or a nominee of the Depositary, duly executed by the
Issuer and authenticated by the Trustee as hereinafter provided.


 


Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, redemptions and transfers of interests.  Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the Note
Custodian, at the direction of the Trustee, in accordance with written
instructions given by the Holder thereof as required by Section 2.6
hereof.


 


Except as set forth in Section 2.6 hereof, the
Global Notes may be transferred, in whole and not in part, only to another
nominee of the Depositary or to a successor of the Depositary or its nominee.


 


(b)                                 The Initial
Notes are being issued by the Issuer only (i) to “qualified institutional
buyers” (as defined in Rule 144A under the Securities Act (“Rule 144A”)) (“QIBs”) and (ii) in
reliance on Regulation S under the Securities Act (“Regulation S”).  After such initial offers, Initial Notes that
are Transfer Restricted Notes may be transferred to QIBs, in reliance on Rule 144A,
outside the United States pursuant to Regulation S or to the Issuer, in
accordance with Section 2.16. 
Initial Notes that are offered in reliance on Rule 144A shall be
issued in the form of one or more permanent Global Notes substantially in the
form set forth in Exhibit A (the “QIB Global
Note”) deposited with the Trustee, as Note Custodian, duly executed
by the Issuer and authenticated by the Trustee as hereinafter provided.  Initial Notes that are offered in offshore
transactions in reliance on Regulation S shall be issued in the form of one or
more Global Notes substantially in the form set forth in Exhibit A
(the “Regulation S Global Note”) deposited 


 


32

















 


with the Trustee, as Note Custodian, duly
executed by the Issuer and authenticated by the Trustee as hereinafter
provided.  The QIB Global Note and the
Regulation S Global Note shall each be issued with separate CUSIP numbers.  The aggregate principal amount of each Global
Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as Note Custodian. 
Transfers of Notes between QIBs and to or by purchasers pursuant to
Regulation S shall be represented by appropriate increases and decreases to the
respective amounts of the appropriate Global Notes, as more fully provided in Section 2.16.


 


(c)                                  Section 2.1(b) shall
apply only to Global Notes deposited with or on behalf of the Depositary.


 


The Issuer shall execute and the Trustee shall, in
accordance with Section 2.1(b) and this Section 2.1(c),
authenticate and deliver the Global Notes that (i) shall be registered in
the name of the Depositary or the nominee of the Depositary and (ii) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instructions or held by the Trustee as Note Custodian.


 


Participants shall have no rights either under this
Indenture with respect to any Global Note held on their behalf by the
Depositary or by the Note Custodian or under such Global Note, and the
Depositary may be treated by the Issuer, the Trustee and any agent of the
Issuer or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever.  Notwithstanding the
foregoing, nothing herein shall prevent the Issuer, the Trustee or any Agent or
other agent of the Issuer or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or impair,
as between the Depositary and its Participants, the operation of customary
practices of such Depositary governing the exercise of the rights of an owner
of a beneficial interest in any Global Note.


 


The Trustee shall have no responsibility or
obligation to any Holder, any member of (or a Participant in) DTC or any other
Person with respect to the accuracy of the records of DTC (or its nominee) or
of any Participant or member thereof, with respect to any ownership interest in
the Notes or with respect to the delivery of any notice (including any notice
of redemption) or the payment of any amount or delivery of any Notes (or other
security or property) under or with respect to the Notes.  The Trustee may rely (and shall be fully
protected in relying) upon information furnished by DTC with respect to its
members, Participants and any beneficial owners in the Notes.


 


(d)                                 Notes issued in
certificated form, including Global Notes, shall be substantially in the form
of Exhibit A attached hereto.


 


SECTION 2.2                                             Execution and
Authentication.


 


An Officer shall sign the Notes for the Issuer by
manual or facsimile signature.


 


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


 


A Note shall not be valid until authenticated by the
manual signature of an authorized signatory of the Trustee.  The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.


 


The Trustee shall, upon a written order of the
Issuer signed by one Officer directing the Trustee to authenticate and deliver
the Notes and certifying that all conditions precedent to the issuance of the
Notes contained herein have been complied with, authenticate up to $230.0
million aggregate principal


 


33
















 


amount of the Notes.  The aggregate principal amount of Notes
outstanding at any time may not exceed such amount except as provided in Section 2.17
hereof.


 


The Trustee may appoint an authenticating agent
reasonably acceptable to the Issuer to authenticate Notes.  Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so.  Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the
same rights as an Agent to deal with Holders or the Issuer or an Affiliate of
the Issuer.


 


SECTION 2.3                                             Registrar;
Paying Agent.


 


The Issuer shall maintain (i) an office or
agency where Notes may be presented for registration of transfer or for
exchange (“Registrar”) and (ii) an office or
agency where Notes may be presented for payment to a Paying Agent.  The Registrar shall keep a register of the
Notes (the “Note Register”) and of their transfer
and exchange.  The Issuer may appoint one
or more co-registrars and one or more additional paying agents; provided, however, that
at all times there shall be only one Note Register.  The term “Registrar” includes any
co-registrar and the term “Paying Agent” includes any additional paying
agent.  The Issuer may change any Paying
Agent or Registrar without notice to any Holder.  The Issuer shall notify the Trustee in
writing of the name and address of any Agent not a party to this
Indenture.  The Issuer or any of its Restricted
Subsidiaries may act as Paying Agent or Registrar.


 


The Issuer shall notify the Trustee and the Holders
of the name and address of any Agent not a party to this Indenture.  The Issuer shall enter into an appropriate
agency agreement with any Agent not a party to this Indenture, which shall
incorporate the provisions of Section 317(b) of the TIA.  The agreement shall implement the provisions
of this Indenture that relate to such Agent. 
The Issuer shall notify the Trustee of the name and address of any such
Agent.


 


The Issuer initially appoints the Trustee to act as
the Registrar and Paying Agent and initially appoints the Corporate Trust
Office of the Trustee as the office or agency of the Issuer for such purposes
and as the office or agency of the Issuer where notices  and demands to or upon the Issuer in respect
of the Notes and this Indenture may be served and the Trustee as the agent of
the Issuer to receive such notices and demands.


 


The Issuer initially appoints DTC to act as the
Depositary with respect to the Global Notes.


 


SECTION 2.4                                             Paying Agent to
Hold Money in Trust.


 


The Issuer shall require each Paying Agent other
than the Trustee to agree in writing that the Paying Agent shall hold in trust
for the benefit of the Holders or the Trustee all money held by the Paying Agent
for the payment of principal, premium, if any, or interest on the Notes, and
shall notify the Trustee of any Default by the Issuer in making any such
payment.  While any such Default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee.  The Issuer at any time
may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying
Agent (if other than the Issuer or a Subsidiary) shall have no further
liability for the money.  If the Issuer
or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying
Agent.  Upon the occurrence of events
specified in Section 6.1(8) hereof, the Trustee shall serve as Paying
Agent for the Notes.


 


34

















 


SECTION 2.5                                             Holder Lists.


 


The Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar, the
Issuer shall furnish to the Trustee at least seven (7) Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders, including the
aggregate principal amount of the Notes held by each Holder thereof, and the Issuer
shall otherwise comply with TIA § 312(a).


 


SECTION 2.6                                             Book-Entry
Provisions for Global Securities.


 


(a)                                  Each Global
Note shall (i) be registered in the name of the Depositary for such Global
Notes or the nominee of such Depositary, (ii) be delivered to the Trustee
as Note Custodian and (iii) bear legends as required by Section 2.6(e).


 


Members of, or Participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture
with respect to any Global Note held on their behalf by the Depositary, or the
Trustee as its custodian, or under the Global Note, and the Depositary may be
treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee
as the absolute owner of such 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 Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Note.


 


(b)                                 Transfers of a
Global Note shall be limited to transfers of such Global Note in whole, but not
in part, to the Depositary, its successors or their respective nominees.  Interests of beneficial owners in a Global
Note may be transferred in accordance with Section 2.16 and the rules and
procedures of the Depositary.  In
addition, Certificated Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests if (i) the Depositary notifies the
Issuer that it is unwilling or unable to continue as Depositary for the Global
Notes or the Depositary ceases to be a “clearing agency” registered under the
Exchange Act and a successor depositary is not appointed by the Issuer within
ninety (90) days of such notice or (ii) an Event of Default of which a
Responsible Officer of the Trustee has actual notice has occurred and is
continuing and the Registrar has received a request from the Depositary to issue
such Certificated Notes.


 


(c)                                  In connection
with the transfer of the entire Global Note to beneficial owners pursuant to
clause (b) of this Section, such Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Issuer shall execute, and
the Trustee shall authenticate and deliver, to each beneficial owner identified
by the Depositary in exchange for its beneficial interest in such Global Note
an equal aggregate principal amount of Certificated Notes of authorized denominations.


 


(d)                                 The registered
Holder of a Global Note may grant proxies and otherwise authorize any person,
including Agent Members and persons that may hold an interest through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.


 


(e)                                  Each Global
Note shall bear the Global Note Legend on the face thereof.


 


(f)                                    At such time as
all beneficial interests in Global Notes have been exchanged for Certificated
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned
to or retained 


 


35

















 


and cancelled by the Trustee in accordance
with Section 2.11 hereof.  At any
time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for Certificated Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced accordingly
and an endorsement shall be made on such Global Note, by the Trustee or the
Note Custodian, at the direction of the Trustee, to reflect such reduction.


 


(g)                                 General
Provisions Relating to Transfers and Exchanges.


 


(i)                                     To permit
registrations of transfers and exchanges, the Issuer shall execute and the Trustee
shall authenticate Global Notes and Certificated Notes at the Registrar’s
request.


 


(ii)                                  No service
charge shall be made to a Holder for any registration of transfer or exchange,
but the Issuer may require payment of a sum sufficient to cover any stamp or
transfer tax or similar governmental charge payable in connection therewith
(other than any such stamp or transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 2.2, 2.10, 3.6, 4.10,
4.14 and 9.5 hereto).


 


(iii)                               All Global
Notes and Certificated Notes issued upon any registration of transfer or
exchange of Global Notes or Certificated Notes shall, upon the execution by the
Issuer and authentication by the Trustee in accordance with the provisions
hereof, be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Global Notes or Certificated
Notes surrendered upon such registration of transfer or exchange.


 


(iv)                              The Registrar
shall not be required (A) to issue, to register the transfer of or to
exchange Notes during a period beginning at the opening of fifteen (15) days
before the day of any selection of Notes for redemption under Section 3.2
hereof and ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part, or (C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.


 


(v)                                 Prior to due
presentment for the registration of a transfer of any Note, the Trustee, any
Agent and the Issuer may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving payment
of principal of and interest on such Notes and for all other purposes, and
neither the Trustee, any Agent nor the Issuer shall be affected by notice to
the contrary.


 


(vi)                              The Trustee
shall authenticate Global Notes and Certificated Notes in accordance with the
provisions of Section 2.2 hereof. 
Except as provided in Section 2.6(b), neither the Trustee nor the
Registrar shall authenticate or deliver any Certificated Note in exchange for a
Global Note.


 


(vii)                           Each Holder
agrees to provide reasonable indemnity to the Issuer and the Trustee against
any liability that may result from the transfer, exchange or assignment of such
Holder’s Note in violation of any provision of this Indenture and/or applicable
United States federal or state securities law.


 


(viii)                        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 


 


36

















 


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.


 


SECTION 2.7                                             Replacement
Notes.


 


If any mutilated Note is surrendered to the Trustee,
or the Issuer and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Issuer shall issue and the Trustee,
upon the written order of the Issuer signed by an Officer of the Issuer, shall
authenticate a replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Issuer, an
indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any
Agent and any authenticating agent from any loss that any of them may suffer if
a Note is replaced.  The Issuer and the
Trustee may charge a Holder for their expenses in replacing a Note.


 


Every replacement Note is an additional obligation
of the Issuer and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.


 


SECTION 2.8                                             Outstanding
Notes.


 


The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those described
in this Section 2.8 as not outstanding. 
Except as set forth in Section 2.9 hereof, a Note does not cease to
be outstanding because the Issuer or an Affiliate of the Issuer holds the Note.


 


If a Note is replaced pursuant to Section 2.7
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide purchaser.


 


If the principal amount of any Note is considered
paid under Section 4.1 hereof, it ceases to be outstanding and interest on
it ceases to accrue.


 


If the Paying Agent (other than the Issuer, a
Subsidiary or an Affiliate of any thereof) holds, on a redemption date or
maturity date, money sufficient to pay Notes payable on that date, then on and
after that date such Notes shall be deemed to be no longer outstanding and
shall cease to accrue interest.


 


SECTION 2.9                                             Treasury Notes.


 


In determining whether the Holders of the required
aggregate principal amount of Notes have concurred in any direction, waiver or
consent, Notes owned by the Issuer or by any Affiliate of the Issuer shall be
considered as though 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 shown on the register as being owned
shall be so disregarded.  Notwithstanding
the foregoing, Notes that are to be acquired by the Issuer or an Affiliate of
the Issuer pursuant to an exchange offer, tender offer or other agreement shall
not be deemed to be owned by such entity until legal title to such Notes passes
to such entity.


 


37

















 


SECTION 2.10                                       Temporary Notes.


 


Until Certificated Notes are ready for delivery, the
Issuer may prepare and the Trustee shall authenticate temporary Notes upon a written
order of the Issuer signed by two Officers of the Issuer.  Temporary Notes shall be substantially in the
form of Certificated Notes but may have variations that the Issuer considers
appropriate for temporary Notes.  Without
unreasonable delay, the Issuer shall prepare and the Trustee shall upon receipt
of a written order of the Issuer signed by two Officers authenticate Certificated
Notes in exchange for temporary Notes.


 


Holders of temporary Notes shall be entitled to all
of the benefits of this Indenture.


 


SECTION 2.11                                       Cancellation.


 


The Issuer at any time may deliver to the Trustee
for cancellation any Notes previously authenticated and delivered hereunder or
which the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly cancelled by the Trustee.  All Notes surrendered for registration of
transfer, exchange or payment, if surrendered to any Person other than the
Trustee, shall be delivered to the Trustee. 
The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation.  Subject to Section 2.7 hereof, the
Issuer may not issue new Notes to replace Notes that they have redeemed or paid
or that have been delivered to the Trustee for cancellation.  All cancelled Notes held by the Trustee shall
be disposed of in accordance with its customary practice, and certification of
their disposal delivered to the Issuer, unless by a written order, signed by an
Officer of the Issuer, the Issuer shall direct that cancelled Notes be returned
to it.


 


SECTION 2.12                                       Defaulted
Interest.


 


If the Issuer defaults in a payment of interest on
the Notes, it shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted interest, to the Persons
who are Holders on a subsequent special record date, which date shall be at the
earliest practicable date but in all events at least five (5) Business
Days prior to the payment date, in each case at the rate provided in the Notes
and in Section 4.1 hereof; provided that
if the Issuer pays the defaulted interest prior to the date that is 30 days
after the date of default in payment of interest, payment shall be to the
record Holders as of the original record date. 
If such default in interest continues for 30 days, the Issuer shall fix
or cause to be fixed each such special record date and payment date and shall
promptly thereafter notify the Trustee in writing of any such date.  At least fifteen (15) days before the special
record date, the Issuer (or the Trustee, in the name and at the written request
and expense of the Issuer) shall deliver or cause to be delivered to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.


 


SECTION 2.13                                       Record Date.


 


The record date for purposes of determining the
identity of Holders entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture shall be determined as provided
for in TIA § 316(c).


 


SECTION 2.14                                       Computation of
Interest.


 


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


 


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SECTION 2.15                                       CUSIP Number.


 


The Issuer in issuing the Notes may use a “CUSIP”
and/or ISIN or other similar number, and if it does so, the Issuer may use the
CUSIP and/or ISIN or other similar number 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 and/or ISIN or other similar number 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
and/or ISIN or other similar number.


 


SECTION 2.16                                       Special
Transfer Provisions.


 


Unless and until a Transfer Restricted Note is
transferred or exchanged pursuant to an exemption under the Securities Act or
under an effective registration statement under the Securities Act, the following
provisions shall apply:


 


(a)                                   Transfers to
QIBs.  The following provisions shall
apply with respect to the registration of any proposed transfer of a Transfer
Restricted Note (other than pursuant to Regulation S):


 


(i)                                      The Registrar shall register
the transfer of a Transfer Restricted Note by a Holder to a QIB if such
transfer is being made by a proposed transferor who has provided the Registrar
with (a) an appropriately completed certificate of transfer in the form attached
to the Note and (b) a letter substantially in the form set forth in Exhibit C
hereto.


 


(ii)                                   If the proposed transferee
is an Agent Member and the Transfer Restricted Note to be transferred consists
of an interest in the Regulation S Global Note, upon receipt by the Registrar
of (x) the items required by paragraph (i) above and (y) instructions
given in accordance with the Depositary’s and the Registrar’s procedures therefor,
the Registrar shall reflect on its books and records the date and an increase
in the principal amount of the QIB Global Note in an amount equal to the
principal amount of the beneficial interest in the Regulation S Global Note to
be so transferred, and the Registrar shall reflect on its books and records the
date and an appropriate decrease in the principal amount of such Regulation S
Global Note.


 


(b)                                  Transfers
Pursuant to Regulation S.  The
Registrar shall register the transfer of any Regulation S Global Note without requiring
any additional certification.  The
following provisions shall apply with respect to registration of any proposed
transfer of a Transfer Restricted Note pursuant to Regulation S:


 


(i)                                      The Registrar shall register
any proposed transfer of a Transfer Restricted Note pursuant to Regulation S by
a Holder upon receipt of (a) an appropriately competed certificate of
transfer in the form attached to the Note and (b) a letter substantially
in the form set forth in Exhibit D hereto from the proposed transferor.


 


(ii)                                   If the proposed transferee
is an Agent Member holding a beneficial interest in a QIB Global Note and the
Transfer Restricted Note to be transferred consists of an interest in a QIB
Global Note, upon receipt by the Registrar of (x) the letter, if any, required
by paragraph (i) above and (y) instructions in accordance with the
Depositary’s and the Registrar’s procedures therefor, the Registrar shall
reflect on its books and 


 


39

















 


records the date and an increase in the principal amount of the
Regulation S Global Note in an amount equal to the principal amount of the
beneficial interest in the QIB Global Note to be transferred, and the Registrar
shall reflect on its books and records the date and an appropriate decrease in
the principal amount of the QIB Global Note.


 


(c)                                   Exchange Offer.  Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Issuer shall issue and,
upon receipt of an authentication order in accordance with Section 2.2,
the Trustee shall authenticate, one or more Global Notes not bearing the
Restricted Notes Legend in an aggregate principal amount equal to the principal
amount of the beneficial interests in the Global Notes that are Transfer Restricted
Notes tendered for acceptance in accordance with the Exchange Offer and
accepted for exchange in the Exchange Offer.


 


(d)                                  Concurrently
with the issuance of such Global Notes, the Registrar shall cause the aggregate
principal amount of the applicable Transfer Restricted Notes to be reduced
accordingly, and the Registrar shall deliver to the Persons designated by the
Holders of Transfer Restricted Notes so accepted Global Notes not bearing the
Restricted Notes Legend in the appropriate principal amount.


 


(e)                                   Restricted
Notes Legend.  Upon the
transfer, exchange or replacement of Notes not bearing the Restricted Notes
Legend, the Registrar shall deliver Notes that do not bear the Restricted Notes
Legend.  Upon the transfer, exchange or
replacement of Notes bearing the Restricted Notes Legend, the Registrar shall
deliver only Notes that bear the Restricted Notes Legend unless there is
delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the
Issuer and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.


 


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


 


The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to this Section 2.16.


 


SECTION 2.17                                       Issuance of
Additional Notes.


 


The Issuer shall be entitled to issue Additional
Notes under this Indenture that shall have identical terms as the Initial
Notes, other than with respect to the date of issuance, issue price, amount of
interest payable on the first interest payment date applicable thereto and any
customary escrow provisions (and, if such Additional Notes shall be issued in
the form of Transfer Restricted Notes, other than with respect to transfer
restrictions, any Registration Rights Agreement and Additional Interest with
respect thereto); provided that such issuance is
not prohibited by the terms of this Indenture, including Section 4.9.  The Initial Notes and any Additional Notes
and all Exchange Notes shall be treated as a single class for all purposes
under this Indenture.


 


With respect to any Additional Notes, the Issuer
shall set forth in a resolution of its Board of Directors and in an Officers’
Certificate, a copy of each of which shall be delivered to the Trustee, the following
information:


 


40

















 


(1)                                  the aggregate
principal amount of such Additional Notes to be authenticated and delivered pursuant
to this Indenture;


 


(2)                                  the issue
price, the Issue Date, the CUSIP number of such Additional Notes, the first
interest payment date and the amount of interest payable on such first interest
payment date applicable thereto and the date from which interest shall accrue;
and


 


(3)                                  whether such
Additional Notes shall be Transfer Restricted Notes.


 


ARTICLE
III


 


REDEMPTION
AND PREPAYMENT


 


SECTION 3.1                                             Notices to
Trustee.


 


If the Issuer elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.7 hereof, it shall furnish to
the Trustee, at least thirty-five (35) days (or such shorter period as is
acceptable to the Trustee) before a date fixed for redemption (the “redemption date”), an Officers’ Certificate setting forth (i) the
section of this Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the
Redemption Price.


 


If the Issuer is required to make an Offer to
Purchase pursuant to Section 4.10 or 4.14 hereof, it shall furnish to the
Trustee, at least thirty-five (35) days (or such shorter period as is acceptable
to the Trustee) before the scheduled purchase date, an Officers’ Certificate
setting forth (i) the section of this Indenture pursuant to which the offer
to purchase shall occur, (ii) the terms of the offer, (iii) the principal
amount of Notes to be purchased, (iv) the purchase price and (v) the
purchase date and further setting forth a statement to the effect that (a) the
Issuer or one of its Restricted Subsidiaries has effected an Asset Sale and
there are Excess Proceeds aggregating more than $10.0 million or (b) a
Change of Control has occurred, as applicable.


 


SECTION 3.2                                             Selection of
Notes to Be Redeemed.


 


If less than all of the Notes are to be redeemed at
any time, the Trustee shall select the Notes to be redeemed among the Holders
in compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate (and in a manner that complies with applicable
requirements of the Depositary); provided that
no Notes of $2,000 or less shall be redeemed in part.  Notices of redemption shall be sent
electronically or mailed by first class mail at least 30 but not more than 60
days before the redemption date to each Holders to be redeemed at its
registered address.  If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed.  A new Note in principal amount equal to the
unredeemed portion of the original Note will be issued in the name of the
Holder thereof upon cancellation of the original Note.  On and after the redemption date, interest
ceases to accrue on Notes or portions of them called for redemption.  The Trustee shall make the selection from the
Notes outstanding and not previously called for redemption and shall promptly
notify the Issuer in writing of the Notes selected for redemption.  The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
the Notes that have denominations larger than $2,000.


 


41

















 


SECTION 3.3                                             Notice of
Redemption.


 


Subject to the provisions of Section 3.9, at
least 30 days but not more than 60 days before a redemption date, the Issuer
shall send or cause to be sent by electronic transmission or by first class
mail, a notice of redemption to each Holder whose Notes are to be redeemed.


 


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


 


(1)                                  the redemption
date;


 


(2)                                  the Redemption
Price;


 


(3)                                  if any Note is
being redeemed in part, the portion of the principal amount of such Notes to be
redeemed and that, after the redemption date, upon surrender of such Note, a
new Note or Notes in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Note;


 


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


 


(5)                                  that Notes
called for redemption must be surrendered to the Paying Agent to collect the
Redemption Price;


 


(6)                                  that, unless
the Issuer defaults in making such redemption payment, interest, if any, on
Notes called for redemption ceases to accrue on and after the redemption date;


 


(7)                                  the paragraph
of the Notes and/or Section of this Indenture pursuant to which the Notes
called for redemption are being redeemed; and


 


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


 


At the Issuer’s request, the Trustee shall give the
notice of redemption in the Issuer’s name and at the Issuer’s expense; provided, however, that
the Issuer shall have delivered to the Trustee at least 45 days prior to the
redemption date (or such shorter period as is acceptable to the Trustee), an
Officers’ Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in the notices as provided in the preceding
paragraph.  The notice sent in the manner
herein provided shall be conclusively presumed to have been duly given whether
or not a Holder receives such notice.  In
any case, failure to give such notice by electronic transmission or by mail or
any defect in the notice to the Holder of any Note shall not affect the
validity of the proceeding for the redemption of any other Note.


 


SECTION 3.4                                             Effect of
Notice of Redemption.


 


Once notice of redemption is sent in accordance with
Section 3.3 hereof, Notes called for redemption become irrevocably due and
payable on the redemption date at the Redemption Price plus accrued and unpaid
interest, if any, to such date.  A notice
of redemption may not be conditional.


 


SECTION 3.5                                             Deposit of
Redemption of Purchase Price.


 


On or before 10:00 a.m. (New York City time) on
each redemption date or the date on which Notes must be accepted for purchase
pursuant to Section 4.10 or 4.14, the Issuer shall deposit with 


 


42

















 


the Trustee or with the
Paying Agent (other than the Issuer or an Affiliate of the Issuer) money
sufficient to pay the Redemption Price of and accrued and unpaid interest, if
any, on all Notes to be redeemed or purchased on that date.  The Trustee or the Paying Agent shall
promptly return to the Issuer any money deposited with the Trustee or the
Paying Agent by the Issuer in excess of the amounts necessary to pay the
Redemption Price of (including any Applicable Premium), and accrued interest,
if any, on, all Notes to be redeemed or purchased.


 


If Notes called for redemption or tendered in an
Asset Sale Offer or Change of Control Offer are paid or if Issuer has deposited
with the Trustee or Paying Agent money sufficient to pay the redemption or
purchase price of, and unpaid and accrued interest, if any, on, all Notes to be
redeemed or purchased, on and after the redemption or purchase date, interest,
if any, shall cease to accrue on the Notes or the portions of Notes called for
redemption or tendered and not withdrawn in an Asset Sale Offer or Change of
Control Offer (regardless of whether certificates for such securities are
actually surrendered).  If a Note is
redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest, if
any, shall be paid to the Person in whose name such Note was registered at the
close of business on such record date. 
If any Note called for redemption shall not be so paid upon surrender
for redemption because of the failure of the Issuer to comply with the
preceding paragraph, interest shall be paid on the unpaid principal from the
redemption or purchase date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case, at the
rate provided in the Notes and in Section 4.1 hereof.


 


SECTION 3.6                                             Notes Redeemed
in Part.


 


Upon surrender of a Note that is redeemed in part,
the Issuer shall issue and, upon the written request of an Officer of the
Issuer, the Trustee shall authenticate for the Holder at the expense of the
Issuer a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.


 


SECTION 3.7                                             Optional
Redemption.


 


(a)                                  The Notes may
be redeemed, in whole or in part, at any time prior to May 1, 2014, at the
option of the Issuer upon not less than 30 nor more than 60 days’ prior notice
mailed by first-class mail to each Holder’s registered address, at a Redemption
Price equal to 100% of the principal amount of the Notes redeemed plus the
Applicable Premium as of, and accrued and unpaid interest, if any, to, but not
including, 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).


 


(b)                                 The Notes may
be redeemed, at the option of the Issuer, in whole or in part, at any time on
or after May 1, 2014, upon not less than 30 nor more than 60 days’ notice
at the Redemption Prices (expressed as percentages of the principal amount to
be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but
not including, the redemption date (subject to the right of Holders of record
on the relevant regular record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period beginning on May 1
of the years indicated:


 


	
  Year

  	
   

  	
  Redemption

  Price

  	
   

  
	
  2014

  	
   

  	
  105.250

  	
  %

  
	
  2015

  	
   

  	
  102.625

  	
  %

  
	
  2016 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


43
















 


(c)                                  Notwithstanding
the foregoing, prior to May 1, 2013, the Issuer may, with the net proceeds
of one or more Qualified Equity Offerings, redeem, on one or more occasions, in
whole or in part, up to 35% of the aggregate principal amount of the
outstanding Notes (including Additional Notes) at a Redemption Price equal to
110.500% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to, but not including, 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 principal amount of Notes then outstanding (including
Additional Notes) remains outstanding immediately after the occurrence of any
such redemption (excluding Notes held by the Issuer or its Subsidiaries) and
that any such redemption occurs within 90 days following the date of the
closing of any such Qualified Equity Offering.


 


(d)                                 The Issuer may,
at any time and from time to time, purchase Notes in the open market or
otherwise, subject to compliance with this Indenture and compliance with all
applicable securities laws.


 


SECTION 3.8                                             Mandatory
Redemption.


 


Except as set forth under Sections 3.9, 4.10 and
4.14 hereof, the Issuer shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.


 


SECTION 3.9                                             Offer to
Purchase.


 


In the event that the Issuer shall be required to
commence an Offer to Purchase pursuant to an Asset Sale Offer or a Change of
Control Offer, the Issuer shall follow the procedures specified below.


 


On the Purchase Date, the Issuer shall purchase the
aggregate principal amount of Notes required to be purchased pursuant to Section 4.10
hereof or Section 4.14 hereof (the “Offer Amount”),
or if less than the Offer Amount has been tendered, all Notes tendered in
response to the Offer to Purchase. 
Payment for any Notes so purchased shall be made in the same manner as
interest payments are made.  If the Purchase
Date is on or after an interest record date and on or before the related
interest payment date, any accrued and unpaid interest, if any, shall be paid
to the Person in whose name a Note is registered at the close of business on
such record date, and no Additional Interest, if any, shall be payable to the
Holders who tender Notes pursuant to the Offer to Purchase.  The Issuer shall notify the Trustee at least
15 days (or such shorter period as is acceptable to the Trustee) prior to the
delivering of the Offer of the Issuer’s obligation to make an Offer to Purchase,
and the Offer shall be sent electronically or mailed by the Issuer or, at the
Issuer’s request, by the Trustee in the name and at the expense of the
Issuer.  The Offer shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Offer to Purchase.


 


On or before 10:00 a.m. (New York City time) on
each Purchase Date, the Issuer shall irrevocably deposit with the Trustee or
Paying Agent (other than the Issuer or an Affiliate of the Issuer) in
immediately available funds the aggregate purchase price equal to the Offer
Amount, together with accrued and unpaid interest, if any, thereon, to be held
for payment in accordance with the terms of this Section 3.9.  On the Purchase Date, the Issuer shall, to
the extent lawful, (i) accept for payment, on a pro rata
basis to the extent necessary, the Offer Amount of Notes or portions thereof
tendered pursuant to the Offer to Purchase, or if less than the Offer Amount
has been tendered, all Notes tendered, (ii) deliver or cause the Paying
Agent or Depositary, as the case may be, to deliver to the Trustee Notes so
accepted and (iii) deliver to the Trustee an Officers’ Certificate stating
that such Notes or portions thereof were accepted for payment by the Issuer in
accordance with the terms of this Section 3.9.  The Issuer, the Depositary


 


44

















 


or the Paying Agent, as the
case may be, shall promptly (but in any case not later than three (3) Business
Days after the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Issuer for purchase, plus any accrued and unpaid interest, if
any, thereon, and the Issuer shall promptly issue a new Note, and the Trustee,
at the written request of the Issuer, shall authenticate and mail or deliver at
the expense of the Issuer such new Note to such Holder, equal in principal
amount to any unpurchased portion of such Holder’s Notes surrendered.  Any Note not so accepted shall be promptly
mailed or delivered by the Issuer to the Holder thereof.  The Issuer shall publicly announce in a
newspaper of general circulation or in a press release provided to a nationally
recognized financial wire service the results of the Offer to Purchase on the
Purchase Date.


 


Other than as specifically provided in this Section 3.9,
any purchase pursuant to this Section 3.9 shall be made pursuant to the
provisions of Sections 3.1 through 3.6 hereof.


 


ARTICLE IV


 


COVENANTS


 


SECTION 4.1                                             Payment of
Notes.


 


(a)                                  The Issuer
shall pay or cause to be paid the principal of, premium, if any, and interest
on the Notes on the dates and in the manner provided in the Notes.  Principal, premium, if any, and interest shall
be considered paid for all purposes hereunder on the date the Paying Agent, if
other than the Issuer or a Subsidiary thereof, holds, as of 10:00 a.m.
(New York City time), money deposited by the Issuer in immediately available
funds and designated for and sufficient to pay all such principal, premium, if
any, and interest then due.


 


(b)                                 The Issuer
shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in
excess of the then applicable interest rate on the Notes to the extent lawful;
it shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.


 


SECTION 4.2                                             Maintenance of
Office or Agency.


 


The Issuer shall maintain an office or agency (which
may be an office of the Trustee or an affiliate of the Trustee or Registrar)
where Notes may be surrendered for registration of transfer or for exchange and
where notices and demands to or upon the Issuer in respect of the Notes and
this Indenture may be served.  The Issuer
shall give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. 
The Issuer hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Issuer in accordance with Section 2.3
hereof.  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 of the Trustee
and the Issuer hereby appoints the Trustee its agent to receive all such
presentations, surrenders, notices and demands.


 


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 any such designation or rescission and
of any change in the location of any such other office or agency.


 


45

















 


The Issuer hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the Issuer in accordance
with Section 2.3 hereof.


 


SECTION 4.3                                             Provision of
Financial Information.


 


Whether or not required by the Commission, so long
as any Notes are outstanding (unless defeased in a legal or covenant defeasance
pursuant to Article VIII hereof), the Issuer will have its annual
financial statements audited, and its interim financial statements reviewed, by
a nationally recognized firm of independent accountants and will furnish to the
Holders, no later than 90 days after the end of each fiscal year (in the case
of annual financial statements) and 45 days after the end of each of the first
three fiscal quarters (in the case of quarterly financial statements), all
quarterly and annual financial statements in the form included in the Offering
Memorandum prepared in accordance with GAAP 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 those 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. 
To the extent that the Issuer does not file such information with the
Commission, the Issuer will deliver such information and such reports to the
Trustee and post such information and such reports to Intralinks or a
comparable password protected online data system, such that such information
and such reports are available electronically to (a) any Holder, (b) any
beneficial owner of the Notes, who certifies that it is a beneficial owner of
Notes, (c) any prospective investor who certifies that it is a Qualified
Institutional Buyer (as defined in the Securities Act)  or
(d) any securities analyst who certifies that it is a securities analyst
and who requests a password from the Issuer and agrees to treat such
information as confidential.  If at any time
the Issuer is not subject to the reporting requirements of the Exchange Act,
the Issuer will also hold a quarterly conference call to discuss such financial
information.  The conference call will
not be later than five Business Days from the time that the Issuer distributes
the financial information as set forth above.


 


If the Issuer has designated any of its Subsidiaries
as Unrestricted Subsidiaries, then, to the extent that any such Unrestricted
Subsidiary or group of Unrestricted Subsidiaries would (but for its or their being
designated as an Unrestricted Subsidiary or Subsidiaries) constitute a
Significant Subsidiary or Subsidiaries, the quarterly and annual financial
information required by the preceding paragraph shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” of the financial condition and results of
operations of the Issuer and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted Subsidiaries
of the Issuer.


 


Following the consummation of the Exchange Offer (as
defined in the Registration Rights Agreement), whether or not required by the
Commission, the Issuer will file a copy of all of the information and reports
that would be required by the Commission for public availability within the
time periods specified in the Commission’s rules and regulations (unless
the Commission will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request.  In addition, the Issuer and the Guarantors
agree that, for so long as any Notes remain outstanding, they 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.


 


In the event that any parent of the Issuer becomes a
Guarantor or co-obligor of the Notes, the Issuer may satisfy its obligations
under this Section 4.3 with respect to financial information relating to
the Issuer by furnishing financial information relating to such parent; provided that, if required by Regulation S-X, the same is
accompanied by consolidating information that explains in reasonable detail the


 


46

















 


differences between the
information relating to such parent and any of its Subsidiaries other than the
Issuer and its Subsidiaries, on the one hand, and the information relating to
the Issuer, the Subsidiary Guarantors, if any, and the other Subsidiaries of
the Issuer on a standalone basis, on the other hand.


 


Notwithstanding the foregoing, the Issuer will be
deemed to have furnished such reports referred to above to the Holders if it or
any parent of the Issuer has filed such reports with the Commission via the
EDGAR filing system and such reports are publicly available.  In addition, such requirements shall be
deemed satisfied prior to the commencement of the Exchange Offer or the
effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement) by the filing with the Commission of the
Exchange Offer Registration Statement (as defined in the Registration Rights
Agreement) and/or Shelf Registration Statement in accordance with the provisions
of the Registration Rights Agreement, and any amendments thereto, with such
financial information that satisfies Regulation S-X and such registration statement
and/or amendments thereto are filed at times that otherwise satisfy the time
requirements set forth in the first paragraph of this Section 4.3.


 


SECTION 4.4                                             Compliance
Certificate.


 


The Issuer shall deliver to the Trustee, within 120
days after the end of each fiscal year, an Officers’ Certificate stating that
in the course of the performance by the signers of their duties as Officers of
the Issuer they would normally have knowledge of any Default, and further
stating, as to each such Officer signing such certificate, that, to his or her
knowledge, no Default or Event of Default has occurred during such period (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Issuer is taking or proposes to take with respect thereto).


 


The Issuer shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers’ Certificate specifying such Default
or Event of Default and what action the Issuer is taking or proposes to take
with respect thereto.


 


SECTION 4.5                                             Taxes.


 


The Issuer shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency all material taxes, assessments and
governmental levies, except such as are contested in good faith and by appropriate
proceedings and with respect to which appropriate reserves have been taken in
accordance with GAAP or where the failure to effect such payment is not adverse
in any material respect to the Holders.


 


SECTION 4.6                                             Stay, Extension
and Usury Laws.


 


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


 


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SECTION 4.7                                             Limitation on
Restricted Payments.


 


The Issuer will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment
unless, at the time of and after giving effect to the proposed Restricted
Payment:


 


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


 


(b)                                  after giving
effect to such Restricted Payment on a pro forma basis, the Issuer would be
permitted to Incur at least $1.00 of additional Debt (other than Permitted
Debt) pursuant to the provisions described in the first paragraph under Section 4.9;
and


 


(c)                                   after giving
effect to such Restricted Payment on a pro forma basis, the aggregate amount
expended or declared for all Restricted Payments made on or after the Issue
Date (excluding Restricted Payments permitted by clauses (ii), (iii), (iv),
(v), (vi), (vii) and (viii) of the next succeeding paragraph), shall
not exceed the sum (without duplication) of


 


(1)                                 50% of the
Consolidated Net Income (or, if Consolidated Net Income shall be a deficit,
minus 100% of such deficit) of the Issuer accrued on a cumulative basis during
the period (taken as one accounting period) from January 1, 2010 and
ending on the last day of the fiscal quarter for which consolidated financial
statements are available ended immediately prior to the date of such proposed
Restricted Payment, plus


 


(2)                                 100% of the
aggregate net proceeds (including the Fair Market Value of property other than
cash) received by the Issuer subsequent to the Issue Date either (i) as a
contribution to its common equity capital or (ii) from the issuance and
sale (other than to a Subsidiary) of its Qualified Capital Interests, including
Qualified Capital Interests issued upon the conversion of Debt or Redeemable
Capital Interests of the Issuer, and from the exercise of options, warrants or
other rights to purchase such Qualified Capital Interests (other than, in each
case, Capital Interests or Debt sold to a Subsidiary of the Issuer), plus


 


(3)                                 100% of the net
reduction in Investments (other than Permitted Investments), subsequent to the
Issue Date, in any Person, resulting from (i) payments of interest on
Debt, dividends, repayments of loans or advances (but only to the extent such interest,
dividends or repayments are not included in the calculation of Consolidated Net
Income), in each case to the Issuer or any Restricted Subsidiary from any
Person or (ii) the redesignation of any Unrestricted Subsidiary as a
Restricted Subsidiary (which shall be calculated, in the case of this clause
(ii), as the Fair Market Value of the Issuer’s proportionate interest in such
Subsidiary immediately following such redesignation, as determined in good
faith by the Board of Directors), in each case, not to exceed in the case of
any Person the amount of Investments (other than Permitted Investments) previously
made by the Issuer or any Restricted Subsidiary in such Person.


 


Notwithstanding the
foregoing provisions, the Issuer and its Restricted Subsidiaries may take the
following actions, provided that,
in the case of clauses (iii), (iv) and (x) below, immediately after
giving effect to such action, no Default or Event of Default has occurred and
is continuing:


 


48

















 


(i)                                     the payment of any dividend
on, or redemption of, Capital Interests in the Issuer or a Restricted
Subsidiary within 60 days after declaration thereof if at the declaration date
such payment would not have been prohibited by the foregoing provisions of this
Section 4.7;


 


(ii)                                  the retirement of any
Qualified Capital Interests of the Issuer by conversion into, or by or in
exchange for, Qualified Capital Interests, or out of net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Issuer) of
other Qualified Capital Interests of the Issuer;


 


(iii)                               the redemption, defeasance,
repurchase or acquisition or retirement for value of any Debt of the Issuer or
a Guarantor that is subordinate in right of payment to the Notes or the
applicable Note Guarantee out of the net cash proceeds of a substantially
concurrent issue and sale (other than to a Subsidiary of the Issuer) of (x) new
subordinated Debt of the Issuer or such Guarantor, as the case may be, Incurred
in accordance with this Indenture or (y) Qualified Capital Interests of
the Issuer;


 


(iv)                              the purchase, redemption,
retirement or other acquisition for value of Capital Interests in the Issuer
held by current or former employees, directors, officers, managers or
consultants of the Issuer or any Restricted Subsidiary (or their estates or
beneficiaries under their estates) upon death, disability, retirement or termination
of employment or pursuant to the terms of any agreement under which such
Capital Interests were issued; provided that
the aggregate cash consideration paid for all such purchases, redemptions,
retirements or other acquisitions of such Capital Interests does not exceed
$2.5 million in any calendar year (which amount shall be increased by (x) the
amount of any net cash proceeds of key man life insurance policies received by
the Issuer and its Restricted Subsidiaries after the Issue Date that have not
been applied to the payment of Restricted Payments pursuant to this clause (iv) and
(y) the amount of net cash proceeds received by the Issuer and its
Restricted Subsidiaries after the Issue Date from the issuance and sale of
Capital Interests in the Issuer to employees, directors, officers, managers or
consultants of the Issuer or any Restricted Subsidiary); provided that
any unused amounts in any calendar year may be carried forward to one or more
future periods; provided, further,  that the aggregate amount of repurchases made pursuant to
this clause (iv) may not exceed $5.0 million in any calendar year;


 


(v)                                 the repurchase of Capital
Interests deemed to occur upon the exercise of stock options, warrants or other
convertible or exchangeable securities to the extent such Capital Interests
represent a portion of the exercise price of those stock options, warrants or
other convertible or exchangeable securities;


 


(vi)                              the prepayment of
intercompany Debt, the Incurrence of which was permitted pursuant to Section 4.9;


 


(vii)                           cash payment, in lieu of
issuance of fractional shares in connection with the exercise of warrants,
options or other securities convertible into or exchangeable for the Capital
Interests of the Issuer or a Restricted Subsidiary;


 


49

















 


(viii)                        the declaration and payment
of dividends to holders of any class or series of Redeemable Capital Interests
of the Issuer or any Restricted Subsidiary issued or Incurred in compliance
with Section 4.9 to the extent such dividends are included in the
definition of “Consolidated Fixed Charges;”


 


(ix)                                upon the occurrence of a
Change of Control Triggering Event or an Asset Sale, the defeasance,
redemption, repurchase or other acquisition of any subordinated Debt pursuant
to provisions substantially similar to Section 4.10 and Section 4.14
at a purchase price not greater than 101% of the principal amount thereof (in
the case of a Change of Control Triggering Event) or at a percentage of the
principal amount thereof not higher than 100% of the principal amount thereof
(in the case of an Asset Sale), plus any accrued and unpaid interest thereon; provided that prior to or contemporaneously with such
defeasance, redemption, repurchase or other acquisition, the Issuer has made an
Offer to Purchase with respect to the Notes and has repurchased all Notes
validly tendered for payment and not withdrawn in connection therewith;


 


(x)                                   other Restricted Payments
not in excess of $25.0 million in the aggregate since the Issue Date; and


 


(xi)                                the payment to the Permitted
Holders of up to $5.5 million in the aggregate of fees and expenses related to
the transactions disclosed in the Offering Memorandum.


 


If any Person in which an Investment is made, which
Investment constitutes a Restricted Payment when made, thereafter becomes a
Restricted Subsidiary in accordance with this Indenture, all such Investments
previously made in such Person shall no longer be counted as Restricted
Payments for purposes of calculating the aggregate amount of Restricted
Payments pursuant to clause (c) of the first paragraph under this Section 4.7,
in each case to the extent such Investments would otherwise be so counted.


 


If the Issuer or a Restricted Subsidiary transfers,
conveys, sells, leases or otherwise disposes of an Investment in accordance
with Section 4.10, which Investment was originally included in the
aggregate amount expended or declared for all Restricted Payments pursuant to
clause (c) of the first paragraph under this Section 4.7, the
aggregate amount expended or declared for all Restricted Payments shall be reduced
by the Net Cash Proceeds from the transfer, conveyance, sale, lease or other
disposition of such Investment, to the extent originally included in the
aggregate amount expended or declared for all Restricted Payments pursuant to
clause (c) of the first paragraph under this Section 4.7.


 


For purposes of this Section 4.7, if a
particular Restricted Payment involves a non-cash payment, including a
distribution of assets, then such Restricted Payment shall be deemed to be an
amount equal to the cash portion of such Restricted Payment, if any, plus an
amount equal to the Fair Market Value of the non-cash portion of such Restricted
Payment.


 


SECTION 4.8                                             Limitation on
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.


 


The Issuer will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, cause or suffer to exist or
become effective or enter into any encumbrance or restriction on the ability of
any Restricted Subsidiary to (i) pay dividends or make any other
distributions on its Capital Interests owned by the Issuer or any Restricted
Subsidiary or pay any Debt or other obligation owed to the 


 


50

















 


Issuer or any Restricted Subsidiary, (ii) make
loans or advances to the Issuer or any Restricted Subsidiary thereof or (iii) transfer
any of its property or assets to the Issuer or any Restricted Subsidiary.


 


However, the preceding restrictions will not apply
to the following encumbrances or restrictions existing under or by reason of:


 


(a)                                  any encumbrance
or restriction in existence on the Issue Date and any amendments,
modifications, restatements, renewals, restructurings, increases, supplements,
refundings, replacements or refinancings thereof, provided that
the amendments, modifications, restatements, renewals, restructurings,
increases, supplements, refundings, replacement or refinancings, in the good
faith judgment of the Issuer, are no more restrictive, taken as a whole, with
respect to such dividend or other payment restrictions than those contained in
these agreements on the Issue Date or refinancings thereof;


 


(b)                                 any encumbrance
or restriction pursuant to an agreement relating to an acquisition of property
or assets, so long as the encumbrances or restrictions in any such agreement relate
solely to the property or assets so acquired (and are not or were not created
in anticipation of or in connection with the acquisition thereof);


 


(c)                                  any encumbrance
or restriction which exists with respect to a Person that becomes a Restricted
Subsidiary or merges with or into a Restricted Subsidiary of the Issuer on or
after the Issue Date, which is in existence at the time such Person becomes a
Restricted Subsidiary, but not created in connection with or in anticipation of
such Person becoming a Restricted Subsidiary, and which is not applicable to
any Person or the property or assets of any Person other than such Person or
the property or assets of such Person becoming a Restricted Subsidiary;


 


(d)                                 any encumbrance
or restriction pursuant to an agreement effecting a permitted renewal,
refunding, replacement, refinancing or extension of Debt issued pursuant to an
agreement containing any encumbrance or restriction referred to in the
foregoing clauses (a) through (c), so long as the encumbrances and
restrictions contained in any such refinancing agreement are no less favorable
in any material respect to the Holders than the encumbrances and restrictions
contained in the agreements governing the Debt being renewed, refunded,
replaced, refinanced or extended in the good faith judgment of the Board of Directors
of the Issuer;


 


(e)                                  customary
provisions restricting subletting or assignment of any lease, contract, or
license of the Issuer or any Restricted Subsidiary or provisions in agreements
that restrict the assignment of such agreement or any rights thereunder;


 


(f)                                    any encumbrance
or restriction by reason of applicable law, rule, regulation or order;


 


(g)                                 any encumbrance
or restriction under a Credit Facility permitted under this Indenture, this
Indenture, the Notes and the Note Guarantees;


 


(h)                                 any encumbrance
or restriction imposed under any agreement for the sale of assets pending the
closing of such sale, including, without limitation, any agreement for the sale
or other disposition of a Restricted Subsidiary that restricts distributions by
that Restricted Subsidiary pending its sale or other disposition;


 


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


 


51

















 


(j)                                     Purchase Money
Debt (including Capital Lease Obligations) incurred in compliance with Section 4.9
for property acquired in the ordinary course of business that imposes restrictions
on that property of the nature described in clause (iii) of the first
paragraph hereof;


 


(k)                                  Liens securing,
and other restrictions contained in agreements governing, Debt otherwise
permitted to be incurred under this Indenture, including the provisions of Section 4.12;


 


(l)                                     customary
provisions limiting the disposition or distribution of assets or property in
joint venture agreements, asset sale agreements, sale-leaseback agreements,
stock sale agreements and other similar agreements otherwise permitted by this
Indenture and entered into with the approval of the Issuer’s Board of
Directors, which limitation is applicable only to the assets that are the
subject of such agreements; and


 


(m)                               any Non-Recourse
Receivable Subsidiary Indebtedness or other contractual requirements of a
Receivable Subsidiary that is a Restricted Subsidiary in connection with a Qualified
Receivables Transaction; provided that
such restrictions apply only to such Receivable Subsidiary or the receivables
and related assets described in the definition of “Qualified Receivables
Transaction” which are subject to such Qualified Receivables Transaction.


 


SECTION 4.9                                             Limitation on
Incurrence of Debt.


 


The Issuer will not, and will not permit any of its
Restricted Subsidiaries to, Incur any Debt (including Acquired Debt); provided that the Issuer and any of its Restricted Subsidiaries
that is a Guarantor may Incur Debt (including Acquired Debt) if, immediately
after giving effect to the Incurrence of such Debt and the receipt and
application of the proceeds therefrom, (a) the Consolidated Fixed Charge
Coverage Ratio of the Issuer would be greater than (i) on or prior to June 30,
2011, 2.0:1.0, (ii) following June 30, 2011 and on or prior to June 30,
2012, 2.25:1.0 and (iii) following June 30, 2012, 2.5:1.0 and (b) no
Default or Event of Default shall have occurred and be continuing at the time
or as a consequence of the Incurrence of such Debt.


 


Notwithstanding the first paragraph above, the
Issuer and its Restricted Subsidiaries may Incur Permitted Debt.


 


For purposes of determining compliance with this Section 4.9,
(x) Debt outstanding or Incurred under any Credit Facility on the Issue
Date shall at all times be treated as Incurred pursuant to clause (i) of
the definition of “Permitted Debt,” and may not be re-classified, (y) Guarantees
or obligations with respect to letters of credit supporting Debt otherwise
included in the determination of such particular amount shall not be included and
(z) except as provided above, in the event that an item of Debt meets the
criteria of more than one of the types of Debt described above, including
categories of Permitted Debt and the first paragraph of this Section 4.9,
the Issuer, in its sole discretion, shall classify, and from time to time may
reclassify, all or any portion of such item of Debt and may divide an item into
more than one type of Debt.


 


The accrual of interest, the accretion or
amortization of original issue discount and the payment of interest on Debt in
the form of additional Debt, or payment of dividends on Capital Interests in
the form of additional shares of Capital Interests with the same terms or the
reclassification of Capital Interests as Debt due to a change in GAAP will not be
deemed to be an Incurrence of Debt or issuance of Capital Interests for
purposes of this Section 4.9.


 


For purposes of determining compliance with any U.S.
dollar-denominated restriction on the Incurrence of Debt, the U.S.
dollar-equivalent principal amount of Debt denominated in a foreign


 


52

















 


currency shall be calculated
based on the relevant currency exchange rate in effect on the date such Debt
was Incurred, in the case of term Debt, or first committed, in the case of
revolving credit Debt; provided that
if such Debt is Incurred to refinance other Debt denominated in a foreign
currency, and such refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so
long as the principal amount of such refinancing Debt does not exceed the
principal amount of such Debt being refinanced.


 


SECTION 4.10                                       Limitation on
Asset Sales.


 


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


 


(1)                                  the Issuer (or
the Restricted Subsidiary, as the case may be) receives consideration at the
time of the Asset Sale at least equal to the Fair Market Value of the assets or
Capital Interests issued or sold or otherwise disposed of;


 


(2)                                  at least 75% of
the consideration received in the Asset Sale by the Issuer or such Restricted
Subsidiary is in the form of cash or Eligible Cash Equivalents.  For purposes of this provision, each of the
following will be deemed to be cash:


 


(a)                                  any liabilities, as shown on
the most recent consolidated balance sheet of the Issuer or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
Notes or any Note Guarantee) that are assumed by the transferee of any such
assets pursuant to a customary assignment and assumption agreement that
releases the Issuer or such Restricted Subsidiary from further liability;


 


(b)                                 any securities, notes or
other obligations received by the Issuer or any such Restricted Subsidiary from
such transferee that are converted by the Issuer or such Restricted Subsidiary
into cash within 180 days of their receipt to the extent of the cash received
in that conversion; and


 


(c)                                  any Designated Non-cash
Consideration received by the Issuer or any Restricted Subsidiary in such Asset
Sale having an aggregate Fair Market Value, taken together with all other
Designated Non-cash Consideration received pursuant to this clause (c) that
is at that time outstanding, not to exceed the greater of (x) $25.0
million and (y) 3.0% of Total Assets at the time of the receipt of such
Designated Non-cash Consideration, with the Fair Market Value of each item of
Designated Non-cash Consideration being measured at the time received and
without giving effect to subsequent changes in value; and


 


(3)                                  if such Asset
Sale involves the disposition of Collateral, the Issuer or such Subsidiary has
complied with the provisions of this Indenture and the Security Documents,
including those described under Article X.


 


Within 360 days after the receipt of any Net Cash
Proceeds from an Asset Sale, the Issuer (or the applicable Restricted
Subsidiary, as the case may be) may apply such Net Cash Proceeds at its option:


 


(1)                                  to permanently
repay secured Debt under any Credit Facility and, if the Obligation repaid is
revolving credit Debt, to correspondingly reduce commitments with respect
thereto;


 


53
















 


(2)                                  to acquire
assets constituting, or any Capital Interests of, a Permitted Business, if,
after giving effect to any such acquisition of Capital Interests, such assets
are owned by the Issuer or a Restricted Subsidiary or the Person owning such
Permitted Business is or becomes a Restricted Subsidiary of the Issuer;


 


(3)                                  to make a
capital expenditure in or that is used or useful in a Permitted Business or to
make expenditures for maintenance, repair or improvement of existing properties
and assets in accordance with the provisions of this Indenture;


 


(4)                                  to acquire
other assets that are not classified as current assets under GAAP and that are
used or useful in a Permitted Business; or


 


(5)                                  any combination
of the foregoing;


 


provided that, in the
case of clauses (2) and (3) above, if the Issuer or such Restricted
Subsidiary enters into a binding agreement to make any such acquisition or expenditure
within such 360-day period, but if the consummation of the transactions under
such agreement has not occurred within such 360-day period, and the agreement
has not been terminated, then the 360-day period will be extended to 540 days
to permit such consummation; provided, further, however, if
such consummation does not occur, or such agreement is terminated within such
540-day period, then such Net Cash Proceeds will constitute Excess
Proceeds.  Pending the final application
of any such Net Cash Proceeds within the relevant time periods referred to in
the previous sentence, the Issuer may temporarily reduce revolving credit
borrowings or otherwise invest such Net Cash Proceeds in any manner that is not
prohibited by this Indenture.


 


Subject to the next paragraph, any Net Cash Proceeds
from Asset Sales that are not applied or invested as provided in the preceding
paragraph of this Section 4.10 will constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds
exceeds $10.0 million, within thirty days thereof, the Issuer will make an
Offer to Purchase to all Holders and to all holders of other Debt ranking pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to assets sales, equal to the
Excess Proceeds.  The offer price in any
Offer to Purchase will be equal to 100% of the principal amount plus accrued and
unpaid interest to the date of purchase, and will be payable in cash.  If any Excess Proceeds remain after
consummation of an Offer to Purchase, the Issuer may use those Excess Proceeds
for any purpose not otherwise prohibited by this Indenture (and such remaining
amount shall not be added to any subsequent Excess Proceeds for any purpose
under this Indenture).  If the aggregate
principal amount of Notes and other pari  passu debt tendered into such Offer to Purchase exceeds the
amount of Excess Proceeds, the Trustee will select the Notes to be purchased on
a pro rata basis.  Upon completion of each Offer to Purchase,
the amount of Excess Proceeds will be reset at zero.


 


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


 


SECTION 4.11                                       Limitation on
Transactions with Affiliates.


 


The Issuer will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction or series


 


54

















 


of related transactions,
contract, agreement, loan, advance or guarantee with, or for the benefit of,
any Affiliate of the Issuer (each of the foregoing, an “Affiliate
Transaction”) involving aggregate consideration in excess of $2.5
million, unless:


 


(i)                                     such Affiliate
Transaction is on terms that are not materially less favorable to the Issuer or
the relevant Restricted Subsidiary than those that could reasonably have been
obtained in a comparable arm’s length transaction by the Issuer or such
Restricted Subsidiary with an unaffiliated party; and


 


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


 


(iii)                               with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $15.0 million, the Issuer must obtain and
deliver to the Trustee a written opinion of a nationally recognized investment
banking, accounting or appraisal firm (an “Independent Financial
Advisor”)  stating that
the transaction is fair to the Issuer or such Restricted Subsidiary, as the
case may be, from a financial point of view.


 


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


 


(1)                                  Restricted
Payments that are permitted by Section 4.7 and Permitted Investments
permitted under this Indenture;


 


(2)                                  the payment of
reasonable and customary fees, expenses and indemnities to members of the Board
of Directors of the Issuer or a Restricted Subsidiary;


 


(3)                                  the payment of
reasonable and customary compensation and other benefits (including retirement,
health, option, deferred compensation and other benefit plans) and indemnities
to officers and employees of the Issuer or any Restricted Subsidiary as
determined by the Board of Directors thereof in good faith;


 


(4)                                  payments by the
Issuer or any of its Restricted Subsidiaries to any of the Permitted Holders
made for any financial advisory, financing, underwriting or placement services
or in respect of other investment banking activities, including, without limitation,
in connection with acquisitions or divestitures, which payments are approved by
a majority of the Disinterested Directors in good faith; provided that
the aggregate amount of such payments may not exceed $5.0 million in any
calendar year;


 


(5)                                  transactions
between or among the Issuer and/or its Restricted Subsidiaries;


 


(6)                                  any agreement
or arrangement as in effect on the Issue Date and any amendment or modification
thereto or replacement thereof so long as such amendment or modification or replacement
is not, in the good faith judgment of the Board of Directors of the Issuer,
more disadvantageous to Holders in any material respect;


 


(7)                                  transactions in
which the Issuer delivers to the Trustee a written opinion from an Independent
Financial Advisor to the effect that the transaction is fair, from a financial
point of view, to the Issuer and any relevant Restricted Subsidiaries;


 


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(8)                                  any
contribution of capital to the Issuer;


 


(9)                                  the payment to
the Permitted Holders of up to $5.5 million in the aggregate of fees and
expenses related to the transactions disclosed in the Offering Memorandum;


 


(10)                            transactions
with customers, clients, suppliers or purchasers or sellers of goods or
services, in each case, in the ordinary course of business and on terms that
are no less favorable to the Issuer or such Restricted Subsidiary, as the case
may be, as determined in good faith by the Issuer, than those that could be
obtained in a comparable arm’s length transaction with a Person that is not an
Affiliate of the Issuer; and


 


(11)                            transactions
effected as part of a Qualified Receivables Transaction.


 


SECTION 4.12                                       Limitation on
Liens.


 


(a)                                  The Issuer will
not, and will not permit any of its Restricted Subsidiaries, directly or indirectly,
to enter into, create, incur, assume or suffer to exist any Liens of any kind
on or with respect to the Collateral except Permitted Collateral Liens.


 


(b)                                 Subject to the
immediately preceding sentence, the Issuer will not, and will not permit any of
its Restricted Subsidiaries, directly or indirectly, to enter into, create,
incur; assume or suffer to exist any Liens of any kind, other than Permitted
Liens, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom
except the Collateral without securing the Notes and all other amounts due under
this Indenture and the Security Documents (for so long as such Lien exists)
equally and ratably with (or prior to) the obligation or liability secured by
such Lien.


 


SECTION 4.13                                       Limitation on
Sale and Leaseback Transactions.


 


The Issuer will not, and will not permit any of its
Restricted Subsidiaries to, enter into any Sale and Leaseback Transaction
unless:


 


(i)                                     the
consideration received in such Sale and Leaseback Transaction is at least equal
to the fair market value of the property sold, as determined by a Board
Resolution of the Board of Directors of the Issuer or by an Officers’
Certificate,


 


(ii)                                  prior to and
after giving effect to the Attributable Debt in respect of such Sale and
Leaseback Transaction, the Issuer and such Restricted Subsidiary comply with Section 4.9,
and


 


(iii)                               at or after
such time the Issuer and such Restricted Subsidiary also comply with Section 4.10.


 


SECTION 4.14                                       Offer to
Purchase upon Change of Control.


 


Upon the occurrence of a Change of Control
Triggering Event, the Issuer will make an Offer to Purchase all of the
outstanding Notes at a Purchase Price in cash equal to 101% of the principal
amount tendered, together with accrued interest, if any, to but not including
the Purchase Date (the “Change of Control Payment”).  For purposes of the foregoing, an Offer to
Purchase shall be deemed to have been made if (i) within 30 days following
the date of the occurrence of any Change of Control Triggering Event, the
Issuer commences an Offer to Purchase all outstanding Notes at the Purchase
Price


 


56

















 


(provided that
the running of such 30-day period shall be suspended, for up to a maximum of 30
days, during any period when the commencement of such Offer to Purchase is
delayed or suspended by reason of any court’s or governmental authority’s
review of or ruling on any materials being employed by the Issuer to effect
such Offer to Purchase, so long as the Issuer has used and continues to use its
commercially reasonable efforts to make and conclude such Offer to Purchase
promptly) and (ii) all Notes properly tendered pursuant to the Offer to
Purchase are purchased on the terms of such Offer to Purchase.  The Issuer will be required to comply with
the requirements of Rule 14e-1 under the Exchange Act and any other
applicable securities laws or regulations in connection with any Offer to
Purchase as described above.


 


On the Purchase Date, the Issuer shall, to the
extent lawful, (a) accept for payment all Notes or portions thereof
properly tendered pursuant to such Offer to Purchase, (b) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions thereof so tendered and (c) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an Officers’
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Issuer.  The
Paying Agent will promptly mail (or wire transfer) to each Holders so tendered
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that
each such new Note will be in a principal amount of $2,000 or any integral
multiple of $1,000 in excess thereof. 
The Issuer will announce the results of such Offer to Purchase to all
Holders on or as soon as practicable after the Purchase Date.


 


The Issuer will not be required to make an Offer to
Purchase upon a Change of Control Triggering Event if (i) a third party
makes such Offer to Purchase contemporaneously with or upon a Change of Control
Triggering Event in the manner, at the times and otherwise in compliance with
the requirements of this Indenture and purchases all Notes validly tendered and
not withdrawn under such Offer to Purchase or (ii) a notice of redemption
has been given pursuant Section 3.3.


 


To the extent that any applicable securities laws or
regulations conflict with the Change of Control provisions of this Indenture,
the Issuer will comply with such laws and regulations, and no Default or Event
of Default shall be deemed to have occurred as a result of such compliance.


 


In addition, an Offer to Purchase 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
launching the Offer to Purchase.


 


SECTION 4.15                                       Corporate
Existence.


 


Subject to Section 4.14 and Article V
hereof, as the case may be, the Issuer shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate, partnership, limited liability company or other existence of
each of its Subsidiaries in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Issuer or any
such Subsidiary and the rights (charter and statutory), licenses and franchises
of the Issuer and its Subsidiaries; provided that
the Issuer shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Board of Directors of the Issuer shall determine that the
preservation thereof 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.


 


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SECTION 4.16                                       Limitation on
Layering Debt.


 


The Issuer will not, and will not permit any
Guarantor to, Incur any Debt that pursuant to its terms is subordinate or
junior in right of payment to any Debt unless such Debt is subordinated in
right of payment to the Notes and the Note Guarantees to the same  extent.  For all
purposes under this Indenture, Debt will not be considered subordinate or
junior in right of payment to any other  Debt solely by
virtue of being unsecured or secured to a greater or lesser extent or with
greater or lower priority.


 


SECTION 4.17                                       Business
Activities.


 


The Issuer will not, and will not permit any
Restricted Subsidiary to, engage in any business other than a Permitted
Business.


 


SECTION 4.18                                       Payment for
Consents.


 


The Issuer will not, and will not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is offered
to be paid or agreed to be paid to all Holders that so consent, waive or agree
to amend in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement.


 


SECTION 4.19                                       Impairment of
Security Interests.


 


The Issuer and the Guarantors will not, and will not
permit any of their Restricted Subsidiaries to, (i) take or omit to take
any action with respect to the Collateral that could reasonably be expected to
have the result of affecting or impairing the security interest in the
Collateral in favor of the Collateral Agent for the benefit of the Trustee and
for the benefit of the Holders or (ii) grant to any Person (other than the
Collateral Agent for the benefit of the Trustee and the Holders) any interest
whatsoever in the Collateral, in each case except as provided for in this
Indenture or the Security Documents.


 


SECTION 4.20                                       Additional Note
Guarantees.


 


Following the Issue Date, each newly formed or newly
acquired Domestic Restricted Subsidiary of the Issuer (other than any
Immaterial Subsidiary) shall, within 60 days of its formation or acquisition,
execute and deliver to the Trustee a supplemental indenture or guarantee in the
manner and on the terms set forth in this Indenture.


 


After the Issue Date, the Issuer will cause each of
its Restricted Subsidiaries (other than Immaterial Subsidiaries) that:


 


(a)                                   guarantees any
Debt of the Issuer or a Guarantor; or


 


(b)                                  Incurs any Debt
pursuant to the first paragraph under Section 4.9 or clause (xiii) of the
definition of “Permitted Debt” or not permitted by Section 4.9.


 


in each case, to guarantee
the Notes.


 


The Note Obligations of any Person that is or
becomes a Guarantor after the Issue Date will be secured equally and ratably by
a first-priority Security Interest in the Collateral granted to the Collateral
Agent for the benefit of the Holders. 
Such Guarantor will enter into a joinder agreement to the


 


58

















 


applicable Security
Documents defining the terms of the Security Interests that secure payment and
performance when due of the Notes and take all actions advisable in the opinion
of the Issuer, as set forth in an Officers’ Certificate accompanied by an
Opinion of Counsel to the Issuer to cause the Note Liens created by the Pledge
Agreement to be duly perfected to the extent required by such agreement in accordance
with all applicable law, including the filing of financing statements in such
jurisdictions as requested by the Issuer or the Collateral Agent.


 


SECTION 4.21                                       Limitation on
Creation of Unrestricted Subsidiaries.


 


The Issuer may designate any Subsidiary of the
Issuer to be an “Unrestricted Subsidiary” as provided below, in which event
such Subsidiary and each other Person that is a Subsidiary of such Subsidiary
will be deemed to be an Unrestricted Subsidiary.


 


The Issuer may designate any Subsidiary to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Interests of,
or owns or holds any Lien on any property of, any other Restricted Subsidiary
of the Issuer, provided that either:


 


(x)                                   the Subsidiary
to be so designated is an Immaterial Subsidiary; or


 


(y)                                 immediately
after giving effect to such designation, the Issuer could (A) Incur at
least $1.00 of additional Debt (other than Permitted Debt) pursuant to the
first paragraph of Section 4.9 and (B) make a Restricted Payment in
an amount equal to the greater of the Fair Market Value or book value of such
Subsidiary pursuant to Section 4.7 and such amount is thereafter treated
as a Restricted Payment for the purpose of calculating the amount available for
Restricted Payments thereunder.


 


An Unrestricted Subsidiary may be designated as a
Restricted Subsidiary if (i) all the Debt of such Unrestricted Subsidiary
could be Incurred under Section 4.9 and (ii) all the Liens on the
property and assets of such Unrestricted Subsidiary could be incurred pursuant
to Section 4.12.


 


SECTION 4.22                                       Further
Assurances.


 


The Issuer will, and will cause each of its existing
and future Restricted Subsidiaries to, execute and deliver such additional
instruments, certificates or documents, and take all such actions as may be
reasonably required from time to time in order to:


 


(1)                                  carry out more
effectively the purposes of the Security Documents;


 


(2)                                  create, grant,
perfect and maintain the validity, effectiveness and priority of any of the
Security Documents and the Liens created, or intended to be created, by the
Security Documents; and


 


(3)                                  ensure the
protection and enforcement of any of the rights granted or intended to be
granted to the Trustee under any other instrument executed in connection
therewith.


 


Upon the exercise by the Trustee or any Holder of
any power, right, privilege or remedy under this Indenture or any of the
Security Documents which requires any consent, approval, recording,
qualification or authorization of any governmental authority, the Issuer will,
and will cause each of its Restricted Subsidiaries to, execute and deliver all
applications, certifications, instruments and other documents and papers that
may be reasonably required from the Issuer or any of its Restricted
Subsidiaries for such governmental consent, approval, recording, qualification
or authorization.


 


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SECTION 4.23                                       Italian Pledge
Agreement.


 


Within thirty (30) Business Days of the Issue Date,
the Issuer shall cause Kemet Electronics Corporation to execute and deliver to
the Collateral Agent the Italian Pledge Agreement, in form and substance
reasonably satisfactory to the Collateral Agent, together with all other
certificates, agreements or instruments necessary to perfect the Collateral
Agent’s security interest in the Collateral pledged thereby, subject to any
reservations with respect thereto described in the Offering Memorandum.


 


SECTION 4.24                                       Covenant
Suspension.


 


(a)                                  If on any date
following the Issue Date (i) the Notes have Investment Grade Ratings from
both Rating Agencies and (ii) no Default or Event of Default has occurred
and is continuing under this Indenture (the occurrence of the events described
in the foregoing clauses (i) and (ii) being collectively referred to
as a “Covenant Suspension Event”), the Issuer
and its Restricted Subsidiaries will not be subject to the covenants (the “Suspended Covenants”) contained in:


 


(i)                                     Section 4.7;


 


(ii)                                  Section 4.8


 


(iii)                               Section 4.9;


 


(iv)                              Section 4.10;


 


(v)                                 Section 4.11;


 


(vi)                              Section 4.16;


 


(vii)                           Section 4.17;
and


 


(viii)                        Clause (iii) of
Section 5.1.


 


(b)                                 In the event
that the Issuer and its Restricted Subsidiaries are not subject to the
Suspended Covenants under this Indenture for any period of time as a result of
the foregoing, and on any subsequent date (the “Reversion
Date”) (a) one or both of the Rating Agencies withdraw their
Investment Grade Rating or downgrade the rating assigned to the Notes below an
Investment Grade Rating or (b) the Issuer or any of its affiliates enters
into an agreement to effect a transaction that would result in a Change of
Control and one or more of the Rating Agencies indicate that if consummated,
such transaction (alone or together with any related recapitalization or
refinancing transactions) would cause such Rating Agency to withdraw its
Investment Grade Rating or downgrade the ratings assigned to the Notes below an
Investment Grade Rating, then the Issuer and the Restricted Subsidiaries will
thereafter again be subject to the Suspended Covenants under this Indenture
with respect to future events.  The
period beginning on the date of a Covenant Suspension Event and ending on a
Reversion Date is called a “Suspension Period.”


 


(c)                                  On each
Reversion Date, all Debt incurred, or Redeemable Capital Interests or Preferred
Interests issued, during the Suspension Period will be deemed to have been
outstanding on the Issue Date, so that it is classified as permitted under
clause (iv) of the definition of “Permitted Debt.” Calculations made after
the Reversion Date of the amount available to be made as Restricted Payments
under Section 4.7 will be made as though Section 4.7 had been in
effect since the Issue Date and throughout the Suspension Period.  Restricted Payments made during the
Suspension Period will reduce the amount


 


60

















 


available to be made as Restricted Payments
under the first paragraph of Section 4.7. 
No Default or Event of Default will be deemed to have occurred on the
Reversion Date (or thereafter) under any Suspended Covenant solely as a result
of any actions taken by the Issuer or its Restricted Subsidiaries, or events
occurring, during the Suspension Period. 
For purposes of Section 4.10, on the Reversion Date, the unutilized
Excess Proceeds amount will be reset to zero.


 


ARTICLE V


 


SUCCESSORS


 


SECTION 5.1                                             Consolidation,
Merger, Conveyance, Transfer or Lease.


 


The Issuer will not in any transaction or series of
transactions, consolidate with or merge into any other Person (other than a
merger of a Restricted Subsidiary into the Issuer in which the Issuer is the continuing
Person or the merger of a Restricted Subsidiary into or with another Restricted
Subsidiary or another Person that as a result of such transaction becomes or
merges into a Restricted Subsidiary), or sell, assign, convey, transfer, lease
or otherwise dispose of all or substantially all of the assets of the Issuer
and its Restricted Subsidiaries (determined on a consolidated basis), taken as
a whole, to any other Person, unless:


 


(i)                                     either:  (a) the Issuer shall be the continuing
Person or (b) the Person (if other than the Issuer) formed by such
consolidation or into which the Issuer is merged, or the Person that acquires,
by sale, assignment, conveyance, transfer, lease or other disposition, all or
substantially all of the property and assets of the Issuer (such Person, the “Surviving Entity”), (1) shall be a corporation,
partnership, limited liability company or similar entity organized and validly
existing under the laws of the United States, any political subdivision thereof
or any state thereof or the District of Columbia, (2) shall expressly
assume, by a supplemental indenture, the due and punctual payment of all
amounts due in respect of the principal of (and premium, if any) and interest
on all the Notes and the performance of the covenants and obligations of the
Issuer under this Indenture and (3) shall expressly assume the due and
punctual performance of the covenants and obligations of the Issuer and the
Guarantors under the Security Documents; provided that
at any time the Issuer or its successor is not a corporation, there shall be a
co-issuer of the Notes that is a corporation;


 


(ii)                                  immediately
before and immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including, without limitation, any Debt
Incurred or anticipated to be Incurred in connection with or in respect of such
transaction or series of transactions), no Default or Event of Default shall
have occurred and be continuing or would result therefrom;


 


(iii)                               immediately
after giving effect to any such transaction or series of transactions on a pro
forma basis (including, without limitation, any Debt Incurred or anticipated to
be Incurred in connection with or in respect of such transaction or series of
transactions) as if such transaction or series of transactions had occurred on
the first day of the determination period, the Issuer (or the Surviving Entity
if the Issuer is not continuing) could Incur $1.00 of additional Debt (other
than Permitted Debt) pursuant to the first paragraph of Section 4.9.


 


(iv)                              the Issuer
delivers, or causes to be delivered, to the Trustee an Officers’ Certificate
and an Opinion of Counsel, each stating that such consolidation, merger, sale,
conveyance, assignment, transfer, lease or other disposition complies with the
requirements of this Indenture;


 


61

















 


(v)                                 the Surviving
Entity causes such amendments, supplements or other instruments to be executed,
delivered, filed and recorded in such jurisdictions as may be required by
applicable law to preserve and protect the Lien of the Security Documents on
the Collateral owned by or transferred to the Surviving Entity, together with
such financing statements as may be required to perfect any security interests
in such Collateral which may be perfected by the filing of a financing
statement under the Uniform Commercial Code of the relevant states;


 


(vi)                              the Collateral
owned by or transferred to the Surviving Entity shall (a) continue to
constitute Collateral under this Indenture and the Security Documents, (b) be
subject to the Lien in favor of the Collateral Agent for the benefit of the
Trustee and the Holders, and (c) not be subject to any Lien other than
Permitted Collateral Liens; and


 


(vii)                           the property
and assets of the Person which is merged or consolidated with or into the
Surviving Entity, to the extent that they are property or assets of the types
which would constitute Collateral under the Security Documents, shall be
treated as after-acquired property and the Surviving Entity shall take such
action as may be reasonably necessary to cause such property and assets to be
made subject to the Lien of the Security Documents in the manner and to the extent
required in this Indenture.


 


The preceding clause (iii) will
not prohibit:


 


(a)                                  a merger
between the Issuer and a Restricted Subsidiary that is a wholly owned
Subsidiary of the Issuer; or


 


(b)                                 a merger between
the Issuer and an Affiliate incorporated solely for the purpose of converting
the Issuer into a corporation organized under the laws of the United States or
any political subdivision or state thereof;


 


so long as, in each case,
the amount of Debt of the Issuer and its Restricted Subsidiaries is not increased
thereby.


 


For all purposes of this Indenture and the Notes,
Subsidiaries of any Surviving Entity will, upon such transaction or series of
transactions, become Restricted Subsidiaries or Unrestricted Subsidiaries as
provided pursuant to this Indenture and all Debt, and all Liens on property or
assets, of the Surviving Entity and its Subsidiaries that was not Debt, or were
not Liens on property or assets, of the Issuer and its Subsidiaries immediately
prior to such transaction or series of transactions shall be deemed to have
been Incurred upon such transaction or series of transactions.


 


Upon any transaction or series of transactions that
are of the type described in, and are effected in accordance with, conditions
described in the immediately preceding paragraphs, the Surviving Entity shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer, under this Indenture with the same effect as if such Surviving
Entity had been named as the Issuer herein; and when a Surviving Entity duly
assumes all of the obligations and covenants of the Issuer pursuant to this
Indenture and the Notes, except in the case of a lease, the predecessor Person
shall be relieved of all such obligations.


 


SECTION 5.2                                             Successor
Person Substituted.


 


Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or other disposition of all or
substantially all of the assets of the Issuer in accordance with Section 5.1
hereof,


 


62

















 


the successor corporation
formed by such consolidation or into or with which the Issuer (and, if necessary,
any co-issuer) is merged or to which such sale, assignment, conveyance,
transfer, lease or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the “Issuer” shall refer instead to the successor corporation and
not to the Issuer), and shall exercise every right and power of, the Issuer
under this Indenture with the same effect as if such successor Person had been
named as the Issuer herein; provided, however, that in the event of a transfer or lease, the predecessor
shall not be released from the payment of principal and interest or other
obligations on the Notes.


 


ARTICLE VI


 


DEFAULTS AND REMEDIES


 


SECTION 6.1                                             Events of
Default.


 


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


 


(1)                                   default in the
payment in respect of the principal of (or premium, if any, on) any Note when
due and payable (whether at Stated Maturity or upon repurchase, acceleration, optional
redemption or otherwise);


 


(2)                                   default in the
payment of any interest upon any Note when it becomes due and payable, and
continuance of such default for a period of 30 days;


 


(3)                                   failure to
perform or comply with Section 5.1;


 


(4)                                   except as
permitted by this Indenture, any Note Guarantee of any Significant Subsidiary
(or any group of Restricted Subsidiaries that, taken together, would constitute
a Significant Subsidiary) shall for any reason cease to be, or it shall be
asserted by any Guarantor or the Issuer not to be, in full force and effect and
enforceable in accordance with its terms;


 


(5)                                   default in the
performance, or breach, of any covenant or agreement of the Issuer or any
Guarantor in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is specifically dealt with in clauses (1),
(2), (3) or (4) above), and continuance of such default or breach for
a period of 60 days (or 120 days in relation to Section 4.3) after written
notice thereof has been given to the Issuer by the Trustee or to the Issuer and
the Trustee by the Holders of at least 25% in aggregate principal amount of the
outstanding Notes;


 


(6)                                   a default or
defaults under any bonds, debentures, notes or other evidences of Debt (other
than the Notes) by the Issuer or any Restricted Subsidiary having, individually
or in the aggregate, a principal or similar amount outstanding of at least
$25.0 million, whether such Debt now exists or shall hereafter be created,
which default or defaults shall have resulted in the acceleration of the
maturity of such Debt prior to its express maturity or shall constitute a
failure to pay  at least $25.0 million of such
Debt when due and payable after the expiration of any applicable grace period
with respect thereto;


 


(7)                                   the entry
against the Issuer or any Restricted Subsidiary that is a Significant Subsidiary
(or any group of Restricted Subsidiaries that, taken together, would constitute
a Significant Subsidiary) of a final judgment or final judgments for the
payment of money in an aggregate amount in excess of  $25.0
million (net of amounts covered by insurance), by a court or courts of


 


63
















 


competent
jurisdiction, which judgments remain undischarged, unwaived, unstayed, unbonded
or unsatisfied for a period of 60 consecutive days;


 


(8)                                   (i)           the
Issuer, any Restricted Subsidiary that is a Significant Subsidiary or any group
of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy
Law:


 


(a)                                     commences a voluntary case,


 


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


 


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


 


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


 


(e)                                     admits in writing its
inability to pay its debts generally as they become due;


 


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


 


(a)                                     is for relief against the
Issuer or any Restricted Subsidiary that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, in an involuntary case;


 


(b)                                    appoints a Custodian of the
Issuer or any Restricted Subsidiary that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary or for all or substantially all of the property of the Issuer or any
of its Restricted Subsidiaries; or


 


(c)                                     orders the liquidation of
the Issuer or any Restricted Subsidiary that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary and the order or decree remains unstayed and in effect
for 60 consecutive days; or


 


(9)                                   unless all of
the Collateral has been released from the Note Liens in accordance with the
provisions of the Security Documents, default by the Issuer or any Subsidiary
in the performance of the Security Documents which adversely affects the
enforceability, validity, perfection or priority of the Note Liens on a
material portion of the Collateral granted to the Collateral Agent for the
benefit of the Trustee and the Holders, the repudiation or disaffirmation by
the Issuer or any Subsidiary of its material obligations under the Security
Documents or the determination in a judicial proceeding that the Security
Documents are unenforceable or invalid against the Issuer or any Subsidiary
party thereto for any reason with respect to a material portion of the Collateral
(which default, repudiation, disaffirmation or determination is not rescinded,
stayed, or waived by the Persons having such authority pursuant to the Security
Documents or otherwise cured within 60 days after the Issuer receives written
notice thereof specifying such occurrence from the Trustee or the Holders of at
least 25% of the outstanding principal amount of the Note Obligations and
demanding that such default be remedied).


 


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


 


SECTION 6.2                                             Acceleration.


 


If an Event of Default (other than an Event of
Default specified in clause (8) of Section 6.1 with respect to the
Issuer) occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
outstanding Notes may declare the principal of the Notes and any accrued
interest on the Notes to be due and payable immediately by a notice in writing
to the Issuer (and to the Trustee if given by Holders); 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, under certain circumstances, rescind and annul such acceleration if all
Events of Default, other than the nonpayment of accelerated principal of or
interest on the Notes, have been cured or waived as provided in this Indenture.


 


In the event of a declaration of acceleration of the
Notes solely because an Event of Default described in clause (6) of Section 6.1
has occurred and is continuing, the declaration of acceleration of the Notes
shall be automatically rescinded and annulled if the event of default or
payment default triggering such Event of Default pursuant to clause (6) of
Section 6.1 shall be remedied or cured by the Issuer or a Restricted Subsidiary
of the Issuer or waived by the holders of the relevant Debt within 20 Business
Days after the declaration of acceleration with respect thereto and if the
rescission and annulment of the acceleration of the Notes would not conflict
with any judgment or decree of a court of competent jurisdiction obtained by
the Trustee for the payment of amounts due on the Notes.


 


If an Event of Default specified in clause (8) of
Section 6.1 occurs with respect to the Issuer, the principal of and any
accrued interest on the Notes then outstanding shall ipso facto become immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder.  The Trustee may withhold
from Holders notice of any Default (except Default in payment of principal of,
premium, if any, and interest) if the Trustee determines that withholding
notice is in the interests of the Holders to do so.


 


No Holder will have any right to institute any
proceeding with respect to this Indenture or for any remedy hereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default and unless the Holders of at least 25% in aggregate
principal amount of the outstanding Notes shall have made written request to
the Trustee, and offered indemnity reasonably satisfactory to the Trustee, to
institute such proceeding as Trustee, and the Trustee shall not have received
from the Holders of a majority in aggregate principal amount of the outstanding
Notes a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. 
Such limitations do not apply, however, to a suit instituted by a Holder
directly (as opposed to through the Trustee) for enforcement of payment of the
principal of (and premium, if any) or interest on any Note on or after the
respective due dates expressed in such Note.


 


In the case of any Event of Default occurring by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Issuer with the intention of avoiding payment of the premium that the
Issuer would have had to pay if the Issuer then had elected to redeem the Notes
pursuant to Section 3.7, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law upon the
acceleration of the Notes.


 


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SECTION 6.3                                             Other Remedies.


 


If an Event of Default occurs and is continuing, the
Trustee may (i) pursue any available remedy to collect the payment of
principal, premium, if any, interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture and (ii) instruct the
Collateral Agent to exercise any available remedies under the Security
Documents.


 


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. 
All remedies are cumulative to the extent permitted by law.


 


Pursuant to Section 4.4, the Issuer is required
to deliver to the Trustee annually a statement regarding compliance with this
Indenture, and the Issuer is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.


 


SECTION 6.4                                             Waiver of Past
Defaults.


 


The Holders of a majority in aggregate principal
amount of the Notes then outstanding by written notice to the Trustee may on
behalf of all of the Holders waive any existing Default or Event of Default and
its consequences under this Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Notes (other than as a
result of an acceleration), which shall require the written consent of all of
the Holders.


 


SECTION 6.5                                             Control by
Majority.


 


Subject to the terms of the Security Documents in
the case of the enforcement against the Collateral, the Holders of a majority
in aggregate principal amount of the then outstanding Notes may direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Trustee and Collateral Agent or exercising any trust power
conferred on it.  However, (i) the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of other Holders or that may involve the Trustee in personal liability, and (ii) the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.  In
case an Event of Default shall occur (which shall not be cured), the Trustee
will be required, in the exercise of its power, to use the degree of care of a
prudent man in the conduct of his own affairs. 
Notwithstanding any provision to the contrary in this Indenture, the
Trustee is under no obligation to exercise any of its rights or powers under
this Indenture at the request of any Holder, unless such Holder shall offer to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.


 


SECTION 6.6                                             Limitation on
Suits.


 


A Holder may pursue a remedy with respect to this
Indenture, or the Notes or the Security Documents only if:


 


(a)                                   the Holder
gives to the Trustee written notice of a continuing Event of Default or the
Trustee receives such notice from the Issuer;


 


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


 


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


 


(d)                                  the Trustee
does not comply with the request within 60 days after receipt of the request
and the offer and, if requested, the provision of such indemnity or security;
and


 


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


 


A Holder may not use this Indenture to prejudice the
rights of another Holder or to obtain a preference or priority over another
Holder.


 


SECTION 6.7                                             Rights of
Holders to Receive Payment.


 


Notwithstanding any other provision of this
Indenture, the right of any Holder to receive payment of principal, premium, if
any, and interest on or after the respective due dates expressed in the Note
(including in connection with an Offer to Purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.


 


SECTION 6.8                                             Collection Suit
by Trustee.


 


If an Event of Default specified in Section 6.1(1) or
(2) hereof occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against the Issuer
for the whole amount of principal of, premium and interest remaining unpaid on
the Notes and interest on overdue principal and, to the extent lawful, interest
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.


 


SECTION 6.9                                             Trustee May File
Proofs of Claim.


 


The Trustee is authorized to 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), its creditors or its property
and shall be entitled and empowered to collect, receive and distribute any money
or other securities or property payable or deliverable upon the conversion or
exchange of the Notes or on any such claims 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 7.7 hereof.  To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.7 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive


 


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


 


SECTION 6.10                                       Priorities.


 


Subject to the terms of the Security Documents with
respect to any proceeds of Collateral, any money collected by the Trustee or
the Collateral Agent pursuant to this Article VI and any money or
other property distributable in respect of the Issuer’s obligations under this
Indenture after an Event of Default shall be applied in the following order, at
the date or dates fixed by the Trustee or the Collateral Agent and, in case of
the distribution of such money on account of principal (or premium, if any) or
interest, if any, upon presentation of the Notes and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:


 


First:  to the Trustee and the Collateral Agent
(including any predecessor Trustee or Collateral Agent), its agents and
attorneys for amounts due under Section 7.7 hereof, including payment of
all reasonable compensation, expense and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;


 


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


 


Third:  without duplication, to the Holders for any
other Obligations owing to the Holders under this Indenture and the Notes; and


 


Fourth:  to the Issuer or to such party as a court of
competent jurisdiction shall direct.


 


The Trustee 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 a 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 6.7
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.


 


SECTION 6.12                                       Appointment and
Authorization of the Collateral Agent.


 


(a)                                  Wilmington
Trust Company is hereby designated and appointed as the Collateral Agent of the
Holders under the Security Documents, and is authorized as the Collateral Agent
for such Holders to execute and enter into each of the Security Documents and
all other instruments relating to the Security Documents and (i) to take
action and exercise such powers as are expressly required or permitted
hereunder and under the Security Documents and all instruments relating hereto
and thereto and (ii) to exercise such powers and perform such duties as
are, in each case, expressly delegated to the Collateral 


 


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Agent by the terms hereof and thereof
together with such other powers as are reasonably incidental hereto and
thereto.  In furtherance of the
foregoing, (i) pursuant to the Authorization Letter, the Initial Purchasers,
in their capacity as the initial holders of the Notes, authorized the
Collateral Agent to act as their agent and serve as “mandatario con
rappresentanza” pursuant to articles 1703 and 1704 of the Italian Civil Code
under and in connection with the Italian Pledge Agreement in order to execute,
perfect and hold (including by exercising all rights, remedies and/or powers of
such Initial Purchasers as holders of the Notes under the Italian Pledge
Agreement) the security interests granted by Kemet Electronics Corporation
pursuant to the Italian Pledge Agreement to secure the Secured Claims (as
defined in the Italian Pledge Agreement) and (ii) each subsequent holder
of the Notes shall be deemed to have confirmed and ratified the aforesaid constitution
of the Collateral Agent.


 


(b)                                 Notwithstanding
any provision to the contrary elsewhere in this Indenture or the Security
Documents, the Collateral Agent shall not have any duties or responsibilities
except those expressly set forth herein or therein or any fiduciary
relationship with any Holder, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Indenture or any Security Document or otherwise exist against the Collateral
Agent.


 


(c)                                  The Collateral
Agent 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 or under the Security Documents in good faith and in accordance
with the advice or opinion of such counsel.


 


ARTICLE VII


 


TRUSTEE


 


SECTION 7.1                                             Duties of
Trustee.


 


(a)                                  If an Event of
Default has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture and the Security Documents,
and use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.


 


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


 


(i)                                     the duties of
the Trustee shall be determined solely by the express provisions of this
Indenture, the Security Documents and the TIA 
and the Trustee need perform only those duties that are specifically set
forth in this Indenture, the Security Documents or the TIA and no others, and
no implied covenants or obligations shall be read into this Indenture or the
Security Documents against the Trustee; and


 


(ii)                                  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 or the Security Documents.  However, the Trustee shall be under a duty to
examine the certificates and opinions specifically required to be furnished to
it to determine whether or not they conform on their face to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts or conclusions stated therein).


 


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


 


(i)                                     this paragraph
does not limit the effect of paragraphs (b) or (e) of this Section 7.1;


 


(ii)                                  the Trustee
shall not be liable for any error of judgment made in good faith by an officer
of the Trustee, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and


 


(iii)                               the Trustee
shall not be liable with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it pursuant to Section 6.5
hereof or otherwise in accordance with the direction of the Holders of a
majority in principal amount of outstanding Notes relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this Indenture.


 


(d)                                 Whether or not
therein expressly so provided, every provision of this Indenture or any
provision of any Security Document that in any way relates to the Trustee is
subject to this Section 7.1 and Section 7.2.


 


(e)                                  No provision of
this Indenture shall require the Trustee to expend or risk its own funds or
incur any liability.  The Trustee shall
be under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.


 


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


 


SECTION 7.2                                             Rights of
Trustee.


 


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


 


(b)                                 Before the
Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel or both.  The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers’ Certificate or Opinion of Counsel.  The Trustee may consult with counsel of the
Trustee’s own choosing and the Trustee shall be fully protected from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance on the advice or opinion of such counsel or on any
Opinion of Counsel.


 


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


 


(d)                                 The Trustee
shall not be liable for any action it takes or omits to take in good faith that
it believes to be authorized or within the rights or powers conferred upon it
by this Indenture.  Any request or
direction of the Issuer mentioned herein shall be sufficiently evidenced by an
Officers’ Certificate and any resolution of the Board of Directors of the
Issuer may be sufficiently evidenced by a


 


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Board Resolution.  Whenever in the administration of this
Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, conclusively rely upon an Officers’
Certificate.


 


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


 


(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 unless
such Holders shall have offered to the Trustee reasonable security and
indemnity reasonably satisfactory to the Trustee against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.


 


(g)                                 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 documents, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine during normal business hours
the books, records and premises of the Issuer or any Guarantor, 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.


 


(h)                                 The rights,
privileges, protections and benefits given to the Trustee, including, without
limitation, its rights to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and to each
agent, custodian and other Persons employed to act hereunder or under any
Security Document (including, without limitation, the Collateral Agent).


 


(i)                                     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.


 


(j)                                     The permissive
right of the Trustee to take or refrain from taking any actions enumerated
herein or in any Security Documents shall not be construed as a duty.


 


SECTION 7.3                                             Individual
Rights of Trustee.


 


The Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the Issuer
or any Affiliate of the Issuer with the same rights it would have if it were
not Trustee.  However, in the event that
the Trustee acquires any conflicting interest as defined in Section 310(b) of
the TIA, it must eliminate such conflict within 90 days, apply to the Commission
for permission to continue as Trustee or resign.  Any Agent may do the same with like rights
and duties.  The Trustee is also subject
to Sections 7.10 and 7.11 hereof.


 


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SECTION 7.4                                             Trustee’s
Disclaimer.


 


The Trustee shall not be responsible for and makes
no representation as to the validity or adequacy of this Indenture or the
Notes, or the existence, genuineness, value or protection of any Collateral
(except for the safe custody of Collateral in its possession and the accounting
for Trust Monies actually received by it in accordance with the terms hereof)
for the legality, effectiveness or sufficiency of any Security Document, or for
the creation, perfection, priority, sufficiency or protection of any Note Lien,
and it shall not be accountable for the Issuer’s use of the proceeds from the
Notes or any money paid to the Issuer or upon the Issuer’s direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes, any statement or recital in any document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication on the Notes.


 


SECTION 7.5                                             Notice of
Defaults.


 


If a Default occurs and is continuing and if it is
actually known to a Responsible Officer of the Trustee, the Trustee shall send
electronically or mail to Holders a notice of the Default within 90 days after
it occurs.  Except in the case of a
Default in payment of principal of, premium, if any, or interest on any Note,
the Trustee may withhold the notice if and so long as the Trustee in good faith
determines that withholding the notice is in the interests of the Holders.


 


SECTION 7.6                                             Reports by
Trustee to Holders.


 


Within 60 days after each January 1 beginning
with January 1, 2011, and for so long as Notes remain outstanding, the
Trustee shall send to the Holders a brief report dated as of such reporting
date that complies with TIA § 313(a) (but if no event described in TIA §
313(a) has occurred within the twelve months preceding the reporting date,
no report need be transmitted).  The
Trustee also shall comply with TIA § 313(b). 
The Trustee shall also transmit by mail all reports as required by TIA §
313(c).


 


A copy of each report at the time of its delivery to
the Holders shall be mailed or delivered to the Issuer and filed with the
Commission and each stock exchange on which the Issuer has informed the Trustee
in writing the Notes are listed in accordance with TIA § 313(d).  The Issuer shall promptly notify the Trustee
when the Notes are listed on any stock exchange and of any delisting thereof.


 


SECTION 7.7                                             Compensation
and Indemnity.


 


The Issuer shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder in
accordance with a separate fee agreement. 
The Issuer shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. 
Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee’s agents and counsel.


 


The Issuer and the Guarantors, jointly and
severally, shall indemnify the Trustee (which for purposes of this Section 7.7
shall include its officers, directors, employees and agents) from and against
any and all claims, damages, losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Issuer (including this Section 7.7) and defending
itself against any claim (whether asserted by the Issuer or any Holder or any
other Person) or liability in connection with the exercise or performance of
any of its powers or duties hereunder except to the extent any such loss,
claim, damage, liability or expense may be attributable to its negligence, bad
faith or willful


 


72

















 


misconduct.  The Trustee shall notify the Issuer promptly
of any claim for which it may seek indemnity. 
Failure by the Trustee to so notify the Issuer shall not relieve the
Issuer of its obligations hereunder.  The
Issuer shall defend the claim and the Trustee shall cooperate in the defense.  The Trustee may have separate counsel.  The Issuer need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.


 


The Issuer shall within 10 days after written demand
therefor, pay to the Trustee (or the Trustee may charge to the Issuer) all of
the reasonable out-of-pocket fees, costs and expenses (including the reasonable
out-of-pocket fees and expenses of the Trustee’s counsel) which the Trustee may
incur in connection with (i) the administration of this Indenture, (ii) the
exercise or enforcement of any of the rights of the Trustee hereunder or (iii) the
failure by the Issuer to perform or observe any of the provisions hereof.  The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust.


 


The obligations of the Issuer and the Guarantors
under this Section 7.7 shall survive the satisfaction and discharge or
termination for any reason of this Indenture or the resignation or removal of
the Trustee.


 


To secure the Issuer’s and the Guarantors’
obligations in this Section 7.7, the Trustee shall have a Lien prior to
the Notes on all money or property held or collected by the Trustee, except
that held in trust to pay principal or interest, if any, on particular Notes.  Such Lien shall survive the satisfaction and
discharge or termination for any reason of this Indenture and the resignation
or removal of the Trustee.


 


In addition, and without prejudice to the rights
provided to the Trustee under any of the provisions of this Indenture, when the
Trustee incurs expenses or renders services after an Event of Default specified
in Section 6.1(8) hereof occurs, the expenses and the compensation
for the services (including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any Bankruptcy Law.


 


“Trustee” for
the purposes of this Section 7.7 shall include any predecessor Trustee and
the Trustee in each of its capacities hereunder and each agent, custodian and
other person employed to act hereunder or under any Security Document; provided, however, that
the negligence, willful misconduct or bad faith of any Trustee hereunder shall
not affect the rights of any other Trustee hereunder.


 


The Trustee shall comply with the provisions of TIA
§ 313(b)(2) to the extent applicable.


 


SECTION 7.8                                             Replacement of
Trustee.


 


A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 7.8.


 


The Trustee may resign at any time and be discharged
from the trust hereby created by so notifying the Issuer in writing.  The Holders of a majority in principal amount
of the then outstanding Notes may remove the Trustee by so notifying the
Trustee and the Issuer in writing.  The
Issuer may remove the Trustee if:


 


(a)                                   the Trustee
fails to comply with Section 7.10 hereof;


 


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(b)           the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;


 


(c)            a Custodian or public officer takes charge of the Trustee
or its property; or


 


(d)           the Trustee becomes incapable of acting.


 


If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Issuer shall notify each
Holder of such event and shall promptly appoint a successor Trustee.  Within one year after the successor Trustee
takes office, the Holders of a majority in principal amount of all outstanding
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.  Promptly after that, the retiring Trustee
shall transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided in Section 7.7 hereof, the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this
Indenture.  A successor Trustee shall
deliver 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 aggregate principal amount of all
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.


 


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


 


Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Issuer’s obligations under Section 7.7
hereof shall continue for the benefit of the retiring Trustee.


 


SECTION 7.9                                             Successor
Trustee by Merger, Etc.


 


If the Trustee or any Agent consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another Person, the successor Person without any further act shall
be the successor Trustee or any Agent, as applicable.


 


SECTION 7.10                                       Eligibility;
Disqualification.


 


There shall at all times be a Trustee hereunder that
is a corporation organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under such laws to
exercise corporate trustee power and that is subject to supervision or examination
by federal or state authorities.  The
Trustee together with its affiliates shall at all times have a combined capital
surplus of at least $50.0 million as set forth in its most recent annual report
of condition.


 


This Indenture shall always have a Trustee who
satisfies the requirements of TIA §§ 310(a)(l), (2) and (5).  The Trustee is subject to TIA § 310(b) including
the provision in § 310(b)(1); provided that
there shall be excluded from the operation of TIA § 310(b)(1) any indenture
or indentures under which other securities, or certificates of interest or
participation in other securities, of the Issuer or the Guarantors are
outstanding if the requirements for exclusion set forth in TIA § 310(b)(1) are
met.


 


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SECTION 7.11                                       Preferential
Collection of Claims Against the Issuer.


 


The Trustee is subject to TIA § 311(a), excluding
any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed
shall be subject to TIA § 311(a) to the extent indicated therein.


 


SECTION 7.12                                       Trustee’s
Application for Instructions from the Issuer.


 


Any application by the Trustee for written
instructions from the Issuer may, at the option of the Trustee, set forth in
writing any action proposed to be taken or omitted by the Trustee under this
Indenture and the date on and/or after which such action shall be taken or such
omission shall be effective.  The Trustee
shall not be liable for any action taken by, or omission of, the Trustee in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than twenty
Business Days after the date any officer of the Issuer actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.


 


SECTION 7.13                                       Limitation of
Liability.


 


In no event shall the Trustee, in its capacity as
such or as Collateral Agent, Paying Agent or Registrar or in any other capacity
hereunder, be liable under or in connection with this Indenture for indirect,
special, incidental, punitive or consequential losses or damages of any kind
whatsoever, including but not limited to lost profits, whether or not foreseeable,
even if the Trustee has been advised of the possibility thereof and regardless
of the form of action in which such damages are sought.  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.  The provisions of this Section shall
survive satisfaction and discharge or the termination for any reason of this
Indenture and the resignation or removal of the Trustee.


 


SECTION 7.14                                       Collateral
Agent.


 


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 Collateral Agent
as if the Collateral Agent were named as the Trustee herein and the Security
Documents were named as this Indenture herein.


 


SECTION 7.15                                       Co-Trustees;
Separate Trustee; Collateral Agent.


 


At any time or times, the Issuer, the Collateral
Agent and the Trustee shall have power to appoint, and, upon the written
request of (i) the Trustee or the Collateral Agent or (ii) the
Holders of at least 25% of the outstanding principal amount at maturity of the
Notes, the Issuer shall for such purpose join with the Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Trustee either to act
as co-trustee, jointly with the Trustee, or to act as separate trustee,
co-collateral agent, sub-collateral agent or separate collateral agent of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section 7.15.  If the Issuer 


 


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does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Event of Default has occurred and is continuing, the Trustee or the
Collateral Agent alone shall have power to make such appointment.


 


Should any written instrument from the Issuer be
requested by any co-trustee or separate trustee or co-collateral agent,
sub-collateral agent or separate collateral agent so appointed for more fully
confirming to such co-trustee or separate trustee such property, title, right
or power, any and all such instruments shall, on request of such co-trustee or
separate trustee or separate collateral agent, be executed, acknowledged and
delivered by the Issuer.


 


Any co-trustee, separate trustee or co-collateral
agent, sub-collateral agent or separate collateral agent shall agree in writing
to be and shall be subject to the provisions of the applicable Security Documents
as if it were the Trustee thereunder (and the Trustee shall continue to be so
subject).


 


Every co-trustee or separate trustee or
co-collateral agent, sub-collateral agent or separate collateral agent shall,
to the extent permitted by law, but to such extent only, be appointed subject
to the following terms, namely:


 


(a)            The Notes shall be authenticated and delivered, and all
rights, powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised solely, by
the Trustee.


 


(b)           The rights, powers, duties and obligations hereby conferred
or imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by
the Trustee or by the Trustee and such co-trustee or separate trustee jointly,
or by the Trustee and such co-collateral agent, sub-collateral agent or
separate collateral agent jointly as shall be provided in the instrument
appointing such co-trustee, separate trustee or separate collateral agent,
except to the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee, separate
trustee or co-collateral agent, sub-collateral agent or separate collateral
agent.


 


(c)            The Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by a Board
Resolution, may accept the resignation of or remove any co-trustee, separate
trustee or co-collateral agent, sub-collateral agent or separate collateral
agent appointed under this Section 7.15, and, in case an Event of Default
has occurred and is continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee, separate trustee or
co-collateral agent, sub-collateral agent or separate collateral agent without
the concurrence of the Issuer.  Upon the
written request of the Trustee, the Issuer shall join with the Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to effectuate such resignation or removal.  A successor to any co-trustee, separate trustee
or co-collateral agent, sub-collateral agent or separate collateral agent so resigned
or removed may be appointed in the manner provided in this Section 7.15.


 


(d)           No co-trustee, separate trustee or co-collateral agent,
sub-collateral agent or separate collateral agent hereunder shall be liable by
reason of any act or omission of the Trustee, or any other such trustee,
co-trustee, separate trustee, co-collateral agent, sub-collateral agent or separate
collateral agent hereunder.


 


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(e)            The Trustee shall not be liable by reason of any act or
omission of any co-trustee, separate trustee, co-collateral agent,
sub-collateral agent or separate collateral agent.


 


(f)            Any act of Holders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee, separate trustee or
co-collateral agent, sub-collateral agent or separate collateral agent, as the
case may be.


 


ARTICLE
VIII


 


LEGAL
DEFEASANCE AND COVENANT DEFEASANCE


 


SECTION 8.1                                             Option to
Effect Legal Defeasance or Covenant Defeasance.


 


The Issuer may, at the option of its Board of
Directors evidenced by a Board Resolution set forth in an Officers’
Certificate, at any time, elect to have either Section 8.2 or 8.3 hereof
applied to all outstanding Notes upon compliance with the conditions set forth
below in this Article VIII.


 


SECTION 8.2                                             Defeasance and
Discharge.


 


Upon the Issuer’s exercise under Section 8.1
hereof of the option applicable to this Section 8.2, the Issuer shall,
subject to the satisfaction of the conditions set forth in Section 8.4
hereof, be deemed to have been discharged from its obligations with respect to
all outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, “legal defeasance”).  For this purpose, legal defeasance means that
the Issuer and the Guarantors 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 8.5 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all of its
other obligations under such Notes, Note Guarantees and this Indenture (and the
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder:  (a) the rights of Holders of outstanding
Notes to receive payments in respect of the principal of, premium, if any, and
interest, if any, on such Notes when such payments are due from the trust
referred to in Section 8.4(l); (b) the Issuer’s obligations with
respect to such Notes under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.10 and 4.2
hereof; (c) the rights, powers, trusts, benefits and immunities of the
Trustee, including without limitation thereunder, under Section 7.7, 8.5
and 8.7 hereof and the Issuer’s obligations in connection therewith; (d) the
Issuer’s rights pursuant to Section 3.7; and (e) the provisions of
this Article VIII.  Subject to
compliance with this Article VIII, the Issuer may exercise its option
under this Section 8.2 notwithstanding the prior exercise of its option
under Section 8.3 hereof.


 


The Issuer and the Guarantors may terminate the
obligations under this Indenture and the Security Documents (a “Discharge”) when:


 


(1)           either:  (A) all Notes theretofore authenticated
and delivered have been delivered to the Trustee for cancellation, or (B) all
such Notes not theretofore delivered to the Trustee for cancellation (i) have
become due and payable or (ii) will become due and payable within one year
or are to be called for redemption within one year  under
irrevocable arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Issuer,
and the Issuer has irrevocably deposited or caused to be deposited with the
Trustee funds in an amount sufficient to pay and discharge the entire
indebtedness on the Notes, not theretofore 


 


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delivered
to the Trustee for cancellation, for principal of, premium, if any, and
interest to the Stated Maturity or date of redemption;


 


(2)           the Issuer has paid
or caused to be paid all other sums then due and payable under this Indenture
by the Issuer;


 


(3)           the deposit will not
result in a breach or violation of, or constitute a default under, any other
instrument to which the Issuer or any Guarantor is a party or by which the
Issuer or any Guarantor is bound;


 


(4)           the Issuer has delivered
irrevocable instructions to the Trustee under this Indenture to apply the
deposited money toward the payment of the Notes at maturity or on the redemption
date, as the case may be; and


 


(5)           the Issuer has
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel
reasonably acceptable to the Trustee, each stating that all conditions
precedent under this Indenture relating to the Discharge have been complied
with.


 


SECTION 8.3                                             Covenant
Defeasance.


 


Upon the Issuer’s exercise under Section 8.1
hereof of the option applicable to this Section 8.3, the Issuer shall,
subject to the satisfaction of the conditions set forth in Section 8.4
hereof, be released from its obligations under the covenants contained in
Sections 4.3, 4.4, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 (except
with respect to the corporate existence of the Issuer), 4.16, 4.17, 4.18, 4.19,
4.20, 4.21 and 4.22 hereof and clause (iii) of Section 5.1 hereof
with respect to the outstanding Notes on and after the date the conditions set
forth below are satisfied (hereinafter, “covenant defeasance”),
and the Notes shall thereafter be deemed not “outstanding” for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes).  For this purpose, covenant
defeasance means that, with respect to the outstanding Notes, the Issuer or any
Guarantor, as applicable, may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.1(3) or
6.1(5) hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby.  In addition, upon the Issuer’s exercise under
Section 8.1 hereof of the option applicable to this Section 8.3, subject
to the satisfaction of the conditions set forth in Section 8.4 hereof,
Sections 6.1(4), 6.1(6), 6.1(7) and 6.1(9) hereof shall not
constitute Events of Default.


 


SECTION 8.4                                             Conditions to
Legal Defeasance or Covenant Defeasance.


 


The following shall be the conditions to the
application of either Section 8.2 or 8.3 hereof to the outstanding Notes:


 


In order to exercise either legal defeasance or
covenant defeasance:


 


(1)           the Issuer must
irrevocably have deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to the benefits of the Holders of
such Notes:  (A) money in an amount,
or (B) U.S. government obligations, which through the scheduled payment 


 


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of
principal and interest in respect thereof in accordance with their terms will
provide, not later than the due date of any payment, money in an amount or (C) a
combination thereof, in each case sufficient without reinvestment, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge, and which shall be applied by the Trustee to pay and discharge,
the entire indebtedness in respect of the principal of and premium, if any, and
interest on such Notes on the Stated Maturity thereof or (if the Issuer has
made irrevocable arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name and at the expense of the
Issuer) the redemption date thereof, as the case may be, in accordance with the
terms of this Indenture and such Notes;


 


(2)           in the case of legal
defeasance, the Issuer shall have delivered to the Trustee an Opinion of
Counsel stating 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 United States
federal income tax law, in either case (A) or (B) to the effect that,
and based thereon such opinion shall confirm that, the Holders of such Notes
will not recognize gain or loss for United States federal income tax purposes
as a result of the deposit, legal defeasance and discharge to be effected with
respect to such Notes and will be subject to United States federal income tax
on the same amount, in the same manner and at the same times as would be the
case if such deposit, legal defeasance and discharge were not to occur;


 


(3)           in the case of
covenant defeasance, the Issuer shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Holders of such outstanding Notes will not
recognize gain or loss for United States federal income tax purposes as a
result of the deposit and covenant defeasance to be effected with respect to
such Notes and will be subject to federal income tax on the same amount, in the
same manner and at the same times as would be the case if such deposit and covenant
defeasance were not to occur;


 


(4)           no Default or Event
of Default with respect to the outstanding Notes shall have occurred and be
continuing at the time of such deposit after giving effect thereto (other than
a Default or Event of Default resulting from the borrowing of funds to be
applied to such deposit and the grant of any Lien to secure such borrowing);


 


(5)           such legal
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a default under, any material agreement or material instrument
(other than this Indenture) to which the Issuer is a party or by which the
Issuer is bound; and


 


(6)           the Issuer shall
have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent with respect to such legal
defeasance or covenant defeasance have been complied with.


 


Notwithstanding the foregoing, the Opinion of
Counsel required by clause (2) above with respect to a legal defeasance
need not to be delivered if all Notes not theretofore delivered to the Trustee
for cancellation (x) have become due and payable, or (y) will become
due and payable at Stated Maturity within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Issuer.


 


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SECTION 8.5                                             Deposited Money
and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.


 


Subject to Section 8.6 hereof, all money and
non-callable U.S. government obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.5, the “Trustee”)
pursuant to Section 8.4 hereof in respect of the outstanding Notes shall
be held in trust, shall not be invested, 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 (including the Issuer or
any Subsidiary acting as 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 interest, but such money need not be segregated
from other funds except to the extent required by law.


 


The Issuer shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or
non-callable U.S. government obligations deposited pursuant to Section 8.4
hereof or the principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the Holders of
the outstanding Notes.


 


Anything in this Article VIII to the contrary
notwithstanding, the Trustee shall deliver or pay to the Issuer from time to
time upon the written request of the Issuer and be relieved of all liability
with respect to any money or non-callable U.S. government obligations held by
it as provided in Section 8.4 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(1) hereof), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
legal defeasance or covenant defeasance.


 


SECTION 8.6                                             Repayment to
Issuer.


 


Any money deposited with the Trustee or any Paying
Agent, or then held by the Issuer, in trust for the payment of the principal
of, premium, if any, or interest, if any, on any Note and remaining unclaimed
for one year after such principal and premium, if any, or interest has become
due and payable shall be paid to the Issuer on its written request or (if then
held by the Issuer) shall be discharged from such trust; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Issuer as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Issuer cause to
be published once, in The  New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining shall be repaid to the Issuer.


 


SECTION 8.7                                             Reinstatement.


 


If the Trustee or Paying Agent is unable to apply
any United States dollars or non-callable U.S. government obligations in
accordance with Section 8.2 or 8.3 hereof, as the case may be, by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the obligations of
the Issuer under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.2 or 8.3 hereof
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 8.2 or 8.3 hereof, as the case may be; provided, however, that,
if the Issuer makes any payment of principal of, premium, if any, or interest
on any Note following the reinstatement of its obligations, the 


 


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Issuer shall be subrogated
to the rights of the Holders of such Notes to receive such payment `from the money
held by the Trustee or Paying Agent.


 


ARTICLE
IX


 


AMENDMENT,
SUPPLEMENT AND WAIVER


 


SECTION 9.1                                             Without Consent
of Holders.


 


Notwithstanding Section 9.2 of this Indenture,
without the consent of any Holders, the Issuer, the Guarantors, the Trustee and
the Collateral Agent, as applicable, at any time and from time to time, may
enter into one or more indentures supplemental to, or otherwise amend,
supplement or waive any provisions of, this Indenture, the Notes, the Note
Guarantees and the Security Documents for any of the following purposes:


 


(1)           to evidence the
succession of another Person to the Issuer or a Guarantor and the assumption by
any such successor of the covenants of the Issuer or such Guarantor in this
Indenture, the Notes, the Note Guarantees and the Security Documents, as
applicable;


 


(2)           to add to the
covenants of the Issuer for the benefit of the Holders, or to surrender any
right or power herein conferred upon the Issuer or any Guarantor, or to make
any change that would provide any additional rights or benefits to the Holders;


 


(3)           to secure the Notes
pursuant to the requirements of Section 4.12 or enter into, amend or
supplement, or reflect the terms of, an Intercreditor Agreement;


 


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


 


(5)           to add additional
Events of Default;


 


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


 


(7)           to evidence and
provide for the acceptance of appointment under this Indenture by a successor
Trustee or Collateral Agent;


 


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


 


(9)           to add to the
Collateral securing the Notes,


 


(10)         to add a Guarantor or
to release a Guarantor in accordance with this Indenture;


 


(11)         to cure any
ambiguity, defect, omission, mistake or inconsistency;


 


(12)         to make any other
provisions with respect to matters or questions arising under this Indenture, provided that such actions pursuant to this clause shall not
adversely affect the interests of the Holders in any material respect, as
determined in good faith by the Board of Directors of the Issuer;


 


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(13)         to conform the text
of this Indenture, the Notes or the Note Guarantees to any provision of the “Description
of Notes” in the Offering Memorandum to the extent that the Trustee has
received an Officers’ Certificate stating that such text constitutes an unintended
conflict with the description of the corresponding provision in the “Description
of Notes;”


 


(14)         to mortgage, pledge,
hypothecate or grant any other Lien in favor of the Collateral Agent for the
benefit of the Trustee on behalf of the Holders, as additional security for the
payment and performance of all or any portion of the Note Obligations under
this Indenture and the Notes, in any property or assets, including any which
are required to be mortgaged, pledged or hypothecated, or in which a Lien is
required to be granted to or for the benefit of the Trustee or the Collateral
Agent pursuant to this Indenture, any of the Security Documents or otherwise;
or


 


(15)         to provide for the
release of Collateral from the Lien of this Indenture and the Security
Documents when permitted or required by the Security Documents, or this Indenture.


 


SECTION 9.2                                             With Consent of
Holders.


 


With the consent of the Holders of not less than a
majority in aggregate principal amount of the outstanding Notes, the Issuer,
the Guarantors, the Trustee and the Collateral Agent, as applicable, may enter
into an indenture or indentures supplemental to, or otherwise amend, supplement
or waive, this Indenture, the Notes, the Note Guarantees or the Security
Documents for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture, the Notes, the Note
Guarantees or the Security Documents or of modifying in any manner the rights
of the Holders under this Indenture, the Notes, the Note Guarantees or the
Security Documents, including the definitions herein; provided, however,  that no such
supplemental indenture or other amendment, supplement or waiver shall, without
the consent of the Holder of each outstanding Note affected thereby:


 


(1)           change the Stated
Maturity of any Note or of any installment of interest on any Note, or reduce
the amount payable in respect of the principal thereof or the rate of interest
thereon or any premium payable thereon, or reduce the amount that would be due
and payable on acceleration of the maturity thereof, or change the place of
payment where, or the coin or currency in which, any Note or any premium or
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof, or
change the date on which any Notes may be subject to redemption or reduce the
Redemption Price therefor,


 


(2)           reduce the
percentage in aggregate principal amount of the outstanding Notes, the consent
of whose Holders is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture,


 


(3)           modify the
obligations of the Issuer to make Offers to Purchase upon a Change of Control
Triggering Event or from the Excess Proceeds of Asset Sales if such
modification was done after the occurrence of such Change of Control Triggering
Event or such Asset Sale,


 


(4)           subordinate, in
right of payment, the Notes to any other Debt of the Issuer,


 


(5)           modify any of the
provisions of this paragraph or provisions relating to waiver of defaults or
certain covenants, except to increase any such percentage required for such
actions or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each outstanding Note
affected thereby, or


 


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(6)           release any Note
Guarantees required to be maintained under this Indenture (other than in
accordance with the terms of this Indenture).


 


In addition, any amendment or supplement to, or
waiver of, the provisions of this Indenture or any Security Document that has
the effect of releasing all or substantially all of the Collateral from the
Note Liens will require the consent of the Holders of at least 662/3% in aggregate principal amount of the Notes then outstanding.


 


The Holders of not less than a majority in aggregate
principal amount of the outstanding Notes may on behalf of all Holders waive
any past default under this Indenture and its consequences, except a default:


 


(1)           in
any payment in respect of the principal of (or premium, if any) or interest on
any Notes (including any Note which is required to have been purchased pursuant
to an Offer to Purchase which has been made by the Issuer), or


 


(2)           in
respect of a covenant or provision hereof which under this Indenture cannot be
modified or amended without the consent of the Holder of each outstanding Note
affected.


 


SECTION 9.3                                             Compliance with
TIA.


 


Every amendment or supplement to this Indenture or
the Notes shall be set forth in an amended or supplemental indenture that
complies with the TIA as then in effect.


 


SECTION 9.4                                             Revocation and
Effect of Consents.


 


Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder and every subsequent Holder of that Note or portion of the Note that
evidences the same debt as the consenting Holder’s Note, even if notation of
the consent is not made on the Note. 
However, any such Holder or subsequent Holder may revoke the consent as
to its Note if the Trustee receives written notice of revocation before the
date the waiver, supplement or amendment becomes effective.  When an amendment, supplement or waiver
becomes effective in accordance with its terms, it thereafter binds every
Holder.


 


The Issuer may, but shall not be obligated to, fix a
record date for determining which Holders consent to such amendment, supplement
or waiver.  If the Issuer fixes a record
date, the record date shall be fixed at (i) the later of 30 days prior to
the first solicitation of such consent or the date of the most recent list of
Holders furnished for the Trustee prior to such solicitation pursuant to Section 2.5
hereof or (ii) such other date as the Issuer shall designate.


 


SECTION 9.5                                             Notation on or
Exchange of Notes.


 


The Trustee may place an appropriate notation about
an amendment, supplement or waiver on any Note thereafter authenticated.  The Issuer in exchange for all Notes may
issue and the Trustee shall authenticate new Notes that reflect the amendment,
supplement or waiver.


 


Failure to make the appropriate notation or issue a
new Note shall not affect the validity and effect of such amendment, supplement
or waiver.


 


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After any amendment, supplement or waiver becomes
effective, the Issuer shall mail to Holders a notice briefly describing such
amendment, supplement or waiver.  The
failure to give such notice shall not affect the validity and effect of such
amendment, supplement or waiver.


 


SECTION 9.6                                             Trustee to Sign
Amendments, Etc.


 


The Trustee shall sign any amended or supplemental
indenture authorized pursuant to this Article IX if the amendment
or supplement does not adversely affect the rights, duties, liabilities or immunities
of the Trustee.  The Issuer and the
Guarantors may not sign an amendment or supplemental indenture until their
respective Boards of Directors approve it. 
In signing or refusing to sign any amendment or supplemental indenture
the Trustee shall be entitled to receive and (subject to Section 7.1
hereof) shall be fully protected in relying upon an Officers’ Certificate and
an Opinion of Counsel stating that the execution of such amendment or
supplemental indenture is authorized or permitted by this Indenture, that all
conditions precedent thereto have been met or waived, that such amendment or
supplemental indenture is not inconsistent herewith, and that it will be valid
and binding upon the Issuer in accordance with its terms.


 


ARTICLE
X


 


SECURITY


 


SECTION 10.1                                       Security
Documents; Additional Collateral.


 


(a)                                  Security
Documents.  In order to
secure the due and punctual payment of the Note Obligations, in the case of the
Issuer, and the Note Guarantees in Article XII hereof, in the case of the
Guarantors, when and as the same shall be due and payable, the Issuer, the
Guarantors, the Collateral Agent and/or the other parties thereto have
simultaneously with the execution of this Indenture entered or, in accordance
with the provisions of Section 4.20, Section 4.22, Section 4.23,
this Article X and Article XI and applicable provisions of the
Security Documents will enter into the Pledge Agreement and the Foreign Law
Security Documents or other grants or transfers of security to create the
Security Interests securing such obligations and for other matters.  The Issuer shall, and shall cause each
Restricted Subsidiary to, and each Restricted Subsidiary shall, do all filings
(including filings of continuation statements and amendments to UCC financing
statements that may be necessary to continue the effectiveness of such UCC
financing statements) and execute, acknowledge and deliver to the Collateral
Agent such assignments, transfers, assurances or other instruments and do all
other actions as are necessary or required by, at or prior to the times
required hereby or by the Security Documents, to maintain (at the sole cost and
expense of the Issuer and its Restricted Subsidiaries) the Security Interest
created by the Security Documents in the Collateral (other than with respect to
any Collateral the Security Interest in which is not required to be perfected
under the Security Documents) as a perfected first priority Security Interest
subject only to Permitted Collateral Liens.


 


(b)                                 Additional
Collateral.  Concurrently
with the acquisition, directly or indirectly, by the Issuer or any Guarantor of
any asset or property of the type which constitutes Collateral:


 


(i)                                     the Issuer or
applicable Guarantor, as the case may be, and the Collateral Agent shall enter
into such amendments or supplements to the Security Documents or such
additional Security Documents, and, at or prior to the times required by this
Indenture or the Security Documents, the Issuer shall cause such amendments,
supplements and other Security Documents to be filed and recorded in all such
governmental offices as shall be necessary in order to grant and create a valid
first priority Lien on and security interest in such after-acquired property in
favor of 


 


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the
Collateral Agent (subject to no Liens except Permitted Collateral Liens) and
the Issuer shall complete all other actions necessary to perfect the Collateral
Agent’s Security Interest in such property in accordance with the provisions
hereof and the provisions of the applicable Security Documents; and


 


(ii)               the Issuer or
applicable Guarantor, as the case may be, shall also deliver to the Trustee and
Collateral Agent the following:


 


(A)                              an Opinion of
Counsel required pursuant to Section 10.2 below;


 


(B)                                an Officers’
Certificate of the Issuer stating that any specific Liens on such property are
Permitted Collateral Liens;


 


(C)                                evidence of
payment or a closing statement indicating payments to be made of all filing
fees, recording charges, transfer taxes and other costs and expenses, including
reasonable legal fees and disbursements of counsel for the Trustee and
Collateral Agent (and any local counsel) that may be incurred to validly and
effectively subject such property to the Lien of any applicable Security
Document to perfect such Liens; and


 


(D)                               UCC, judgment,
bankruptcy, tax lien and intellectual property searches confirming that such
property is subject to no Liens other than Permitted Collateral Liens; and


 


(iii)                               the Issuer
shall deliver to the Trustee an Opinion of Counsel and an Officer’s Certificate
to the effect that the documents that have been or are therewith delivered to
the Trustee pursuant to this Section 10.1(b) (including any
amendments, supplements or other Security Documents referred to in paragraph (i) above)
conform to the requirements of this Indenture.


 


SECTION 10.2                                       Recording,
Registration and Opinions.


 


Except to the extent not required at such time by
the provisions of Section 314(b) of the TIA (including by virtue of
any Commission regulation or interpretation (including any no-action letter issued
by the Staff of the Commission, whether issued to the Issuer or any other
Person)), the Issuer and the Guarantors shall furnish to the Trustee at least
thirty (30) days prior to the anniversary of the Issue Date in each year,
beginning with 2011, an Opinion of Counsel, dated as of such date, either (i) (x) stating
that, in the opinion of such counsel, such action has been taken with respect
to the recording, filing, re-recording, and refiling of this Indenture or the
Security Documents, as applicable, as are necessary to maintain the perfected
Note Liens under applicable law other than any action as described therein to
be taken and such opinion may refer to prior Opinions of Counsel, contain
qualifications and exceptions and rely on an Officers’ Certificate of the
Issuer, and (y) stating that on the date of such Opinion of Counsel, all
financing statements, financing statement amendments and continuation
statements have been or will be executed and filed that are necessary, as of
such date or promptly thereafter and during the succeeding 12 months, fully to
maintain the perfection of the security interests of the Collateral Agent
securing Note Obligations with respect to the Collateral and such Opinion of
Counsel may contain qualifications and exceptions and may rely on an Officers’
Certificate; provided that if there is a
required filing of a continuation statement or other instrument within such 12
month period and such continuation statement or amendment is not effective if
filed at the time of the opinion, such opinion may so state and in that case
the Issuer and the Guarantors shall cause a continuation statement or amendment
to be timely filed so as to maintain such Note Liens and security interests
created thereby or (ii) stating that, in the opinion of such counsel, no
such action is necessary to maintain such Note Liens or security interests.


 


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SECTION 10.3                                       Releases of
Collateral.


 


The Note Liens and the Note Guarantees will, upon
compliance with the conditions precedent to the release of the Collateral
together with such documentation, if any, as may be required by the TIA and
this Indenture, automatically and without the need for any further action by
any Person be released so long as such release is otherwise in compliance with
the TIA:


 


(a)                                   in whole or in
part, as applicable, as to all or any portion of property subject to such Liens
which has been taken by eminent domain, condemnation or other similar circumstances;


 


(b)                                  in whole, as to
all property subject to such Liens, upon:


 


(i)                                    payment in full of the
principal of, accrued and unpaid interest and premium on the Notes; or


 


(ii)                                 satisfaction and discharge
of this Indenture under Section 8.2 hereof; or


 


(iii)                              legal defeasance or covenant
defeasance of this Indenture under Article VIII hereof;


 


(c)                                   in part, as to
any property that (a) is sold, transferred or otherwise disposed of by the
Issuer or Restricted Subsidiary in a transaction not prohibited by this
Indenture or the relevant Security Documents, at the time of such sale,
transfer or disposition, to the extent of the interest sold, transferred or
disposed of or (b) is owned or at any time acquired by a Guarantor that
has been released from its Note Guarantee, concurrently with the release of
such Note Guarantee in each case;


 


(d)                                  pursuant to any
amendment to, or waiver of, the provisions of this Indenture or any Security
Document that has the effect of releasing all or substantially all of the
Collateral from Note Liens, with the consent of the Holders of at least 662/3% in aggregate principal amount of the Notes then
outstanding; or


 


(e)                                   in part, in
accordance with the applicable provisions of the Security Documents.


 


If any Collateral is released in accordance with any
of the Security Documents (other than as otherwise permitted by this Indenture)
and if the Issuer or the applicable Guarantor has delivered the certificates
and documents required by the Security Documents, the Trustee will determine
whether it has received all documentation required by Section 314(d) of
the TIA in connection with such release.


 


The Capital Interests of any Subsidiary of the
Issuer will constitute Collateral securing the Notes and the related Note
Guarantees only to the extent that such Capital Interests can secure such Notes
and Note Guarantees without Rule 3-16 of Regulation S-X (or any other
law, rule or regulation) requiring separate financial statements of such
Subsidiary to be filed with the Commission (or any other governmental agency).
In the event that Rule 3-16 of Regulation S-X requires or is amended,
modified or interpreted by the Commission to require (or is replaced with
another rule or regulation, or any other law, rule or regulation is
adopted, which would require) the filing with the Commission (or any other
governmental agency) of separate financial statements of any such Subsidiary
due to the fact that such Subsidiary’s Capital Interests secure the Notes and
the related Note Guarantees, then such Capital Interests shall automatically be
deemed not to be part of the Collateral securing the Notes and Note Guarantees
(but only 


 


86

















 


to the extent necessary to
not be subject to such requirement). In such event, the Security Documents may
be amended or modified, without the consent of any Holder, to the extent
necessary to release the security interests on the Capital Interests that are
so deemed to no longer constitute part of the Collateral.


 


In the event that Rule 3-16 of
Regulation S-X is amended, modified or interpreted by the Commission to
permit (or is replaced with another rule or regulation, or any other law, rule or
regulation is adopted, which would permit) such Subsidiary’s Capital Interests
to secure the Notes and the related Note Guarantees in excess of the amount
then pledged without the filing with the Commission (or any other governmental
agency) of separate financial statements of such Subsidiary, then the Capital
Interests of such Subsidiary shall automatically be deemed to be a part of the
Collateral securing the Notes and Note Guarantees (but only to the extent such
Subsidiary would not be subject to any such financial statement requirement and
in no event in excess of the portion of such Capital Interests then-required to
be pledged as Collateral pursuant to this Indenture and the Security
Documents). In such event, the Security Documents may be amended or modified,
without the consent of any Holder, to the extent necessary to subject to the
Liens under the Security Documents such additional Capital Interests.


 


In the event that the portion of Capital Interests
of any Subsidiary of the Issuer pledged as Collateral at any time exceeds the
portion then-required to be pledged as Collateral pursuant to this Indenture
and the Security Documents, such excess portion of such Capital Interests shall
automatically be deemed not to be part of the Collateral securing the Notes and
Note Guarantees.  In such event, the Security
Documents may be amended or modified, without the consent of any Holder, to the
extent necessary to release the security interests on the Capital Interests
that are so deemed to no longer constitute part of the Collateral.


 


SECTION 10.4                                       Form and
Sufficiency of Release.


 


In the event that either Issuer or any Guarantor has
sold, exchanged, or otherwise disposed of or proposes to sell, exchange or
otherwise dispose of any portion of the Collateral that, under the terms of
this Indenture may be sold, exchanged or otherwise disposed of by the Issuer or
any Guarantor, or in the event that any Security Document calls for any release
of any Collateral (including, without limitation, any automatic release) and
the Issuer or such Guarantor requests the Collateral Agent to release any
Collateral or furnish a written disclaimer, release or quitclaim of any
interest in such property under this Indenture, the applicable Note Guarantee
and the Security Documents, upon receipt of an Officers’ Certificate and
Opinion of Counsel to the effect that such release complies with Section 10.3
and specifying the provision in Section 10.3 pursuant to which such
release is being made (upon which the Collateral Agent may conclusively and
exclusively rely) the Collateral Agent shall release and deliver such released
Collateral and execute, acknowledge and deliver to the Issuer or such Guarantor
such an instrument in the form provided by the Issuer, and providing for
release without recourse, promptly after satisfaction of the conditions set forth
herein for delivery of such release and shall take such other action as the
Issuer or such Guarantor may reasonably request and as necessary to effect such
release.  Before so releasing and
delivering such Collateral or executing, acknowledging or delivering any such
instrument, the Collateral Agent shall be furnished with an Officer’s
Certificate and an Opinion of Counsel (on which the Collateral Agent shall be
entitled to conclusively and exclusively rely) each stating that such release
is authorized and permitted by the terms hereof and the Security Documents and
that all conditions precedent with respect to such release have been complied
with.  Notwithstanding the preceding
sentence, all purchasers and grantees of any property or rights purporting to
be released shall be entitled to rely upon any release executed by the
Collateral Agent hereunder as sufficient for the purpose of this Indenture and
as constituting a good and valid release of the property therein described from
the Lien of this Indenture and the Security Documents.


 


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SECTION 10.5                                       Possession and
Use of Collateral.


 


Subject to and in accordance with the provisions of
this Indenture and the Security Documents, so long as the Trustee has not
exercised rights or remedies with respect to the Collateral in connection with
an Event of Default that has occurred and is continuing, the Issuer and the
Guarantors shall have the right to remain in possession and retain exclusive
control of and to exercise all rights with respect to the Collateral (other
than (i) Trust Monies held by the Trustee, (ii) other monies or
Eligible Cash Equivalents deposited pursuant to Article VIII, (iii) Collateral
comprised of certificated Capital Interests and (iv) other than as set
forth in the Security Documents or this Indenture), to alter any Collateral so
long as such alterations do not in any material respect impair the Lien of the
Security Documents thereon, do not otherwise allow any Liens thereon other than
Permitted Collateral Liens and otherwise comply with Section 10.7 hereof,
and to collect, receive, use, invest and dispose of the reversions, remainders,
interest, rents, lease payments, issues, profits, revenues, proceeds and other
income thereof.


 


SECTION 10.6                                       Specified
Releases of Collateral.


 


(a)                                  Satisfaction
and Discharge; Defeasance.  The
Issuer and the Guarantors shall be entitled to obtain a full release of all of
the Collateral from the Liens of this Indenture and of the Security Documents
upon payment in full of all principal, premium, if any, interest and Additional
Interest, if any, on the Notes and of all Obligations for the payment of money
due and owing to the Trustee or the Holders, or upon compliance with the
conditions precedent set forth in Article VIII for legal defeasance or covenant
defeasance.  Upon delivery by the Issuer
to the Trustee of an Officers’ Certificate and an Opinion of Counsel, each to
the effect that such conditions precedent have been complied with (and which
may be the same Officers’ Certificate and Opinion of Counsel required by Article VIII),
together with such documentation, if any, as may be required by the Trustee or
the TIA (including, without limitation, TIA § 314(d)) prior to the release of
such Collateral, the Trustee shall forthwith take all necessary action (at the
request of and the expense of the Issuer) to release and reconvey to the Issuer
and the applicable Guarantors without recourse all of the Collateral, and shall
deliver such Collateral in its possession to the Issuer and the applicable
Guarantors including, without limitation, the execution and delivery of
releases and satisfactions wherever required.


 


(b)                                 Dispositions of
Collateral in Connection with Asset Sales.  The Issuer and each of the Guarantors, as the
case may be, shall be entitled to obtain a release of, and the Trustee shall
release, items of Collateral (other than Trust Monies) (the “Released Collateral”) subject to an Asset Sale upon compliance
with the conditions precedent that the Issuer shall have delivered to the
Trustee the following:


 


(i)                                     A notice from
the Issuer requesting release of Released Collateral (a “Issuer Notice”),
such Issuer Notice (A) specifically describing the proposed Released
Collateral, (B) specifying the Fair Market Value of such Released
Collateral on a date within 60 days of the Issuer Notice (the “Valuation Date”), (C) stating that the consideration to
be received is at least equal to the Fair Market Value of the Released
Collateral, (D) stating that the release of such Released Collateral shall
not materially and adversely impair the value of the remaining Collateral,
taken as a whole, or interfere with or impede the Trustee’s ability to realize
the value of the remaining Collateral and shall not impair the maintenance and
operation of the remaining Collateral, (E) confirming the sale of, or an
agreement to sell, such Released Collateral in a bona fide sale to a Person
that is not an Affiliate of the Issuer or, in the event that such sale is to a
Person that is an Affiliate of the Issuer, confirming that such sale is being
made in accordance with Section 4.11, (F) certifying that such Asset
Sale complies with the terms and conditions of this Indenture, including,
without limitation, Section 4.10 hereof and (G) accompanied by a
counterpart of the instruments 


 


88

















 


proposed
to give effect to the release fully executed and acknowledged (if applicable)
by all parties thereto other than the Trustee;


 


(ii)                                  An Officers’
Certificate certifying that (A) such sale covers only the Released
Collateral and complies with the terms and conditions of this Indenture,
including, without limitation, Section 4.10 hereof, (B) all Net Cash
Proceeds from the sale of any of the Released Collateral have been or will be
applied pursuant to Section 4.10, (C) there is not, and shall not be,
a Default or Event of Default in effect or continuing on the date thereof, the
Valuation Date or the date of such Asset Sale, (D) the release of the
Released Collateral shall not result in a Default or Event of Default hereunder
and (E) all conditions precedent in this Indenture and the Security Documents
to such release have been complied with;


 


(iii)                               All
documentation required by the TIA (including, without limitation, TIA §
314(d)), if any, prior to the release of Collateral by the Trustee and all
documents required by Section 10.1 hereof; and


 


(iv)                              An Opinion of
Counsel stating that the documents that have been or are therewith delivered to
the Trustee in connection with such release conform to the requirements of this
Indenture.


 


Upon compliance by the Issuer with the conditions
precedent set forth above, the Trustee shall cause to be released and
reconveyed to the Issuer or the applicable Guarantor the Released Collateral
without recourse by executing a release in the form provided by the Issuer or
the applicable Guarantor and reasonably acceptable to the Trustee.


 


SECTION 10.7                                       Purchaser
Protected.


 


No purchaser or grantee of any property or rights
purporting to be released 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.


 


SECTION 10.8                                       Authorization
of Actions to Be Taken by the Collateral Agent Under the Security Documents.


 


The Holders agree that the Collateral Agent shall be
entitled to the rights, privileges, protections, immunities, indemnities and
benefits provided to the Collateral Agent by the Security Documents.  Furthermore, each Holder, by accepting such
Note, consents to the terms of and authorizes and directs the Trustee (in each
of its capacities) and the Collateral Agent to enter into and perform the Security
Documents in each of its capacities thereunder.


 


SECTION 10.9                                       Authorization
of Receipt of Funds by the Trustee Under the Pledge Agreement.


 


The Trustee is authorized to receive any funds for
the benefit of holders distributed under the Security Documents to the Trustee,
to apply such funds as provided in this Indenture and to make further
distributions of such funds in accordance with the applicable provisions of Section 6.10.


 


SECTION 10.10                                 Powers
Exercisable by Receiver or Collateral Agent.


 


In case the Collateral shall be in the possession of
a receiver or trustee, lawfully appointed, the powers conferred in this Article X
upon the Issuer or any Guarantor, as applicable, with respect 


 


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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 any Guarantor, as
applicable, or of any officer or officers thereof required by the provisions of
this Article X.


 


ARTICLE
XI


 


APPLICATION
OF TRUST MONIES


 


SECTION 11.1                                       Collateral
Account.


 


On the Issue Date there shall be established and, at
all times hereafter until this Indenture shall have terminated, there shall be
maintained with the Collateral Agent the Collateral Account.  The Collateral Account shall be established
and maintained by the Collateral Agent at the Corporate Trust Office of the
Trustee.  All Trust Monies which are
received by the Collateral Agent shall be deposited in the Collateral Account
and thereafter shall be held by and under the sole dominion and control of the
Collateral Agent for its benefit and for the benefit of the Secured Party as a
part of the Collateral and, upon any entry upon or sale or other disposition of
the Collateral or any part thereof pursuant to any of the Security Documents,
said Trust Monies shall be applied in accordance with the applicable provisions
of Section 6.10; but prior to any such entry, sale or other disposition,
all or any part of the Trust Monies held by the Collateral Agent may be
withdrawn, and shall be released, paid or applied by the Collateral Agent in
accordance with the terms of this Article.


 


SECTION 11.2                                       Investment of
Trust Monies.


 


So long as no Default or Event of Default shall have
occurred and be continuing, all or any part of any Trust Monies held by the
Collateral Agent shall from time to time be invested or reinvested by the
Collateral Agent in any Eligible Cash Equivalents pursuant to a request by the
Issuer in the form of an Officers’ Certificate, which shall specify the
Eligible Cash Equivalents in which such Trust Monies shall be invested and
shall certify that such investments constitute Eligible Cash Equivalents; and
the Collateral Agent shall sell any such Eligible Cash Equivalent only upon
receipt of such a request by the Issuer specifying the particular Eligible Cash
Equivalent to be sold.  So long as no
Default or Event of Default occurs and is continuing, any interest or dividends
accrued, earned or paid on such Eligible Cash Equivalents (in excess of any
accrued interest or dividends paid at the time of purchase) that may be received
by the Collateral Agent shall be forthwith paid to the Issuer.  Such Eligible Cash Equivalents shall be held
by the Collateral Agent as a part of the Collateral, subject to the same
provisions hereof as the cash used by it to purchase such Eligible Cash
Equivalents.


 


The Trustee and Collateral Agent shall not be liable
or responsible for any loss resulting from such investments or sales except
only for its own negligent action, its own negligent failure to act or its own
willful misconduct in complying with this Section 11.2.


 


SECTION 11.3                                       Use of Trust
Monies; Retirement of Notes.


 


The Collateral Agent shall apply Trust Monies to the
payment of the principal of, premium, and interest on, any Notes, on any
redemption date or the Maturity Date or to the redemption thereof or the purchase
thereof upon tender or in the open market or at private sale or upon any
exchange or in any one or more of such ways, including, without limitation,
pursuant to a Change of Control Offer, as the Issuer shall request in writing,
upon receipt by the Trustee and the Collateral Agent of the following:


 


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(a)                                   Board
Resolutions of the Issuer directing the application pursuant to this Section 11.3
of a specified amount of Trust Monies and, in case any such monies are to be
applied to payment, designating the Notes so to be paid and, in case any such
monies are to be applied to the purchase of Notes, prescribing the method of
purchase, the price or prices to be paid and the maximum aggregate principal
amount of Notes to be purchased and any other provisions of this Indenture
governing such purchase;


 


(b)                                  an Officers’
Certificate, dated not more than three days prior to the date of the relevant
application, stating


 


(i)                               that no Default or Event of
Default exists unless such Default or Event of Default would be cured thereby;
and


 


(ii)                            that all conditions
precedent and covenants herein provided for relating to such application of
Trust Monies have been complied with; and


 


(c)                                   an Opinion of
Counsel stating that the documents and the cash or Eligible Cash Equivalents,
if any, which have been or are therewith delivered to and deposited with the
Collateral Agent conform to the requirements of this Indenture and all
conditions precedent herein provided for relating to such application of Trust
Monies have been complied with.


 


Upon compliance with the foregoing provisions of
this Section, the Collateral Agent shall apply Trust Monies as directed and
specified by such Board Resolution.


 


A Board Resolution expressed to be irrevocable
directing the application of Trust Monies under this Section 11.3 to the
payment of the principal of, premium and interest on the Notes shall for all
purposes of this Indenture be deemed the equivalent of the deposit of money
with the Collateral Agent in trust for such purpose.  Such Trust Monies and any cash deposited with
the Collateral Agent pursuant to paragraph (c) of this Section 11.3
for the payment of accrued interest shall not, after compliance with the
foregoing provisions of this Section, be deemed to be part of the Collateral or
Trust Monies.


 


SECTION 11.4                                       Disposition of
Notes Retired.


 


All Notes received by the Trustee and for whose
purchase Trust Monies are applied under Section 11.3, if not otherwise
cancelled, shall be promptly delivered to the Trustee for cancellation and
destruction in accordance with the Trustee’s customary procedures.


 


ARTICLE
XII


 


NOTE
GUARANTEES


 


SECTION 12.1                                       Note Guarantees.


 


(a)                                  Each Guarantor
hereby jointly and severally, fully, unconditionally and irrevocably guarantees
the Notes and obligations of the Issuer hereunder and thereunder, and
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee on behalf of such Holder, that:  (i) the principal of and premium, if any
and interest on the Notes shall be paid in full when due, whether at Stated
Maturity, by acceleration, call for redemption or otherwise (including, without
limitation, the amount that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code), together with
interest on the overdue principal, if any, and interest on any overdue 


 


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interest, to the extent lawful, and all other
obligations of the Issuer to the Holders or the Trustee hereunder or thereunder
shall be paid in full or performed, all in accordance with the terms hereof and
thereof; and (ii) in case of any extension of time of payment or renewal
of any Notes or of any such other obligations, the same shall be paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at Stated Maturity, by acceleration or otherwise.  Each of the Note Guarantees shall be a
guarantee of payment and not of collection.


 


(b)                                 Each Guarantor
hereby agrees that 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.


 


(c)                                  Each Guarantor
hereby waives the benefits of diligence, presentment, demand for 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 or any other
Person, protest, notice and all demands whatsoever and covenants that the Note
Guarantee of such Guarantor shall not be discharged as to any Note except by
complete performance of the obligations contained in such Note and such Note
Guarantee or as provided for in this Indenture. 
Each of the Guarantors hereby agrees that, in the event of a default in
payment of principal or premium, if any or interest on such Note, whether at
its Stated Maturity, by acceleration, call for redemption, purchase or
otherwise, legal proceedings may be instituted by the Trustee on behalf of, or
by, the Holder of such Note, subject to the terms and conditions set forth in this
Indenture, directly against each of the Guarantors to enforce such Guarantor’s
Note Guarantee without first proceeding against the Issuer or any other
Guarantor.  Each Guarantor agrees that
if, after the occurrence and during the continuance of an Event of Default, the
Trustee or any of the Holders are prevented by applicable law from exercising
their respective rights to accelerate the maturity of the Notes, to collect
interest on the Notes, or to enforce or exercise any other right or remedy with
respect to the Notes, such Guarantor shall pay to the Trustee for the account
of the Holders, upon demand therefor, the amount that would otherwise have been
due and payable had such rights and remedies been permitted to be exercised by
the Trustee or any of the Holders.


 


(d)                                 If any Holder
or the Trustee is required by any court or otherwise to return to the Issuer or
any Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Issuer or any Guarantor, any amount paid by any of
them to the Trustee or such Holder, the Note Guarantee of each of the
Guarantors, to the extent theretofore discharged, shall be reinstated in full
force and effect.  This paragraph (d) shall
remain effective notwithstanding any contrary action which may be taken by the
Trustee or any Holder in reliance upon such amount required to be
returned.  This paragraph (d) shall
survive the termination of this Indenture.


 


(e)                                  Each Guarantor
further agrees that, as between each 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 VI
hereof for the purposes of the Note Guarantee of such Guarantor,
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 VI
hereof, such obligations (whether or not due and payable) shall forthwith
become due and payable by each Guarantor for the purpose of the Note Guarantee
of such Guarantor.


 


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SECTION 12.2                                       Execution and
Delivery of Note Guarantee.


 


To evidence its Note Guarantee set forth in Section 12.1,
each Guarantor agrees that a notation of such Note Guarantee substantially in
the form attached hereto as Exhibit B shall be endorsed on each
Note authenticated and delivered by the Trustee.  Such notation of Note Guarantee shall be
signed on behalf of such Guarantor by an officer of such Guarantor (or, if an
officer is not available, by a board member or director) on behalf of such
Guarantor by manual or facsimile signature. 
In case the officer, board member or director of such Guarantor who shall
have signed such notation of Note Guarantee shall cease to be such officer,
board member or director before the Note on which such Note Guarantee is endorsed
shall have been authenticated and delivered by the Trustee, such Note
nevertheless may be authenticated and delivered as though the Person who signed
such notation of Note Guarantee had not ceased to be such officer, board member
or director.


 


Each Guarantor agrees that its Note Guarantee set
forth in Section 12.1 shall remain in full force and effect and apply to
all the Notes notwithstanding any failure to endorse on each Note a notation of
such Note Guarantee.  The delivery of any
Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of any Note Guarantee set forth in this Indenture on
behalf of the Guarantors.


 


The failure to endorse a Note Guarantee shall not
affect or impair the validity thereof.


 


SECTION 12.3                                       Severability.


 


In case any provision of any Note Guarantee 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 12.4                                       Limitation of
Guarantors’ Liability.


 


Each Guarantor and by its acceptance hereof each
Holder confirms that it is the intention of all such parties that the Note
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of the Federal Bankruptcy Code, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal or state law or
the provisions of its local law relating to fraudulent transfer or
conveyance.  To effectuate the foregoing
intention, the Trustee, the Holders and Guarantors hereby irrevocably agree
that the obligations of such Guarantor under its Note Guarantee shall be
limited to the maximum amount that will not, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from, rights to receive contribution from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Note Guarantee, result in the obligations of such Guarantor
under its Note Guarantee constituting a fraudulent transfer or conveyance.


 


SECTION 12.5                                       Guarantors May Consolidate,
Etc., on Certain Terms.


 


Except as otherwise provided in Section 12.6,
no Guarantor may consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person) another Person unless:


 


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


 


(2)                                  either:


 


93
















 


(A)          such Guarantor will
be the surviving or continuing Person; or


 


(B)           the Person formed by or surviving any
such consolidation or merger is another Guarantor or assumes all the
obligations of such Guarantor under the Note Guarantee of such Guarantor, this
Indenture, the Security Documents and the Registration Rights Agreement; and


 


(3)           the Issuer delivers,
or causes to be delivered, to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, assumption or merger
complies with the requirements of this Indenture.


 


In case of any such consolidation or merger and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee and the due and punctual performance of all of the covenants and conditions
of this Indenture to be performed by the Guarantor, such successor Person shall
succeed to and be substituted for the Guarantor with the same effect as if it
had been named herein as a Guarantor. 
All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all such Note Guarantees had been issued at the date of the execution hereof.


 


Except as set forth in Articles IV and V hereof, and
notwithstanding clauses (1) and (2) above, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or merger of a
Guarantor with or into the Issuer or another Guarantor, or shall prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Issuer or another Guarantor.


 


SECTION 12.6                                       Releases
Following Sale of Assets.


 


Any Guarantor shall be released and relieved of any
obligations under this Note Guarantee, in connection with (i) any sale of
all of the Capital Interests of a Guarantor by the Issuer or any Subsidiary of
the Issuer to a Person that is not (either before or after giving effect to
such transaction) a Restricted Subsidiary or (ii) any sale or other
disposition by the Issuer or any Subsidiary of the Issuer of all or
substantially all of the assets of a Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect to
such transaction) a Restricted Subsidiary, then in each case such Guarantor (or
the Person concurrently acquiring such assets of such Guarantor) shall be released
and relieved of any obligations under its Note Guarantee and any liens granted
thereby in support thereof; provided that (A) the
Net Cash Proceeds of such sale or other disposition are applied in accordance
with Section 4.10 and (B) the Issuer delivers to the Trustee an
Officers’ Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Issuer in accordance with the provisions of
this Indenture, including without limitation Section 4.10.  Upon delivery to the Trustee of such Officers’
Certificate and Opinion of Counsel, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Note Guarantee.


 


Any Guarantor not released from its obligations
under this Note Guarantee shall remain liable for the full amount of principal
of and interest on the Notes and for the other obligations of any Guarantor
under this Indenture as provided in this Article XII.


 


SECTION 12.7                                       Release of a
Guarantor.


 


Any Guarantor that is designated by the Board of
Directors of the Issuer as an Unrestricted Subsidiary in accordance with the
terms of this Indenture shall, at such time, be deemed automatically and
unconditionally released and discharged of its obligations under its Note
Guarantee without any 


 


94

















 


further action on the part
of the Trustee or any Holder.  The
Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of the Issuer’s request for such release accompanied by an Officers’
Certificate certifying as to the compliance with this Section 12.7.  Any Guarantor not so released shall remain
liable for the full amount of principal of and interest on the Notes as provided
in its Note Guarantee.


 


SECTION 12.8                                       Benefits
Acknowledged.


 


Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Indenture and that its guarantee and waivers pursuant to its Note
Guarantee are knowingly made in contemplation of such benefits.


 


SECTION 12.9                                       Future
Guarantors.


 


Each Person that is required to become a Guarantor
after the Issue Date pursuant to Section 4.20 shall promptly execute and
deliver to the Trustee a supplemental indenture pursuant to which such Person
shall become a Guarantor. Concurrently with the execution and delivery of such
supplemental indenture, the Issuer shall deliver to the Trustee an Opinion of
Counsel and an Officers’ Certificate to the effect that such supplemental
indenture has been duly authorized, executed and delivered by such Person and
that, subject to the application of bankruptcy, insolvency, moratorium,
fraudulent conveyance or transfer and other similar laws relating to creditors’
rights generally and to the principles of equity, whether considered in a
proceeding at law or in equity, the Note Guarantee of such Guarantor is a
legal, valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms and/or to such other matters as the
Trustee may reasonably request.


 


ARTICLE
XIII



MISCELLANEOUS


 


SECTION 13.1                                       TIA Controls.


 


If any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by TIA § 318(c), the imposed duties shall
control.


 


SECTION 13.2                                       Notices.


 


Any notice or communication by the Issuer, any
Guarantor or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing
next day delivery, to the others address:


 


	
  If to the Issuer or any Guarantor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KEMET Corporation

  2835 KEMET Way

  Simpsonville, South Carolina 29681

  	
   

  	
   

  
	
  Facsimile:

  	
  (864) 228-4161

  	
   

  	
   

  
	
  Attention:

  	
  Chief Financial Officer

  	
   

  	
   

  



 


95

















 


	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Kirkland & Ellis
  LLP

  300 North LaSalle Street

  Chicago, Illinois  60654

  	
   

  	
   

  
	
  Facsimile:

  	
  (312) 862-2200

  	
   

  	
   

  
	
  Attention:

  	
  H. Kurt von Moltke, P.C.

  	
   

  	
   

  
	
   

  	
  William R. Burke

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  If to the Trustee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wilmington Trust Company

  1100 North Market Street

  	
   

  	
   

  
	
  Wilmington, Delaware 19890

  Facsimile: (302) 636-4145

  Attention: Corporate Trust Administration

  	
   

  	
   

  



 


The Issuer, the Guarantors and the Trustee, by
notice to the others, may designate additional or different addresses for
subsequent notices or communications.


 


All notices and communications (other than those
sent to Holders and the Trustee) shall be deemed to have been duly given:  at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if sent by facsimile; and the
next Business Day after timely delivery to the courier, if sent by overnight
air courier promising next Business Day delivery.


 


Any notice or communication to a Holder shall be
sent electronically or mailed by first class mail or by overnight air courier
promising next Business Day delivery to its address shown on the register kept
by the Registrar.  Any notice or
communication shall also be so sent to any Person described in TIA § 313(c), to
the extent required by the TIA.  Failure
to send a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.


 


Notwithstanding any other provision of this
Indenture or any Note, where this Indenture or any Note provides for notice of
any event (including notice of any redemption) to a Holder of a Global Note
(whether by mail or otherwise) such notice shall be sufficiently given if given
to the Depositary for such Note (or as designee) pursuant to the customary
procedures of such Depositary.


 


If a notice or communication is mailed or delivered
in the manner provided above within the time prescribed, it is duly given,
whether or not the addressee receives it, except in the case of notices or
communications given to the Trustee, which shall be effective only upon actual
receipt.


 


If the Issuer mails or delivers a notice or
communication to Holders, it shall mail or deliver a copy to the Trustee and
each Agent at the same time.


 


The Trustee agrees to accept and act upon
instructions or directions pursuant to this Indenture sent by unsecured e-mail,
facsimile transmission or other similar unsecured electronic methods; provided, however, that,
the Trustee shall have received an incumbency certificate listing persons designated
to give such instructions or directions and containing specimen signatures of
such designated persons, which such incumbency certificate shall be amended and
replaced on or before delivery of any such instructions or directions whenever
a person is to be added or deleted from the listing.  If the party elects
to give the Trustee e-mail or facsimile instructions (or instructions by a
similar electronic method) and the 


 


96

















 


Trustee in its discretion
elects to act upon such instructions, the Trustee’s understanding of such
instructions shall be deemed controlling.  The Trustee shall not be liable
for any losses, costs or expenses arising directly or indirectly from the
Trustee’s reliance upon and compliance with such instructions not-withstanding
such instructions conflict or are inconsistent with a subsequent written
instruction.  The party providing electronic instructions agrees to assume
all risks arising out of the use of such electronic methods to submit
instructions and directions to the Trustee, including the risk of the Trustee
acting on unauthorized instructions, and the risk or interception and misuse by
third parties.


 


SECTION 13.3                                       Communication
by Holders with Other Holders.


 


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


 


SECTION 13.4                                       Certificate and
Opinion as to Conditions Precedent.


 


Upon any request or application by the Issuer to the
Trustee to take any action under this Indenture (other than the initial
issuance of the Notes), the Issuer shall furnish to the Trustee upon request:


 


(a)            an Officers’ Certificate (which shall include the
statements set forth in Section 13.5 hereof) stating that, in the opinion
of the signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and


 


(b)           an Opinion of Counsel (which shall include the statements
set forth in Section 13.5 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.


 


SECTION 13.5                                       Statements
Required in Certificate or Opinion.


 


Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture (other
than a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the
provisions of TIA § 314(e) and shall include:


 


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


 


(b)           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;


 


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


 


(d)           a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.


 


97

















 


SECTION 13.6                                       Rules by
Trustee and Agents.


 


The Trustee may make reasonable rules for
action by or at a meeting of Holders. 
The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.


 


SECTION 13.7                                       No Personal
Liability of Directors, Officers, Employees and Stockholders.


 


No director, officer, employee, stockholder, member,
general or limited partner or incorporator, past, present or future, of the
Issuer or any of its Subsidiaries, as such or in such capacity, shall have any
personal liability for any obligations of the Issuer under the Notes, any Note
Guarantee or this Indenture or the Security Documents by reason of his, her or
its status as such director, officer, employee, stockholder, member, general or
limited partner or incorporator.


 


SECTION 13.8                                       Governing Law.


 


THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.  The parties to this Indenture each hereby
irrevocably submits to the non-exclusive jurisdiction of any New York State or
federal court sitting in the Borough of Manhattan in The City of New York in
any action or proceeding arising out of or relating to the Notes, the Note
Guarantees or this Indenture, and all such parties hereby irrevocably agree
that all claims in respect of such action or proceeding may be heard and determined
in such New York State or federal court and hereby irrevocably waive, to the
fullest extent that they may legally do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE, THE NOTES, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED
HEREBY.


 


SECTION 13.9                                       No Adverse
Interpretation of Other Agreements.


 


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


 


SECTION 13.10                                 Successors.


 


All agreements of the Issuer and the Guarantors in
this Indenture and the Notes and the Note Guarantees, as applicable, shall bind
their respective successors and assigns. 
All agreements of the Trustee in this Indenture shall bind its
successors and assigns.


 


SECTION 13.11                                 Severability.


 


In case any provision in this Indenture or in 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 13.12                                 Counterpart
Originals.


 


The parties may sign any number of copies of this
Indenture.  Each signed copy shall be an
original, but all of them together represent the same agreement.


 


98

















 


SECTION 13.13                                 Table of
Contents, Headings, Etc.


 


The Table of Contents, Cross-Reference Table 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 of this Indenture
and shall in no way modify or restrict any of the terms or provisions hereof.


 


SECTION 13.14                                 Acts of Holders.


 


(a)           Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the “Act” of Holders signing such instrument
or instruments.  Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Issuer, if made in the manner provided in this Section 13.14.


 


(b)           The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution
thereof.  Where such execution is by a
signer acting in a capacity other than such signer’s individual capacity, such
certificate or affidavit shall also constitute sufficient proof of such signer’s
authority.  The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.


 


(c)           The ownership of Notes shall be proved by the Holder list
maintained under Section 2.5 hereunder.


 


(d)           Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.


 


(e)           If the Issuer shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Issuer may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Issuer shall have no obligation to do so. 
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of outstanding Notes have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
outstanding Notes shall be computed as of such record date; provided that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
six months after the record date.


 


99

















 


SECTION 13.15                                 Intercreditor
Agreement.


 


In the event of any conflict between this
Indenture and an Intercreditor Agreement entered into in accordance with the
terms hereof, the provisions of such Intercreditor Agreement shall control.  The provisions of this Section 13.15 are
solely for the benefit of the Trustee and the Holders and shall not give the
Issuer or any Guarantor, its successors or assigns or any other person any
rights vis-à-vis the Trustee or any Holder.


 


[Signatures on following page]


 


100

















 


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


 


	
   

  	
   

  	
  KEMET
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  William M. Lowe, Jr.

  
	
   

  	
   

  	
   

  	
  Name:
   William M. Lowe, Jr.

  
	
   

  	
   

  	
   

  	
  Title:
   EVP and CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KEMET
  ELECTRONICS CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  William M. Lowe, Jr.

  
	
   

  	
   

  	
   

  	
  Name:
   William M. Lowe, Jr.

  
	
   

  	
   

  	
   

  	
  Title:
   EVP and CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KEMET
  SERVICES CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Conrado Hinojosa

  
	
   

  	
   

  	
   

  	
  Name:
   Conrado Hinojosa

  
	
   

  	
   

  	
   

  	
  Title:
   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KRC
  TRADE CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  William M. Lowe, Jr.

  
	
   

  	
   

  	
   

  	
  Name:
   William M. Lowe, Jr.

  
	
   

  	
   

  	
   

  	
  Title:
   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  FOREST ELECTRIC COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Charles C. Meeks, Jr.

  
	
   

  	
   

  	
   

  	
  Name:  Charles
  C. Meeks, Jr.

  
	
   

  	
   

  	
   

  	
  Title:  President

  



 


Signature
Page to Indenture


 

















 


	
   

  	
  WILMINGTON
  TRUST COMPANY,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael G. Oller, Jr.

  
	
   

  	
   

  	
  Name:
   Michael G. Oller, Jr.

  
	
   

  	
   

  	
  Title:  Assistant
  Vice President

  



 


Signature
Page to Indenture


 

















 


EXHIBIT A


 


FORM OF
101⁄2% SENIOR NOTE


 


(Face
of 101⁄2% Senior Note)

101⁄2% Senior Notes due 2018


 


[Global Notes Legend]


 


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


 


TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE.


 


[Restricted Notes Legend]


 


THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5
OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM.  EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.  THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE KEMET CORPORATION (THE “ISSUER”) THAT (I) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(A) INSIDE
THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE
SECURITIES ACT, (B) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF


 


A-1
















 


APPLICABLE) OR (D) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER IF THE ISSUER SO
REQUESTS), (2) TO THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (II) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (I) ABOVE.  NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALE OF THE SECURITY EVIDENCED HEREBY.


 


A-2

















 


KEMET
CORPORATION

101⁄2% SENIOR NOTE DUE 2018


 




	
  No. [A-1/S-1]

  	
   

  	
  CUSIP: [144A - 488360AE8 / REG S. - U48789 AB4]

  
	
   

  	
   

  	
  ISIN: [144A -US488360AE88 / REG S. - USU48789AB48]

  






 


KEMET
Corporation promises to pay to Cede & Co. or registered assigns, the
principal sum of [TWO HUNDRED AND THIRTY MILLION Dollars ($230,000,000)] on May 1,
2018.


 


Interest Payment Dates: May 1 and November 1,
beginning November 1, 2010


 


Record Dates: 
April 15 and October 15


 


Reference is made to further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as set forth at this place.


 


Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by manual
signature, this Note shall not be entitled to any benefits under this Indenture
referred to on the reverse hereof or be valid or obligatory for any purpose.


 


A-3

















 


	
   

  	
  KEMET
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-4

















 


TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

This is one of the 101⁄2% Senior Notes due 2018

referred to in the within-mentioned Indenture:


 


Dated:  May 5, 2010


 


WILMINGTON TRUST COMPANY, not in its


individual capacity, but solely as Trustee


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  



 


A-5

















 


(Reverse of 101⁄2% Senior Note)

101⁄2% Senior Notes due 2018

KEMET CORPORATION


 


Capitalized terms used herein shall have the
meanings assigned to them in the Indenture referred to below unless otherwise
indicated.


 


(1)                                  Interest.


 


(a)                                  KEMET Corporation, a
Delaware corporation (the “Issuer”),
promises to pay interest on the principal amount of this Note at a rate of 101⁄2%
per annum.  The Issuer will pay interest
in United States dollars (except as otherwise provided herein) semiannually in
arrears on May 1 and November 1, commencing on November 1, 2010
or if any such day is not a Business Day, on the next succeeding Business Day
(each an “Interest  Payment Date”).  Interest on the Notes shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from and including May 5, 2010. 
The Issuer shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.  Interest shall be computed on the basis of a
360-day year comprised of twelve 30-day months. 
The interest rate on the Notes will in no event be higher than the
maximum rate permitted by New York law as the same may be modified by United
States law of general application.


 


[(b)                        Registration
Rights Agreement.  The Holders
are entitled to the benefits of a Registration Rights Agreement, dated as of May 5,
2010, among the Issuer, the Guarantors party thereto and the Initial
Purchasers.](1)


 


(2)                                  Method of Payment.  The Issuer will pay interest on the Notes
(except defaulted interest) on the applicable Interest Payment Date to the
Persons who are registered Holders at the close of business on the April 15
and October 15 preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to
defaulted interest.  The Notes shall be
payable as to principal, premium and interest at the office or agency of the
Issuer maintained for such purpose within or without the City and State of New
York, or, at the option of the Issuer, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately
available funds shall be required with respect to principal of, premium, if
any, and interest on, all Global Notes and all other Notes the Holders of which
shall have provided written wire transfer instructions to the Issuer and the
Paying Agent.  Such payment shall be in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.


 






(1)                                  To be included
only in the Initial Notes on the Issue Date and any Additional Notes that bear
the Restricted Note Legend.


 


A-6

















 


Any payments of principal of and interest on this
Note prior to Stated Maturity shall be binding upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon.  The amount due and payable at the maturity of
this Note shall be payable only upon presentation and surrender of this Note at
an office of the Trustee or the Trustee’s agent appointed for such purposes.


 


(3)                                  Paying Agent and Registrar.  Initially, Wilmington Trust Company, the
Trustee under the Indenture, shall act as Paying Agent and Registrar.  The Issuer may change any Paying Agent or
Registrar without notice to any Holder. 
The Issuer or any of its Restricted Subsidiaries may act in any such
capacity.


 


(4)                                  Indenture.  The Issuer issued the Notes under an
Indenture, dated as of May 5, 2010 (the “Indenture”),
among the Issuer, the Guarantors and the Trustee.  The terms of the Notes include those stated
in the Indenture and those made a part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”).  To the extent
the provisions of this Note are inconsistent with the provisions of the
Indenture, the Indenture shall govern. 
The Notes are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of such terms.  The Indenture permits the issuance of
Additional Notes subject to compliance with certain conditions.


 


The payment of principal and interest on the Notes
is unconditionally guaranteed on a senior basis by the Guarantors.


 


(5)                                   Optional
Redemption.


 


(a)                                  The Notes may be redeemed,
in whole or in part, at any time prior to May 1, 2014, at the option of
the Issuer upon not less than 30 nor more than 60 days’ prior notice mailed by
first-class mail to each Holder’s registered address, at a Redemption Price
equal to 100% of the principal amount of the Notes redeemed plus the Applicable
Premium as of, and accrued and unpaid interest, if any, to, but not including,
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).


 


(b)                                 The Notes may be redeemed,
at the option of the Issuer, in whole or in part, at any time on or after May 1,
2014, upon not less than 30 nor more than 60 days’ notice at the Redemption
Prices (expressed as percentages of the principal amount to be redeemed) set
forth below, plus accrued and unpaid interest, if any, to, but not including,
the redemption date (subject to the right of Holders of record on the relevant
regular record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period beginning on May 1 of the
years indicated:


 


	
  Year

  	
   

  	
  Redemption

  Price

  	
   

  
	
  2014

  	
   

  	
  105.250

  	
  %

  
	
  2015

  	
   

  	
  102.625

  	
  %

  
	
  2016 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


(c)                                  Notwithstanding the
foregoing, prior to May 1, 2013, the Issuer may, with the net proceeds of
one or more Qualified Equity Offerings, redeem, on one or more occasions, in
whole or in part, up to 35% of the aggregate principal amount of the
outstanding Notes (including Additional Notes) at a Redemption Price equal to
110.500% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to, but not including, the date of redemption (subject to the
right of Holders of record 


 


A-7

















 


on the relevant record date
to receive interest due on the relevant interest payment date); provided that at least 65% of the principal amount of Notes
then outstanding (including Additional Notes) remains outstanding immediately
after the occurrence of any such redemption (excluding Notes held by the Issuer
or its Subsidiaries) and that any such redemption occurs within 90 days
following the date of closing of any such Qualified Equity Offering.


 


(6)                                  Mandatory Redemption.  Except as set forth under Sections 3.9, 4.10
and 4.14 of the Indenture, the Issuer shall not be required to make mandatory
redemption or sinking fund payments with respect to the Notes.


 


(7)                                   Repurchase at
Option of Holder.


 


(a)                                  Upon the occurrence of a
Change of Control, each Holder will have the right to require the Issuer to
repurchase all or any part (equal to $2,000 and any integral multiple of $1,000
in excess thereof) of such Holder’s Notes pursuant to the offer described below
at an offer price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest thereon to the date of purchase.  Within 30 days following any Change of
Control, the Issuer will mail or deliver a notice to each Holder describing the
transaction or transactions that constitute the Change of Control setting forth
the procedures governing an Offer to Purchase upon a Change of Control
Triggering Event required by the Indenture.


 


(b)                                 Upon the occurrence of
certain Asset Sales, the Issuer may be required to offer to purchase Notes.


 


(c)                                  Holders that are the subject
of an Offer to Purchase will receive notice of an Offer to Purchase pursuant to
an Asset Sale or a Change of Control Triggering Event from the Issuer prior to
any related Purchase Date and may elect to have such Notes purchased by
completing the form titled “Option of Holder to Elect Purchase” appearing
below.


 


(8)                                  Notice of Redemption.  Notice of redemption shall be delivered at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address.  Notes in denominations larger than $2,000 may
be redeemed in part but only in a minimum amount of $2,000 principal amount
(and integral multiples of $1,000 in excess thereof), unless all of the Notes
held by a Holder are to be redeemed.  On
and after the redemption date, interest ceases to accrue on the Notes or
portions hereof called for redemption.


 


(9)                                  Denominations, Transfer,
Exchange.  The Notes
are in registered form without coupons in initial denominations of $2,000 and
any integral multiple of $1,000 in excess thereof.  The transfer of the Notes may be registered
and the Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Issuer may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. 
The Issuer need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed portion of
any Note being redeemed in part.  Also,
it need not exchange or register the transfer of any Notes for a period of 15
days before a selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.


 


(10)                            Persons Deemed Owners.  The registered holder of a Note may be
treated as its owner for all purposes.


 


A-8

















 


(11)                            Amendment, Supplement and
Waiver.  The Indenture, the Notes, the
Note Guarantees and the Security Documents may be amended, supplemented or
waived as provided in the Indenture.


 


(12)                            Defaults and Remedies.  The Events of Default relating to the Notes
are defined in Section 6.1 of the Indenture.  If an Event of Default (other than an Event
of Default specified in Section 6.1(8) of the Indenture with respect
to the Issuer) occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the outstanding Notes may declare the principal of the Notes and any accrued
interest on the Notes to be due and payable immediately by a notice in writing
to the Issuer (and to the Trustee if given by Holders); 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, under certain circumstances, rescind and annul such acceleration if all
Events of Default, other than the nonpayment of accelerated principal of or
interest on the Notes, have been cured or waived as provided in the Indenture.


 


In the event of a declaration of acceleration of the
Notes solely because an Event of Default described in Section 6.1(6) of
the Indenture has occurred and is continuing, the declaration of acceleration
of the Notes shall be automatically rescinded and annulled if the event of
default or payment default triggering such Event of Default pursuant to Section 6.1(6) of
the Indenture shall be remedied or cured by the Issuer or a Restricted Subsidiary
of the Issuer or waived by the holders of the relevant Debt within 20 Business
Days after the declaration of acceleration with respect thereto and if the
rescission and annulment of the acceleration of the Notes would not conflict
with any judgment or decree of a court of competent jurisdiction obtained by
the Trustee for the payment of amounts due on the Notes.


 


If an Event of Default specified in Section 6.1(8) of
the Indenture occurs with respect to the Issuer, the principal of and any
accrued interest on the Notes then outstanding shall ipso facto become
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.  The Trustee
may withhold from Holders notice of any Default (except Default in payment of
principal of, premium, if any, and interest) if the Trustee determines that
withholding notice is in the interests of the Holders to do so.


 


(13)                            Trustee Dealings with The
Issuer.  The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Issuer, the Guarantors or their respective Affiliates, and may
otherwise deal with the Issuer, the Guarantors or their respective Affiliates,
as if it were not the Trustee.


 


(14)                            No Recourse Against Others.  No director, officer, employee, stockholder,
member, general or limited partner or incorporator, past, present or future, of
the Issuer or any of its Subsidiaries, as such or in such capacity, shall have
any personal liability for any obligations of the Issuer under the Notes, any
Note Guarantee or the Indenture or the Security Documents by reason of his, her
or its status as such director, officer, employee, stockholder, member, general
or limited partner or incorporator.


 


(15)                            Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.


 


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


 


A-9

















 


(17)                            CUSIP, ISIN 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 and the Trustee may use CUSIP,
ISIN or other similar numbers in notices of redemption as a convenience to the
Holders.  No representation is made as to
the accuracy of such numbers either as printed on the Notes or as contained in
any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.


 


The Issuer shall furnish to any Holder upon written
request and without charge a copy of the Indenture.  Requests may be made to:


 


KEMET
Corporation

2835 KEMET Way

Simpsonville, South Carolina 29681

Facsimile:  (864) 228-4161

Attention:  Chief Financial Officer


 


A-10

















 


ASSIGNMENT
FORM


 




	
  To assign this Note, fill in the form below:  (I) or (we) assign and transfer this
  Note to:

  
	
   

  
	
   

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

  
	
   

  
	
   

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

  






 


and irrevocably appoint
                                                                                                                  

to transfer this Note on the books of the Issuer.  The agent may substitute another to act for
him.


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the face of this Note)

  



 


 


	
  Signature
  guarantee:

  	
   

  	
   

  
	
   

  	
  (Signature must be
  guaranteed by a participant

  in a recognized signature guarantee medallion

  program)

  



 


A-11
















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you want to elect to have this Note purchased by
the Issuer pursuant to Section 4.10 (Asset Sale) or 4.14 (Change of
Control) of the Indenture, check the box below:


 


o Section 4.10      o Section 4.14


 


If you want to elect to have only part of the Note
purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture,
state the amount you elect to have purchased: 
$[                 ]


 


	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign
  exactly as your name appears on the Note)

  
	
   

  	
   

  
	
   

  
	
  Signature
  guarantee:

  	
   

  	
   

  
	
   

  	
  (Signature
  must be guaranteed by a participant

  in a recognized signature guarantee medallion

  program)

  
							



 


A-12

















 


CERTIFICATE TO BE DELIVERED UPON

EXCHANGE OR REGISTRATION

OF TRANSFER RESTRICTED NOTES


 


KEMET
Corporation

2835 KEMET Way

Simpsonville, South Carolina  29681

Facsimile:  (864) 228-4161

Attention:  Chief Financial Officer


 


Wilmington Trust Company

1100 North Market Street


Wilmington, Delaware 19890

Facsimile: (302) 636-4145

Attention: Corporate Trust Administration


 


	
  Re:

  	
  KEMET
  Corporation 101⁄2% Senior Notes due 2018

  
	
   

  	
  CUSIP
  # [    ]

  	
   

  



 


Reference is hereby made to that certain Indenture
dated May 5, 2010 (the “Indenture”)
among KEMET Corporation (the “Issuer”), the
Guarantors party thereto and Wilmington Trust Company, as trustee (the “Trustee”). 
Capitalized terms used but not defined herein shall have the meanings
set forth in the Indenture.


 


This certificate relates to
$             
principal amount of Notes held in (check applicable space) [   ] book-entry or [   ] definitive form by the undersigned.


 


The undersigned
                                    
(transferor) (check one box below):


 


o            hereby requests the Registrar to
deliver in exchange for its beneficial interest in the Global Note held by the
Depository a Note or 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), in accordance with Section 2.6
of the Indenture;


 


o            pursuant to an effective
registration statement under the Securities Act of 1933, as amended; or


 


o            hereby requests the Trustee to
exchange or register the transfer of a Note or Notes to                          
(transferee).


 


In connection with any transfer of any of the Notes
evidenced by this certificate occurring prior to the expiration of the
applicable periods referred to in Rule 144 under the Securities Act of
1933, as amended, the undersigned confirms that such Notes are being
transferred in accordance with its terms:


 


CHECK ONE BOX BELOW:


 


(1)           o            to the Issuer or any of its
subsidiaries; or


 


(2)           o            inside the United States to a “qualified
institutional buyer” (as defined in Rule 144A under the Securities Act of
1933, as amended) that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that such transfer is
being made in reliance 


 


A-13

















 


on Rule 144A under the
Securities Act of 1933, as amended, in each case pursuant to and in compliance
with Rule 144A thereunder; or


 


(3)           o            outside the United States in an
offshore transaction within the meaning of Regulation S under the Securities
Act of 1933, as amended, in compliance with Rule 904 thereunder.


 


A-14

















 


Unless one of the boxes is checked, the Registrar
will refuse to register any of the Notes evidenced by this certificate in the
name of any person other than the registered holder thereof.


 


 


	
   

  	
   

  
	
   

  	
  Signature

  



 


 


	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
  (Signature
  must be guaranteed by a participant

  in a recognized signature guarantee medallion program)

  



 


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


 


The undersigned represents and warrants that it is
purchasing this Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities
Act of 1933, as amended (“Rule 144A”), and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Issuer as the undersigned has requested pursuant
to Rule 144A or has determined not to request such information and that it
is aware that the transferor is relying upon the undersigned’s foregoing representations
in order to claim the exemption from registration provided by Rule 144A.


 


[Name of Transferee]


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  
	
  NOTICE:
  To be executed by an executive officer

  



 


A-15

















 


SCHEDULE OF EXCHANGES OF 101⁄2% SENIOR NOTES DUE 2018


 


The following exchanges of a part of this Global
Note for other 101⁄2% Senior Notes due 2018 have been made:


 


	
  Date
  of Exchange

  	
   

  	
  Amount of

  Decrease in

  Principal Amount

  of this Global Note

  	
   

  	
  Amount of

  Increase in

  Principal Amount

  of this Global Note

  	
   

  	
  Principal Amount

  of this Global Note

  Following Such

  Decrease (or

  Increase)

  	
   

  	
  Signature of

  Authorized Officer

  of Trustee or

  Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-16

















 


EXHIBIT B


 


FORM OF NOTATIONAL GUARANTEE


 


The Guarantor listed below (hereinafter referred to
as the “Guarantor,” which term includes any
successors or assigns under that certain Indenture, dated as of May 5,
2010, by and among KEMET Corporation (the “Issuer”), the
Guarantors party thereto and the Trustee (as amended and supplemented from time
to time, the “Indenture”) and any additional
Guarantors) has guaranteed the Notes and the obligations of the Issuer under
the Indenture, which include (i) the due and punctual payment of the
principal of, premium, if any, and interest on the Notes of the Issuer, whether
at stated maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal and premium, if any, and (to the extent
permitted by law) interest on any interest, if any, on the Notes, and the due
and punctual performance of all other obligations of the Issuer to the Holders
or the Trustee all in accordance with the terms set forth in Article XII
of the Indenture, (ii) in case of any extension of time of payment or renewal
of any Notes or any such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise, and (iii) the
payment of any and all costs and expenses (including reasonable attorneys’
fees) incurred by the Trustee or any Holder in enforcing any rights under this
Note Guarantee or the Indenture.


 


The obligations of each Guarantor to the Holders and
to the Trustee pursuant to this Note Guarantee and the Indenture are expressly
set forth in Article XII of the Indenture and reference is hereby
made to such Indenture for the precise terms of this Note Guarantee.


 


No stockholder, employee, officer, director or
incorporator, as such, past, present or future of each Guarantor shall have any
liability under this Note Guarantee by reason of his or its status as such
stockholder, employee, officer, director or incorporator.


 


This is a continuing Note Guarantee and shall remain
in full force and effect and shall be binding upon each Guarantor and its
successors and assigns until full and final payment of all of the Issuer’s obligations
under the Notes and Indenture or until released in accordance with the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders, and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof.  This is a Note Guarantee of payment and not
of collectibility.


 


This Note Guarantee shall not be valid or obligatory
for any purpose until the certificate of authentication on the Note upon which
this Note Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.  The Obligations of each Guarantor under its
Note Guarantee shall be limited to the extent necessary to insure that it does
not constitute a fraudulent conveyance under applicable law.


 


THE TERMS OF ARTICLE XII OF THE INDENTURE ARE
INCORPORATED HEREIN BY REFERENCE.


 


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Capitalized terms used herein have the same meanings
given in the Indenture unless otherwise indicated.


 


	
  Dated
  as of

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [NAME
  OF GUARANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 


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EXHIBIT C


 


[FORM OF CERTIFICATE TO BE DELIVERED

IN CONNECTION WITH TRANSFERS PURSUANT TO RULE 144A]


 


KEMET
Corporation

2835 KEMET Way

Simpsonville, South Carolina  29681

Facsimile:  (864) 228-4161

Attention:  Chief Financial Officer


 


Wilmington Trust Company

1100 North Market Street


Wilmington, Delaware 19890

Facsimile: (302) 636-4145

Attention: Corporate Trust Administration


 


Re:                               KEMET Corporation
101⁄2% Senior Notes due 2018 (the “Notes”)


 


Ladies
and Gentlemen:


 


In connection with our proposed sale of
$                
aggregate principal amount at maturity of the Notes, we hereby certify that
such transfer is being effected pursuant to and in accordance with Rule 144A
(“Rule 144A”) under the United States Securities Act of 1933, as amended
(the “Securities Act”), and, accordingly, we hereby further certify that the
Notes are being transferred to a person that we reasonably believe is purchasing
the Notes for its own account, or for one or more accounts with respect to
which such person exercises sole investment discretion, and such person and
each such account is a “qualified institutional buyer” within the meaning of Rule 144A
in a transaction meeting the requirements of Rule 144A and such Notes are
being transferred in compliance with any applicable blue sky securities laws of
any state of the United States.


 


You and the Issuer are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of Transferor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signature

  



 


	
  Signature
  guarantee:

  	
   

  	
   

  
	
   

  	
  (Signature
  must be guaranteed by a participant

  in a recognized signature guarantee medallion

  program)

  



 


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EXHIBIT D


 


[FORM OF CERTIFICATE TO BE DELIVERED

IN CONNECTION WITH TRANSFERS

PURSUANT TO REGULATION S]


 


KEMET
Corporation

2835 KEMET Way

Simpsonville, South Carolina  29681

Facsimile:  (864) 228-4161

Attention:  Chief Financial Officer


 


Wilmington Trust Company

1100 North Market Street


Wilmington, Delaware 19890

Facsimile: (302) 636-4145

Attention: Corporate Trust Administration


 


Re:                               KEMET
Corporation 101⁄2% Senior Notes due 2018 (the “Notes”)


 


Ladies
and Gentlemen:


 


In connection with our proposed sale of
$                
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we
represent that:


 


(1)           the
offer of the Notes was not made to a person in the United States;


 


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


 


(3)           no
directed selling efforts have been made in the United States in contravention
of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and


 


(4)           the
transaction is not part of a plan or scheme to evade the registration requirements
of the Securities Act.


 


In addition, if the sale is made during a restricted
period and the provisions of Rule 903(b) or Rule 904(b) of
Regulation S are applicable thereto, we confirm that such sale has been made in
accordance with the applicable provisions of Rule 903(b) or Rule 904(b),
as the case may be.


 


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The Issuer and you are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.  Terms used in this certificate have the meanings
set forth in Regulation S.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  



 


 


	
  Signature
  guarantee:

  	
   

  	
   

  
	
   

  	
  (Signature
  must be guaranteed by a participant

  in a recognized signature guarantee medallion

  program)

  



 


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