exv4w2






Exhibit 4.2




Execution Version




 




BASIC ENERGY SERVICES, INC.

as Issuer,




The GUARANTORS named herein



and



WELLS FARGO BANK, N.A.

as Trustee



 





INDENTURE



Dated as of February 15, 2011



 





73/4%
Senior Notes due 2019, Series A



73/4% Senior Notes due 2019, Series B



 




 









 





CROSS-REFERENCE TABLE




	 	 	 	 
	TIA	 	Indenture
	Section	 	Section
	310	(a)(1) 	 	7.10
	 	(a)(2) 	 	7.10
	 	(a)(3) 	 	N.A.
	 	(a)(4) 	 	N.A
	 	(a)(5) 	 	7.10
	 	(b) 	 	7.08; 7.10; 11.02
	 	(b)(1) 	 	7.10
	 	(c) 	 	N.A.
	311	(a) 	 	7.11
	 	(b) 	 	7.11
	 	(c) 	 	N.A.
	312	(a) 	 	2.05
	 	(b) 	 	11.03
	 	(c) 	 	11.03
	313	(a) 	 	7.06
	 	(b)(1) 	 	7.06
	 	(b)(2) 	 	7.06
	 	(c) 	 	7.06; 11.02
	 	(d) 	 	7.06
	314	(a) 	 	4.02; 4.04; 4.08; 11.02
	 	(b) 	 	12.02; 12.07
	 	(c)(1) 	 	2.02; 9.01
	 	(c)(2) 	 	11.04; 11.05
	 	(c)(3) 	 	N.A.
	 	(d) 	 	N.A.
	 	(e) 	 	11.05
	 	(f) 	 	N.A.
	315	(a) 	 	7.01; 7.02
	 	(b) 	 	7.05; 11.02
	 	(c) 	 	7.01
	 	(d) 	 	6.05; 7.01; 7.02
	 	(e) 	 	6.11
	316	(a) (last sentence) 	 	2.09
	 	(a)(1)(A) 	 	6.05
	 	(a)(1)(B) 	 	6.04
	 	(a)(2) 	 	8.02
	 	(b) 	 	6.07
	 	(c) 	 	8.04
	317	(a)(1) 	 	6.08
	 	(a)(2) 	 	6.09
	 	(b) 	 	2.04
	318	(a) 	 	11.01






N.A. means Not Applicable





 




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




 









 










TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	1	 
	 
	 	 	 	 	 	 
	Section 1.01
	 	Definitions	 	 	1	 
	Section 1.02
	 	Incorporation by Reference of Trust Indenture Act	 	 	26	 
	Section 1.03
	 	Rules of Construction	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE 2 THE NOTES	 	 	27	 
	 
	 	 	 	 	 	 
	Section 2.01
	 	Form and Dating	 	 	27	 
	Section 2.02
	 	Execution and Authentication	 	 	27	 
	Section 2.03
	 	Registrar and Paying Agent	 	 	28	 
	Section 2.04
	 	Paying Agent To Hold Assets in Trust	 	 	28	 
	Section 2.05
	 	Noteholder Lists	 	 	29	 
	Section 2.06
	 	Transfer and Exchange	 	 	29	 
	Section 2.07
	 	Replacement Notes	 	 	29	 
	Section 2.08
	 	Outstanding Notes	 	 	30	 
	Section 2.09
	 	Treasury Notes	 	 	30	 
	Section 2.10
	 	Temporary Notes	 	 	30	 
	Section 2.11
	 	Cancellation	 	 	30	 
	Section 2.12
	 	Defaulted Interest	 	 	31	 
	Section 2.13
	 	Deposit of Moneys	 	 	31	 
	Section 2.14
	 	CUSIP Number	 	 	31	 
	Section 2.15
	 	Book-Entry Provisions for Global Notes	 	 	32	 
	Section 2.16
	 	Registration of Transfers and Exchanges	 	 	32	 
	Section 2.17
	 	Restrictive Legends	 	 	36	 
	 
	 	 	 	 	 	 
	ARTICLE 3 REDEMPTION	 	 	38	 
	 
	 	 	 	 	 	 
	Section 3.01
	 	Notices to Trustee	 	 	38	 
	Section 3.02
	 	Selection of Notes to be Redeemed	 	 	38	 
	Section 3.03
	 	Notice of Redemption	 	 	38	 
	Section 3.04
	 	Effect of Notice of Redemption	 	 	39	 
	Section 3.05
	 	Deposit of Redemption Price	 	 	39	 
	Section 3.06
	 	Notes Redeemed in Part	 	 	40	 
	 
	 	 	 	 	 	 
	ARTICLE 4 COVENANTS	 	 	40	 
	 
	 	 	 	 	 	 
	Section 4.01
	 	Payment of Notes	 	 	40	 
	Section 4.02
	 	Reports to Holders	 	 	40	 
	Section 4.03
	 	Waiver of Stay, Extension or Usury Laws	 	 	41	 
	Section 4.04
	 	Compliance Certificate; Notice of Default; Tax Information	 	 	41	 
	Section 4.05
	 	Payment of Taxes and Other Claims	 	 	42	 
	Section 4.06
	 	Corporate Existence	 	 	42	 
	Section 4.07
	 	Maintenance of Office or Agency	 	 	43	 
	Section 4.08
	 	Compliance with Laws	 	 	43	 
	Section 4.09
	 	Maintenance of Properties and Insurance	 	 	43	 
	Section 4.10
	 	Limitations on Additional Indebtedness	 	 	44	 
	Section 4.11
	 	Limitations on Restricted Payments	 	 	46	 
	Section 4.12
	 	Limitations on Asset Sales	 	 	48	 
	Section 4.13
	 	Limitations on Transactions with Affiliates	 	 	51	 






- i -









 






Table of Contents

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 4.14
	 	Limitation on
Liens                                              	 	 	53	 
	Section 4.15
	 	Change of Control	 	 	53	 
	Section 4.16
	 	Limitations on Dividend and Other Restrictions Affecting Restricted Subsidiaries	 	 	55	 
	Section 4.17
	 	[RESERVED]	 	 	56	 
	Section 4.18
	 	Conduct of Business	 	 	56	 
	Section 4.19
	 	Limitations on Designation of Unrestricted Subsidiaries	 	 	56	 
	Section 4.20
	 	Additional Note Guarantees	 	 	57	 
	Section 4.21
	 	Limitations on Layering Indebtedness	 	 	58	 
	Section 4.22
	 	Covenant Suspension	 	 	58	 
	 
	 	 	 	 	 	 
	ARTICLE 5 SUCCESSOR CORPORATION	 	 	59	 
	 
	 	 	 	 	 	 
	Section 5.01
	 	Limitations on Mergers, Consolidations, Etc.	 	 	59	 
	Section 5.02
	 	Successor Person Substituted	 	 	60	 
	 
	 	 	 	 	 	 
	ARTICLE 6 DEFAULTS AND REMEDIES	 	 	61	 
	 
	 	 	 	 	 	 
	Section 6.01
	 	Events of Default	 	 	61	 
	Section 6.02
	 	Acceleration	 	 	62	 
	Section 6.03
	 	Other Remedies	 	 	63	 
	Section 6.04
	 	Waiver of Past Defaults and Events of Default	 	 	63	 
	Section 6.05
	 	Control by Majority	 	 	64	 
	Section 6.06
	 	Limitation on Suits	 	 	64	 
	Section 6.07
	 	Rights of Holders To Receive Payment	 	 	65	 
	Section 6.08
	 	Collection Suit by Trustee	 	 	65	 
	Section 6.09
	 	Trustee May File Proofs of Claim	 	 	65	 
	Section 6.10
	 	Priorities	 	 	65	 
	Section 6.11
	 	Undertaking for Costs	 	 	66	 
	 
	 	 	 	 	 	 
	ARTICLE 7 TRUSTEE	 	 	66	 
	 
	 	 	 	 	 	 
	Section 7.01
	 	Duties of Trustee	 	 	66	 
	Section 7.02
	 	Rights of Trustee	 	 	67	 
	Section 7.03
	 	Individual Rights of Trustee	 	 	69	 
	Section 7.04
	 	Trustee’s Disclaimer	 	 	69	 
	Section 7.05
	 	Notice of Defaults	 	 	69	 
	Section 7.06
	 	Reports by Trustee to Holders	 	 	69	 
	Section 7.07
	 	Compensation and Indemnity	 	 	70	 
	Section 7.08
	 	Replacement of Trustee	 	 	70	 
	Section 7.09
	 	Successor Trustee by Consolidation, Merger or Conversion	 	 	71	 
	Section 7.10
	 	Eligibility; Disqualification	 	 	71	 
	Section 7.11
	 	Preferential Collection of Claims Against the Issuer	 	 	72	 
	 
	 	 	 	 	 	 
	ARTICLE 8 AMENDMENTS, SUPPLEMENTS AND WAIVERS	 	 	72	 
	 
	 	 	 	 	 	 
	Section 8.01
	 	Without Consent of Holders	 	 	72	 
	Section 8.02
	 	With Consent of Holders	 	 	73	 
	Section 8.03
	 	Compliance with TIA	 	 	74	 
	Section 8.04
	 	Revocation and Effect of Consents	 	 	74	 
	Section 8.05
	 	Notation on or Exchange of Notes	 	 	74	 
	Section 8.06
	 	Trustee To Sign Amendments, etc.	 	 	74	 






- ii -









 






Table of Contents

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 9 DISCHARGE OF INDENTURE; DEFEASANCE	 	 	75	 
	 
	 	 	 	 	 	 
	Section 9.01
	 	Satisfaction and Discharge of Indenture	 	 	75	 
	Section 9.02
	 	Legal Defeasance	 	 	75	 
	Section 9.03
	 	Covenant Defeasance	 	 	76	 
	Section 9.04
	 	Conditions to Legal Defeasance or Covenant Defeasance	 	 	77	 
	Section 9.05
	 	Application of Trust Money	 	 	78	 
	Section 9.06
	 	Repayment to the Issuer	 	 	78	 
	Section 9.07
	 	Reinstatement	 	 	79	 
	 
	 	 	 	 	 	 
	ARTICLE 10 GUARANTEES	 	 	79	 
	 
	 	 	 	 	 	 
	Section 10.01
	 	Unconditional Guarantee	 	 	80	 
	Section 10.02
	 	Severability	 	 	79	 
	Section 10.03
	 	Limitation on Guarantor’s Liability	 	 	80	 
	Section 10.04
	 	Successors and Assigns	 	 	81	 
	Section 10.05
	 	No Waiver	 	 	81	 
	Section 10.06
	 	Release of Guarantor	 	 	81	 
	Section 10.07
	 	Execution of Supplemental Indenture for Future Guarantors	 	 	82	 
	Section 10.08
	 	Notation of Note Guarantee	 	 	82	 
	Section 10.09
	 	Subordination of Subrogation and Other Rights	 	 	82	 
	 
	 	 	 	 	 	 
	ARTICLE 11 MISCELLANEOUS	 	 	83	 
	 
	 	 	 	 	 	 
	Section 11.01
	 	TIA Controls	 	 	83	 
	Section 11.02
	 	Notices	 	 	83	 
	Section 11.03
	 	Communications by Holders with Other Holders	 	 	84	 
	Section 11.04
	 	Certificate and Opinion as to Conditions Precedent	 	 	84	 
	Section 11.05
	 	Statements Required in Certificate and Opinion	 	 	84	 
	Section 11.06
	 	Rules by Trustee and Agents	 	 	85	 
	Section 11.07
	 	Legal Holidays	 	 	85	 
	Section 11.08
	 	Governing Law	 	 	85	 
	Section 11.09
	 	No Adverse Interpretation of Other Agreements	 	 	85	 
	Section 11.10
	 	No Recourse Against Others	 	 	85	 
	Section 11.11
	 	Successors	 	 	85	 
	Section 11.12
	 	Consent to Jurisdiction; Waiver of Immunities	 	 	85	 
	Section 11.13
	 	Multiple Counterparts	 	 	86	 
	Section 11.14
	 	Table of Contents, Headings, etc.	 	 	86	 
	Section 11.15
	 	Separability	 	 	86	 
	 
	 	 	 	 	 	 
	Signatures
	 	 	 	 	S-1	 
	 
	 	 	 	 	 	 
	EXHIBITS
	 	 	 	 	 	 
	Exhibit A
	 	Form of Series A Note	 	 	A-1	 
	Exhibit B
	 	Form of Series B Note	 	 	B-2	 






- iii -









 






Table of Contents

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page
	Exhibit C
	 	Form of Certificate to Be Delivered in Connection with Transfers to Non-QIB Accredited Investors	 	 	C-1	 
	Exhibit D
	 	Form of Transferee Letter of Representation	 	 	D-1	 
	Exhibit E
	 	Form of Certificate to Be Delivered in Connection with Regulation S Transfers	 	 	E-1	 
	Exhibit F
	 	Form of Supplemental Indenture	 	 	F-1	 







- iv -











 





          INDENTURE, dated as of February 15, 2011, among Basic Energy Services, Inc., a Delaware
corporation (the “Issuer”), each of the Guarantors (as defined herein) and Wells Fargo
Bank, N.A., a national banking association, as trustee (the “Trustee”).



          The Issuer has duly authorized the creation of an issue of 73/4% Senior Notes due 2019, Series A
(the “Initial Notes”) and 73/4% Senior Notes due 2019, Series B (the “Exchange
Notes”) and, to provide therefor, the Issuer and each Guarantor has duly authorized the
execution and delivery of this Indenture. All things necessary to make the Notes, when duly issued
and executed by the Issuer, and authenticated and delivered hereunder, the valid obligations of the
Issuer, and to make this Indenture a valid and binding agreement of the Issuer and the Guarantors,
have been done.



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



ARTICLE 1




DEFINITIONS AND INCORPORATION BY REFERENCE


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




          “acceleration declaration” has the meaning given to such term in Section 6.02.



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



          “Additional Notes” has the meaning given to such term in Section 2.02.



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



          “Affiliate Transaction” has the meaning given to such term in Section 4.13(a).



 









 





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



          “Agent Members” has the meaning given to such term in Section 2.15(a).



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



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



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



          (2) the excess, if any, of:




     (a) the present value at such Redemption Date of (i) the Redemption Price
of such Note at February 15, 2015 (such Redemption Price being set forth in the
table appearing in paragraph 5 of such Note) plus (ii) all required interest
payments (excluding accrued and unpaid interest to such Redemption Date) due on such
Note through February 15, 2015, computed using a discount rate equal to the Treasury
Rate as of such Redemption Date plus 50 basis points; over




          (b) the principal amount of such Note.



          “asset” means any asset or property.



          “Asset Acquisition” means




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




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



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



          (1) transfers of cash or Cash Equivalents;




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



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



2









 






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




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




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




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




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




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



          “Authenticating Agent” has the meaning given to such term in Section 2.02.



          “Bankruptcy Code” has the meaning given to such term in Section 9.04.



          “Bankruptcy Law” has the meaning given to such term in Section 6.01.



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



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



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



3









 





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



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



          “Cash Equivalents” means:




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




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




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




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




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




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



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



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



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




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



4









 






     (2) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes
of this clause that person or group shall be deemed to have “beneficial ownership” of all
securities that any such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or indirectly, of
Voting Stock representing 50% or more of the voting power of the total outstanding Voting
Stock of the Issuer; provided, however, that such event shall not be deemed to be a Change
of Control so long as the Permitted Holders own Voting Stock representing in the aggregate a
greater percentage of the total voting power of the Voting Stock of the Issuer than such
other person or group;




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



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



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



          “Change of Control Payment Date” has the meaning given to such term in Section
4.15(b)(2).



          “Change of Control Purchase Price” has the meaning given to such term in Section
4.15(a).



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



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



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



          (1) Consolidated Net Income, plus




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



5









 






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




          (a) Consolidated Income Tax Expense,




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




          (c) Consolidated Depreciation Expense,




          (d) Consolidated Interest Expense, and




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



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




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



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



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



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




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




     (2) any Asset Sale or Asset Acquisition (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of the Issuer or
any Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary as a
result of such Asset Acquisition) incurring Acquired Indebtedness and also including any
Consolidated Cash Flow (including any pro forma expense and cost reductions calculated in
good faith on a



6









 






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



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




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




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




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



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



          (1) imputed interest on Capitalized Lease Obligations,




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



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




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



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



          (6) all other non-cash interest expense,



          (7) capitalized interest,



7









 






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



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




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



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




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




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




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




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




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




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



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



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



8









 






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



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



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



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



          “Contingent Obligation” shall mean, as to any Person, any obligation, agreement,
understanding or arrangement of such Person guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other obligations (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security therefor; (b) to
advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor; (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; (d) with respect to bankers’
acceptances and letters of credit, until a reimbursement obligation arises (which obligation shall
constitute Indebtedness); or (e) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term “Contingent
Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary
course of business or any product warranties for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such Contingent
Obligation is made (or, if less, the maximum amount of such primary obligation for which such
Person may be liable, whether severally or jointly, pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to perform thereunder)
as determined by such Person in good faith.



          “Corporate Trust Office” means the office of the Trustee at which at any particular
time its corporate trust business in relation to this Indenture shall be principally administered,
which office at the date of execution of this Indenture is located at 201 Main Street, Suite 301,
Fort Worth, Texas 76102, or such other address as the Trustee may designate from time to time by
notice to the Holders and the



9









 




Issuer, or the principal corporate trust office of any successor Trustee (or such other
address as such successor Trustee may designate from time to time by notice to the Holders and the
Issuer).




          “Covenant Defeasance” has the meaning given to such term in Section 9.03(b).



          “Coverage Ratio Exception” has the meaning set forth in the [first] proviso in Section
4.10(a).



          “Credit Agreement” means the Credit Agreement to be dated as of the Issue Date, by and
among the Issuer, as Borrower, the subsidiary guarantors party thereto, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Capital One, National Association, as joint lead arrangers, and the
other lenders named therein, including any notes, guarantees, collateral and security documents,
instruments and agreements executed in connection therewith (including Hedging Obligations related
to the Indebtedness incurred thereunder), and in each case as further amended or refinanced from
time to time.



          “Credit Facilities” means one or more debt facilities (which may be outstanding at the
same time and including, without limitation, the Credit Agreement) providing for revolving credit
loans, term loans or letters of credit and, in each case, as such agreements may be amended,
refinanced or otherwise restructured, in whole or in part from time to time (including increasing
the amount of available borrowings thereunder or adding Subsidiaries of the Issuer as additional
borrowers or guarantors thereunder) with respect to all or any portion of the Indebtedness under
such agreement or agreements or any successor or replacement agreement or agreements and whether by
the same or any other agent, lender or group of lenders.



          “Custodian” has the meaning given to such term in Section 6.01.



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



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



          “Designation” has the meaning given to such term in Section 4.19(a).



          “Designation Amount” has the meaning given to such term in Section 4.19(a)(2).



          “Disqualified Equity Interests” of any Person means any class of Equity Interests of
such Person that, by its terms, or by the terms of any related agreement or of any security into
which it is convertible, puttable or exchangeable (in each case, at the option of the holder
thereof), is, or upon the happening of any event or the passage of time would be, required to be
redeemed by such Person, at the option of the holder thereof, or matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to
the date which is 91 days after the final maturity date of the Notes; provided, however, that any
class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in
full its obligations with respect to the payment of dividends or upon maturity, redemption
(pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of
Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable
or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be
Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto
solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided,
further, however, that any Equity Interests that would not constitute Disqualified Equity Interests
but for provisions thereof



10









 




giving holders thereof (or the holders of any security into or for which such Equity Interests
are convertible, exchangeable or exercisable) the right to require the Issuer to repurchase or
redeem such Equity Interests upon the occurrence of a change in control or an asset sale occurring
prior to the 91st day after the final maturity date of the Notes shall not constitute Disqualified
Equity Interests if the change of control or asset sale provisions applicable to such Equity
Interests are no more favorable to such holders than the provisions of Section 4.12 and Section
4.15, respectively, and such Equity Interests specifically provide that the Issuer will not
repurchase or redeem any such Equity Interests pursuant to such provisions prior to the Issuer’s
purchase of the Notes as required pursuant to the provisions of Section 4.12 and Section 4.15,
respectively.




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



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



          “EDGAR” has the meaning given to such term in Section 4.02.



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



          “Event of Default” has the meaning given to such term in Section 6.01.



          “Excess Proceeds” has the meaning given to such term in Section 4.12(f).



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



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



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



          “fiscal year” means the twelve-month period ending each December 31, or such other
period fixed in accordance with this Indenture.



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



          “Future Guarantor” has the meaning given to such term in Section 10.03(b)(1).



11









 





          “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant segment of the
accounting profession of the United States, as in effect from time to time.



          “Global Notes” has the meaning given to such term in Section 2.01.



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



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



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



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



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



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




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




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




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



12









 






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




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



          (6) all Capitalized Lease Obligations of such Person;




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




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




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




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




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



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



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



          “Independent Director” means a director of the Issuer who



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




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




     (3) has not and whose Affiliates or affiliated firm has not, at any time during the
twelve months prior to the taking of any action hereunder, directly or indirectly, received,
or



13









 






entered into any understanding or agreement to receive, any compensation, payment or
other benefit, of any type or form, from the Issuer or any of its Affiliates, other than
customary directors’ fees for serving on the Board of Directors of the Issuer or any
Affiliate and reimbursement of out-of-pocket expenses for attendance at the Issuer’s or
Affiliate’s board and board committee meetings.



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



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



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



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



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



          “Investment Grade Rating” has the meaning given to such term in Section 4.22.



          “Investments” of any Person means:




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




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




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



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



          Except as otherwise expressly specified in this definition, the amount of any Investment
(other than an Investment made in cash) shall be the Fair Market Value thereof on the date such
Investment is made. The amount of Investment pursuant to clause (4) shall be the Designation
Amount determined in accordance with Section 4.19. If the Issuer or any Restricted Subsidiary
sells or otherwise disposes of any Equity Interests of any Restricted Subsidiary, or any Restricted
Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such
sale or disposition, such Person is no longer a Subsidiary, the Issuer shall be deemed to have made
an Investment on the date of any such sale or other disposition equal to the Fair Market Value of
the Equity Interests of and all other



14









 




Investments in such Restricted Subsidiary retained. Notwithstanding the foregoing, purchases
or redemptions of Equity Interests of the Issuer shall be deemed not to be Investments.




          “Issue Date” means the date of original issuance of the Initial Notes.



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



          “Legal Defeasance” has the meaning given to such term in Section 9.02(b).



          “Legal Holiday” has the meaning given to such term in Section 11.07.



          “Lender” means any lender under any Credit Facility.



          “Lien” means, with respect to any asset, any mortgage, deed of trust, lien (statutory
or other), pledge, lease, easement, restriction, covenant, charge, security interest or other
encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law, including any conditional sale or other title retention
agreement.



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



          “Maturity Date” means February 15, 2019.



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



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




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




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




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




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




     (5) appropriate amounts to be provided by the Issuer or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any adjustment in
the sale price of such asset or assets or liabilities associated with such Asset Sale and
retained by the Issuer or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including pensions and other postemployment benefit liabilities, liabilities related
to environmental matters and liabilities under any indemnification obligations associated
with such Asset Sale, all as reflected in an Officers’ Certificate delivered to the Trustee;
provided, however, that any amounts remaining after adjustments, revaluations or
liquidations of such reserves shall constitute Net Available Proceeds.



15









 





          “Net Proceeds Deficiency” has the meaning given to such term in Section 4.12(h).



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



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




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




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



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



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



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



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



          “Offered Price” has the meaning given to such term in Section 4.12(g)(2).



          “Offering” means the offering of $275 million aggregate principal amount of Initial
Notes by the Issuer pursuant to the Offering Memorandum.



          “Offering Memorandum” means the Final Offering Memorandum dated February 3, 2011
relating to the offering of $275 million of Notes.



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



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



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



          “Other Guarantor” has the meaning given to such term in Section 10.03(a)(2).



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



16









 





          “Pari Passu Indebtedness Price” has the meaning given to such term in Section
4.12(g)(2).



          “Paying Agent” has the meaning given to such term in Section 2.03.



          “Payment Amount” has the meaning given to such term in Section 4.12(g)(1).



          “payment default” has the meaning given to such term in Section 6.01(e).



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



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



          “Permitted Indebtedness” has the meaning given to such term in Section 4.10(b).



          “Permitted Investment” means:




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



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




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




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



          (5) Investments in cash and Cash Equivalents;




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




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




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



17









 





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




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




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




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



          (13) Investments existing on the Issue Date;



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




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




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



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




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



          “Permitted Liens” means the following types of Liens:




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




     (2) Liens in respect of property of the Issuer or any Restricted Subsidiary imposed
by law, which were not incurred or created to secure Indebtedness for borrowed money, such
as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’, repairmen’s
and mechanics’ Liens and other similar Liens arising in the ordinary course of business, and
which do



18









 






not in the aggregate materially detract from the value of the property of the Issuer or
its Restricted Subsidiaries, taken as a whole, and do not materially impair the use thereof
in the operation of the business of the Issuer and its Restricted Subsidiaries, taken as a
whole;




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




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




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




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




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




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




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




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



19









 






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



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




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




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



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




     (16) Liens securing Indebtedness under the Credit Facilities incurred and then
outstanding pursuant to sub-clause (1) of clause (b) of Section 4.10;




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




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




     (19) Liens on property of a Person existing at the time such Person is acquired or
merged with or into or consolidated with the Issuer or any Restricted Subsidiary (and not
created in anticipation or contemplation thereof); provided that such Liens do not extend to
property not subject to such Liens at the time of acquisition (other than improvements
thereon) and are no more favorable to the lienholders than the existing Lien;




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




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




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



20









 






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




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




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




     (26) other Liens with respect to obligations that do not in the aggregate exceed
the greater of (a) $15.0 million or (b) 3.0% of the Issuer’s Consolidated Tangible Assets at
any time outstanding.



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



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



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



          “principal” means, with respect to the Notes, the principal of, and premium, if any,
on the Notes.



          “Private Placement Legend” has the meaning given to such term in Section 2.17.



          “Purchase Money Indebtedness” means Indebtedness, including Capitalized Lease
Obligations, of the Issuer or any Restricted Subsidiary incurred for the purpose of financing all
or any part of the purchase price of property, plant or equipment used in the business of the
Issuer or any Restricted Subsidiary or the cost of installation, construction or improvement
thereof; provided, however, that (except in the case of Capitalized Lease Obligations) (1) the
amount of such Indebtedness shall not exceed such purchase price or cost and (2) such Indebtedness
shall be incurred within 90 days after such acquisition of such asset by the Issuer or such
Restricted Subsidiary or such installation, construction or improvement.



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



21









 





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



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



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



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



          “Record Date” for interest payable on any Interest Payment Date (except a date for
payment of default interest) means the February 1 and August 1 (whether or not a Business Day) as
the case may be, immediately preceding such Interest Payment Date.



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



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



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



          “refinance” means to refinance, repay, prepay, replace, renew or refund.



          “Refinancing Indebtedness” means Indebtedness of the Issuer or a Restricted Subsidiary
incurred in exchange for, or the proceeds of which are used to redeem, refinance, replace, defease,
discharge, refund or otherwise retire for value, in whole or in part, any Indebtedness of the
Issuer or any Restricted Subsidiary (the “Refinanced Indebtedness”); provided that:




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




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




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



22









 






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




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




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



          “Registrar” has the meaning given to such term in Section 2.03.



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



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



          “Regulation S Global Note” has the meaning given to such term in Section 2.01.



          “Resale Restriction Termination Date” has the meaning given to such term in Section
2.16(a).



          “Restricted Payment” means any of the following:




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




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



23









 





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




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



          “Restricted Payments Basket” has the meaning given to such term in Section 4.11(a)(3).



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



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



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



          “Rule 144A Global Note” has the meaning given to such term in Section 2.01.



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



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



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



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



          “Subordinated Indebtedness” means Indebtedness of the Issuer or any Restricted
Subsidiary that is expressly subordinated in right of payment to the Notes or the Note Guarantees,
respectively.



          “Subsidiary” means, with respect to any Person:




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




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



24









 





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



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



          “Successor” has the meaning given to such term in Section 5.01(a)(1).



          “Suspended Covenants” has the meaning given to such term in Section 4.22.



          “Treasury Rate” means, as of any Redemption Date, the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519) which has become
publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical
Release is no longer published, any publicly available source of similar market data)) most nearly
equal to the period from the Redemption Date to February 15, 2015; provided, however, that if the
period from the Redemption Date to February 15, 2015 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 the Redemption Date to February 15, 2015 is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to a constant maturity
of one year shall be used. The Issuer will (1) calculate the Treasury Rate on the third business
day preceding the applicable Redemption Date and (2) prior to such Redemption Date file with the
Trustee an officer’s certificate setting forth the Applicable Premium and the Treasury Rate and
showing the calculation of each in reasonable detail.



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



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



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



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



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



          “U.S. Guarantor” has the meaning given to such term in Section 10.03(a)(1).



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



25









 





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


Section 1.02 Incorporation by Reference of Trust Indenture Act.




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



          “indenture securities” means the Notes.



          “indenture securityholder” means a Holder.



          “indenture to be qualified” means this Indenture.



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



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



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


Section 1.03 Rules of Construction.




          Unless the context otherwise requires:



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



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



          (c) “or” is not exclusive;



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



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



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



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



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ARTICLE 2




THE NOTES


Section 2.01 Form and Dating.




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



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



          The Notes shall be issued initially in the form of two or more permanent global Notes (the
“Global Notes”). Notes offered and sold (i) in reliance on Rule 144A shall be issued
initially in the form of one or more permanent Global Notes in registered form, substantially in
the form set forth in Exhibit A (the “Rule 144A Global Note”) and (ii) in offshore
transactions in reliance on Regulation S shall be issued initially in the form of one or more
permanent global Notes in registered form, substantially in the form set forth in Exhibit A
(the “Regulation S Global Note”), and in each case shall be deposited with the Trustee, as
custodian for the Depository, duly executed by the Issuer and authenticated by the Trustee as
hereinafter provided. Notes transferred to Institutional Accredited Investors may be represented
by a permanent Global Note in registered form, substantially in the form set forth in Exhibit
A, and if so represented shall be deposited with the Trustee, as custodian for the Depository,
duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of any Global Note may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as hereinafter provided.


Section 2.02 Execution and Authentication.




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



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



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



          The Trustee or an authentication agent (the “Authenticating Agent”) shall authenticate
(i) Initial Notes for original issue on the date of this Indenture in an aggregate principal amount
equal to $275,000,000, (ii) additional Notes (“Additional Notes”) for original issue
following the date of this Indenture in unlimited aggregate principal amount (so long as permitted
by the terms of this Indenture, including, without limitation, Section 4.10 hereof) upon a written
order of the Issuer executed by an Officer, and (iii) Exchange Notes from time to time for issue
only in exchange for a like principal amount of Initial Notes or Additional Notes, as the case may
be, in each case upon written orders of the Issuer in



27









 




the form of an Officers’ Certificate. Such written orders shall specify the amount of Notes
to be authenticated, the date on which the Notes are to be authenticated and the aggregate
principal amount of Notes outstanding on the date of authentication, whether the Notes are to be
Initial Notes, Additional Notes or Exchange Notes, and shall further specify the amount of such
Notes to be issued as a Global Note or Certificated Notes. The aggregate principal amount of Notes
outstanding at any time may not exceed such amount except as provided in Section 2.07 hereof.




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



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



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


Section 2.03 Registrar and Paying Agent.




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



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


Section 2.04 Paying Agent To Hold Assets in Trust.




          The Issuer shall require each Paying Agent other than the Trustee to agree in writing that
each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all assets held
by the Paying Agent for the payment of principal of, premium, if any, or interest on Notes (whether
such assets have been distributed to it by the Issuer or any other obligor on the Notes), and shall
notify the Trustee in writing of any Default in making any such payment. The Issuer at any time
may require a Paying Agent to distribute all assets held by it to the Trustee and account for any
assets disbursed and the Trustee may at any time during the continuance of any payment default,
upon written request to a Paying Agent, require such Paying Agent to forthwith distribute to the
Trustee all assets so held in trust by such Paying Agent together with a complete accounting of
such sums. Upon distribution to the Trustee of all assets



28









 




that shall have been delivered by the Issuer to the Paying Agent, the Paying Agent shall have
no further liability for such assets.



Section 2.05 Noteholder Lists.




          The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders. If the Trustee is not the Registrar,
the Issuer shall furnish or cause the Registrar to furnish to the Trustee on or before each
February 1 and August 1 in each year, and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably require of the names
and addresses of Holders which list may be conclusively relied on by the Trustee.


Section 2.06 Transfer and Exchange.




          Subject to the provisions of Sections 2.15 and 2.16 hereof, when Notes are presented to the
Registrar or a co-Registrar with a request to register the transfer of such Notes or to exchange
such Notes for an equal principal amount of Notes of other authorized denominations of the same
series, the Registrar or co-Registrar shall register the transfer or make the exchange as requested
if its requirements for such transaction are met; provided, however, that the Notes presented or
surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfer and exchanges, the Issuer shall execute and the Trustee shall
authenticate Notes at the Registrar’s or co-Registrar’s request. No service charge shall be made
for any registration of transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge in connection therewith payable
by the transferor of such Notes (other than any such transfer taxes or similar governmental charge
payable upon exchanges or transfers pursuant to Section 2.10, 3.06, 4.12, 4.15 or 8.05 hereof, in
which event the Issuer shall be responsible for the payment of such taxes).



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



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


Section 2.07 Replacement Notes.




          If a mutilated Note is surrendered to the Trustee or if the Holder presents evidence to the
satisfaction of the Issuer and the Trustee that the Note has been lost, destroyed or wrongfully
taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note. An indemnity
or a security bond may be required by the Issuer or the Trustee that is sufficient in the judgment
of the Issuer and the Trustee to protect the Issuer, the Trustee or any Agent from any loss which
any of them may suffer if a Note is replaced. In every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and to the Trustee evidence to their satisfaction of the
destruction, loss or the theft of such Note and the ownership thereof. Each of the Issuer and the
Trustee may charge for its expenses in replacing a Note. In the event



29









 




any such mutilated, lost, destroyed or wrongfully taken Note has become due and payable, the
Issuer in its discretion may pay such Note instead of issuing a new Note in replacement thereof.
The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to replacement or payment of mutilated, lost, destroyed or
wrongfully taken Notes.




          Every replacement Note is an additional obligation of the Issuer.


Section 2.08 Outstanding Notes.




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



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



          If by 11:00 a.m., New York City time, on a Redemption Date or the Maturity Date, the Paying
Agent holds U.S. legal tender sufficient to pay all of the principal and interest due on the Notes
payable on that date, then on and after that date such Notes cease to be outstanding and interest
on them ceases to accrue.


Section 2.09 Treasury Notes.




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


Section 2.10 Temporary Notes.




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


Section 2.11 Cancellation.




          The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and
the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or
the Paying Agent, and no one else, shall cancel and, at the written direction of the Issuer,
dispose of and deliver



30









 




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



Section 2.12 Defaulted Interest.




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



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



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


Section 2.13 Deposit of Moneys.




          No later than 11:00 a.m., New York City time, on each Interest Payment Date, Redemption Date,
Change of Control Payment Date, Offer Payment Date and Maturity Date, the Issuer shall have
deposited with the Paying Agent in immediately available funds U.S. legal tender sufficient to make
payments, if any, due on such Interest Payment Date, Redemption Date, Change of Control Payment
Date, Offer Payment Date or Maturity Date, as the case may be, in a timely manner which permits the
Trustee to remit payment to the Holders on such Interest Payment Date, Redemption Date, Change of
Control Payment Date, Offer Payment Date or Maturity Date, as the case may be. The principal and
interest on Global Notes shall be payable to the Depository or its nominee, as the case may be, as
the sole registered owner and the sole Holder of the Global Notes represented thereby. The
principal and interest on Notes in certificated form shall be payable in the manner indicated in
paragraph 2 of the Notes.


Section 2.14 CUSIP Number.




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



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Section 2.15 Book-Entry Provisions for Global Notes.




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



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



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



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



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



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


Section 2.16 Registration of Transfers and Exchanges.




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




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




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



32









 




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





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




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




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




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




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




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




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




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



          (b) Restrictions on Transfer of a Certificated Note for a Beneficial Interest in a
Global Note. A Certificated Note may not be exchanged for a beneficial interest in a Global
Note except upon satisfaction of the requirements set forth below. Upon receipt by the Registrar
or co-Registrar of a Certificated Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:



33









 






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




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


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




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



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




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



34









 






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




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




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




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




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


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





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



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



          (f) Private Placement Legend. Upon the transfer, exchange or replacement of Notes
not bearing the Private Placement Legend, the Registrar or co-Registrar shall deliver Notes that do
not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Notes bearing
the Private Placement Legend, the Registrar or co-Registrar shall deliver only Notes that bear the
Private Placement Legend unless, and the Trustee is hereby authorized to deliver Notes without the
Private Placement Legend if, (i) the Resale Restriction Termination Date shall have occurred, (ii)
there is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Issuer and
the Trustee to the



35









 




effect that neither such legend nor the related restrictions on transfer are required in order
to maintain compliance with the provisions of the Securities Act, (iii) such Note has been sold
pursuant to an effective registration statement under the Securities Act or (iv) such Note is an
Exchange Note.




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



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



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



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


Section 2.17 Restrictive Legends.




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




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




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




     (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO THE ISSUER OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY



36









 






BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES
ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE), (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER), OR
(G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IF SUCH TRANSFER IS PURSUANT
TO THE PRECEDING CLAUSE (D), (E) OR (F) AND THE ISSUER SO REQUESTS, AN OPINION OF
COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER COMPLIES WITH THE SECURITIES
ACT; AND




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




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



          Each Global Note shall also bear the following legend:




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




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



37









 






OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.



ARTICLE 3




REDEMPTION


Section 3.01 Notices to Trustee.




          If the Issuer elects to redeem Notes pursuant to paragraph 5 of the Notes, at least 45 days
prior to the Redemption Date or during such other period as the Trustee may agree to, the Issuer
shall notify the Trustee in writing of the Redemption Date, the principal amount of Notes to be
redeemed and the Redemption Price, if determined at the time of delivery of such notice or
otherwise the method for its computation, and deliver to the Trustee an Officers’ Certificate
stating that such redemption will comply with the conditions contained herein and in the Notes, as
appropriate.


Section 3.02 Selection of Notes to be Redeemed.




          In the event that less than all of the Notes are to be redeemed at any time, selection of the
Notes to be redeemed shall be made by the Trustee in compliance with the requirements of the
principal national securities exchange, if any, on which such Notes are listed or, if such Notes
are not then listed on a national security exchange, on a pro rata basis (or in case of Global
Notes, on as nearly a pro rata basis as is practicable, subject to the procedures of DTC or any
other depository), by lot or by such method as the Trustee shall deem fair and appropriate;
provided, however, that no Notes of a principal amount of $2,000 or less shall be redeemed in part;
provided, further, that if a partial redemption is made with the proceeds of any Qualified Equity
Offering, selection of the Notes or portions thereof for redemption shall be made by the Trustee
only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to the
procedures of the Depository), unless such method is otherwise prohibited. A new Note in a
principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon delivery of the original Note to the Paying Agent and cancellation of the original
Note. On and after the Redemption Date, interest will cease to accrue on Notes or portions thereof
called for redemption as long as the Issuer has deposited with the Paying Agents funds in U.S.
legal tender in satisfaction of the applicable Redemption Price and amount of accrued interest, if
any, payable pursuant to this Indenture.


Section 3.03 Notice of Redemption.




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



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



38









 






     (1) the Redemption Date;




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




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




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



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



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



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



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


Section 3.04 Effect of Notice of Redemption.




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


Section 3.05 Deposit of Redemption Price.




          (a) No later than 11:00 a.m., New York City time, on each Redemption Date, the Issuer
shall have deposited with the Paying Agent in immediately available funds U.S. legal tender
sufficient to pay the Redemption Price of and accrued interest on all Notes to be redeemed on that
date.



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



39









 




interest not paid on such unpaid principal, in each case, at the rate and in the manner
provided for in Section 2.12 hereof.



Section 3.06 Notes Redeemed in Part.




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



ARTICLE 4




COVENANTS


Section 4.01 Payment of Notes.




          The Issuer shall pay the principal of and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal or interest shall be
considered paid on the date it is due if by 11:00 a.m., New York City time, the Trustee or Paying
Agent holds, for the benefit of the Holders, on that date U.S. legal tender designated for and
sufficient to pay such installment in full.



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


Section 4.02 Reports to Holders.




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




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




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



          In addition, whether or not required by the Commission, the Issuer will file a copy of all of
the information and reports referred to in clauses (1) and (2) above with the Commission for public
availability within the time periods specified in the Commission’s rules and regulations (unless
the Commission will not accept the filing) and make the information available to securities
analysts and prospective investors upon request. The Issuer and the Guarantors have agreed that,
for so long as any Notes remain outstanding, the Issuer will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.



          Notwithstanding anything to the contrary, the Issuer will be deemed to have complied with its
obligations in the preceding two paragraphs following the filing of the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement) and prior to the effectiveness



40









 




thereof if the Exchange Offer Registration Statement includes the information specified in
clause (1) above at the times it would otherwise be required to file such Forms.




          For purposes of this Section 4.02, the Issuer will be deemed to have furnished the reports,
documents and information to the Trustee and Holders, and to the extent herein provided, to
prospective investors, as required by this covenant if it has filed such reports with the
Commission using the Electronic Data Gathering Analysis and Retrieval system (“EDGAR”) (or
any successor system) or if such system is not available to the Issuer, if the Issuer has filed
such reports, documents and information on the Issuer website, and in each such case, such reports
are publicly available thereon.



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



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


Section 4.03 Waiver of Stay, Extension or Usury Laws.




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


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




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



41









 





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



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



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


Section 4.05 Payment of Taxes and Other Claims.




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


Section 4.06 Corporate Existence.




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



42









 




Section 4.07 Maintenance of Office or Agency.




          The Issuer shall maintain an office or agency in the Borough of Manhattan, The City of New
York where Notes may be surrendered for registration of transfer or exchange or for presentation
for payment and where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially designates as such agency the corporate trust
office of Wells Fargo Securities, N.A., acting on behalf (for the benefit) of, the Trustee, located
at 45 Broadway, 14th Floor, New York, New York 10006. The Issuer shall give prompt written notice
to the Trustee of any change in the location, of such office or agency. If at any time the Issuer
shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be made or served at
the address of the Corporate Trust Office of the Trustee located at 201 Main Street, Suite 301,
Fort Worth, Texas 76102.



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



          The Issuer hereby initially designates the Corporate Trust Office of the Trustee located at
201 Main Street, Suite 301, Fort Worth, Texas 76102 as one such additional office.


Section 4.08 Compliance with Laws.




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


Section 4.09 Maintenance of Properties and Insurance.




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



          (b) The Issuer shall maintain, and shall cause its respective Subsidiaries to maintain,
insurance with responsible carriers against such risks and in such amounts, and with such
deductibles, retentions, self-insured amounts and co-insurance provisions, as are customarily
carried by corporations



43









 




of a similar size operating assets of a similar nature in the same or similar localities,
including property and casualty loss, workers’ compensation and interruption of business insurance.



Section 4.10 Limitations on Additional Indebtedness.




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



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




     (1) Indebtedness of the Issuer and any Guarantor under the Credit Facilities in an
aggregate amount at any time outstanding not to exceed (a) the greater of (i) $250.0 million
and (ii) 20.0% of the Issuer’s Consolidated Tangible Assets, minus (b) to the extent a
permanent repayment and/or commitment reduction is required thereunder as a result of such
application, the aggregate amount of Net Available Proceeds applied to repayments under the
Credit Facilities in accordance with Section 4.12;




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




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




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




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




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



44









 






of the Issuer or any Restricted Subsidiary, as the case may be, in order to provide
security for workers’ compensation claims;




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




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




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




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




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




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




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




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



          For purposes of determining compliance with this Section 4.10, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness
described in clauses (1) through (14) above or is entitled to be incurred pursuant to the Coverage
Ratio Exception, the Issuer shall, in its sole discretion, classify such item of Indebtedness and
may divide and classify such Indebtedness in more than one of the types of Indebtedness described,
except that Indebtedness incurred under the Credit Facilities on the Issue Date shall be deemed to
have been incurred under clause (1) above, and may later reclassify any item of Indebtedness
described in clauses (1) through (14) above (provided that at the time of reclassification it meets
the criteria in such category or categories). In addition, for purposes of determining any
particular amount of Indebtedness under this Section 4.10, guarantees, Liens or letter of credit
obligations supporting Indebtedness otherwise included in the



45









 




determination of such particular amount shall not be included so long as incurred by a Person
that could have incurred such Indebtedness.



Section 4.11 Limitations on Restricted Payments.




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




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




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




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




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




          (B) 100% of (A) (i) the aggregate net cash proceeds and (ii) the Fair Market Value of
(x) marketable securities (other than marketable securities of the Issuer), (y) Equity
Interests of a Person (other than the Issuer or an Affiliate of the Issuer) engaged in a
Permitted Business and (z) other assets used in any Permitted Business, in the case of
clauses (i) and (ii), received by the Issuer since the Issue Date as a contribution to its
common equity capital or from the issue or sale of Qualified Equity Interests of the Issuer
or from the issue or sale of convertible or exchangeable Disqualified Equity Interests or
convertible or exchangeable debt securities of the Issuer that have been converted into or
exchanged for such Qualified Equity Interests (other than Equity Interests or debt
securities sold to a Subsidiary of the Issuer), and (B) the aggregate net cash proceeds, if
any, received by the Issuer or any of its Restricted Subsidiaries upon any conversion or
exchange described in clause (A) above, plus




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




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



46









 






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



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




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




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




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




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




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



47









 






acquisitions or retirements for value of Equity Interests made in lieu
of withholding taxes in connection with any exercise or exchange of stock options, warrants
or other similar rights;




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




     (7) the payment of cash in lieu of fractional Equity Interests;




     (8) payments or distributions to dissenting stockholders pursuant to applicable law
in connection with a merger, consolidation or transfer of assets that complies with the
provisions of Article 5; or




     (9) payment of other Restricted Payments from time to time in an aggregate amount
not to exceed $15.0 million in any fiscal year;


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



Section 4.12 Limitations on Asset Sales.




          (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Sale unless:




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




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



          For purposes of clause (2), the following shall be deemed to be cash:




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




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




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



48









 





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



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



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



          (e) If the Issuer or any Restricted Subsidiary engages in an Asset Sale, the Issuer or
such Restricted Subsidiary shall, no later than 365 days following the consummation thereof, apply
all or any of the Net Available Proceeds therefrom to:




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




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




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




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



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



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



49









 






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




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




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




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



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



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



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




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




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




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




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




     (5) that such Offer shall remain open for at least 20 Business Days or for such
longer period as is required by law and that Holders accepting the offer to have their Notes
purchased pursuant to such Offer shall be required to surrender the Notes, with the form
entitled “Option of



50









 






the Holder to Elect Purchase” on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of business on
the third Business Day preceding the Offer Payment Date;




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




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




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




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



          (k) The Issuer shall publicly announce the results of a Net Proceeds Offer on or as soon
as practicable after the related Offer Payment Date.



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



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



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


Section 4.13 Limitations on Transactions with Affiliates.




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



51









 






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




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



          (b) The foregoing restrictions shall not apply to:




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




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




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




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




     (5) any Permitted Investments;




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




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




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




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



52









 




Section 4.14 Limitation on Liens.




          The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, create, incur, assume or permit or suffer to exist any Lien (other than Permitted
Liens) of any nature whatsoever against any assets of the Issuer or any Restricted Subsidiary
(including Equity Interests of a Restricted Subsidiary), whether owned at the Issue Date or
thereafter acquired, which Lien secures Indebtedness or trade payables, unless contemporaneously
therewith:




     (1) in the case of any Lien securing an obligation that ranks pari passu with the
Notes or a Note Guarantee, effective provision is made to secure the Notes or such Note
Guarantee, as the case may be, at least equally and ratably with or prior to such obligation
with a Lien on the same collateral; and




     (2) in the case of any Lien securing an obligation that is subordinated in right of
payment to the Notes or a Note Guarantee, effective provision is made to secure the Notes or
such Note Guarantee, as the case may be, with a Lien on the same collateral that is prior to
the Lien securing such subordinated obligation,


in each case, for so long as such obligation is secured by such Lien.



Section 4.15 Change of Control.




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



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




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




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




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




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




     (5) that such Change of Control Offer shall remain open for at least 20 Business
Days or for such longer period as is required by law and that Holders accepting the offer to
have their Notes purchased pursuant to a Change of Control Offer shall be required to
surrender the Notes, with the form entitled “Option of the Holder to Elect Purchase” on the
reverse of the Note



53









 






completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the Change of Control
Payment Date;




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




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




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




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



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



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



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



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



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



          (h) The Issuer’s obligation to make a Change of Control Offer shall be satisfied if a
third party makes the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Issuer and purchases all Notes properly tendered and not withdrawn under such
Change of Control Offer.



          (i) Notwithstanding anything to the contrary in this Indenture, a Change of Control Offer
may be made in advance of a Change of Control, conditional upon such Change of Control, if a



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definitive agreement is in place for the Change of Control at the time of making of the Change of
Control Offer.



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




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



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



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



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


except for:





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




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




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




     (4) encumbrances or restrictions existing under agreements existing on this date of
this Indenture (including, without limitation, the Credit Facilities) as in effect on that
date;




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




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




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




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




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



55









 






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




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




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




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


Section 4.17 [RESERVED].



Section 4.18 Conduct of Business.




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


Section 4.19 Limitations on Designation of Unrestricted Subsidiaries.




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




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




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



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




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




     (2) is not party to any agreement, contract, arrangement or understanding with the
Issuer or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement
or



56









 






understanding are no less favorable to the Issuer or the Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates;




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




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



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



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




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




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



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


Section 4.20 Additional Note Guarantees.




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




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




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



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




          (b) Notwithstanding the foregoing, if, as of the end of any fiscal quarter, the Domestic
Restricted Subsidiaries that are not required to be Guarantors pursuant to clause (a) of this
Section 4.20 collectively own net assets that have an aggregate fair market value (as determined in
good faith by the Board of Directors of the Issuer) equal to or greater than 5% of the Issuer’s
Consolidated Tangible Assets, then the Issuer shall cause one or more of such non-Guarantor
Domestic Restricted Subsidiaries promptly
to become a Guarantor or Guarantors such that after giving effect thereto, the total net
assets owned by all such remaining non-Guarantor Domestic Restricted Subsidiaries will have an
aggregate fair market value (as determined in good faith by the Board of Directors of the Issuer)
of less than 5% of the Consolidated Tangible Assets of the Issuer. Any such Domestic Restricted
Subsidiary so designated must become a Guarantor and execute a supplemental indenture and deliver
an Opinion of Counsel to the Trustee within 15 Business Days of the date on which it was
designated.


Section 4.21 Limitations on Layering Indebtedness.




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



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


Section 4.22 Covenant Suspension.




          During any period of time that the Notes have a Moody’s rating of Baa3 or higher or an S&P
rating of BBB- or higher (each, an “Investment Grade Rating”) and no Default has occurred
and is then continuing, the Issuer and the Restricted Subsidiaries will not be subject to the
following sections of this Indenture:




	 	•	 	Section 4.10;






	 	•	 	Section 4.11;






	 	•	 	Section 4.12;






	 	•	 	Section 4.13;






	 	•	 	Section 4.15;




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	 	•	 	Section 4.16;






	 	•	 	Section 4.18;






	 	•	 	Section 4.20;






	 	•	 	Section 4.21; and






	 	•	 	subclause (3) of Section 5.01(a)




(collectively, the “Suspended Covenants”). In the event that the Issuer and the Restricted
Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the
preceding sentence and, subsequently, one or both of the Rating Agencies, as applicable, withdraws
its ratings or downgrades the ratings assigned to the Notes such that the Notes do not have an
Investment Grade Rating, then the Issuer and the Restricted Subsidiaries shall thereafter again be
subject to the Suspended Covenants, it being understood that no actions taken by (or omissions of)
the Issuer or any of its Restricted Subsidiaries during the suspension period shall constitute a
Default or an Event of Default under the Suspended Covenants. Furthermore, after the time of
reinstatement of the Suspended Covenants upon such withdrawal or downgrade, calculations with
respect to Restricted Payments shall be made in accordance with the terms of Section 4.11 as though
Section 4.11 had been in effect during the entire period of time from the Issue Date.




ARTICLE 5




SUCCESSOR CORPORATION


Section 5.01 Limitations on Mergers, Consolidations, Etc.




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




     (1) either:




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




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




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



59









 






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




     (4) at the time of the transaction the Issuer or the Successor, as the case may be,
will have delivered, or caused to be delivered, to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each to the effect that such consolidation, merger, transfer, sale,
assignment, conveyance, lease or other transaction and the agreements in respect thereof
comply with the Indenture.



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



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




     (1) either:




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




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




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



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


Section 5.02 Successor Person Substituted.




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



60









 




Guarantor’s other obligations and
covenants under the Notes, this Indenture and its Note Guarantee, if applicable.




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



ARTICLE 6




DEFAULTS AND REMEDIES


Section 6.01 Events of Default.




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



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



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



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



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



          (e) default under any mortgage, indenture or other instrument or agreement under which
there may be issued or by which there may be secured or evidenced Indebtedness for borrowed money
by the Issuer or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred
after the Issue Date, which default (A) is caused by a failure to pay at final maturity principal
on such Indebtedness within the applicable express grace period and any extensions thereof (a
“payment default”), or (B) results in the acceleration of such Indebtedness prior to its
express final maturity (which acceleration is not rescinded, annulled or otherwise cured within 30
days of receipt by the Issuer or such Restricted Subsidiary of notice of any such acceleration),
and, in each case, the principal amount of such Indebtedness, together with the principal amount of
any other Indebtedness with respect to which an event described in clause (A) or (B) has occurred
and is continuing, aggregates $20.0 million or more;



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



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




          (A) commences a voluntary case,



61









 






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




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




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




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




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



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




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




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




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



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



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


Section 6.02 Acceleration.




          If an Event of Default (other than an Event of Default specified in Section 6.01(g) or (h)
with respect to the Issuer) shall have occurred and be continuing under this Indenture, the
Trustee, by written notice to the Issuer, or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding by written notice to the Issuer and the Trustee, may declare
(an “acceleration declaration”) all amounts owing under the Notes to be due and payable.
Upon such declaration of acceleration, the aggregate principal of and accrued and unpaid interest
on the outstanding Notes shall become due and payable (a) if there is no Indebtedness outstanding
under any Credit Facility at such time, immediately, and (b) if otherwise, upon the earlier of (x)
the final maturity (after giving effect to any applicable grace period or extensions thereof) or an
acceleration of any Indebtedness under any Credit Facility prior to the express final stated
maturity thereof and (y) five Business Days after the Representative under each Credit Facility
receives the acceleration declaration, but in the case of this clause (b) only, if such Event of
Default is then continuing; provided, however, that after such acceleration, but before a judgment
or decree based on acceleration, the Holders of a majority in aggregate principal amount of such
outstanding Notes may rescind and annul such acceleration if:



62









 






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




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




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




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




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


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



Section 6.03 Other Remedies.




          If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
by proceeding at law or in equity to collect the payment of principal of, or premium, if any, and
interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture
and may take any necessary action requested of it as Trustee to settle, compromise, adjust or
otherwise conclude any proceedings to which it is a party.



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


Section 6.04 Waiver of Past Defaults and Events of Default.




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



63









 





          Upon any such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this Indenture, but no such
waiver shall extend to any subsequent or other Default or Event of Default or impair any right
consequent thereto.


Section 6.05 Control by Majority.




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


Section 6.06 Limitation on Suits.




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




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




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




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




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




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



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



64









 





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


Section 6.07 Rights of Holders To Receive Payment.




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


Section 6.08 Collection Suit by Trustee.




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


Section 6.09 Trustee May File Proofs of Claim.




          The Trustee may file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to distribute the same
after deduction of its charges and expenses to the extent that any such charges and expenses are
not paid out of the estate in any such proceedings and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the
event that the Trustee shall consent to the making of such payments directly to the Holders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof.



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


Section 6.10 Priorities.




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




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



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all advances made, by the Trustee and the costs and expenses of collection;





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




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




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



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


Section 6.11 Undertaking for Costs.




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



ARTICLE 7




TRUSTEE


Section 7.01 Duties of Trustee.




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



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




     (1) The Trustee need perform only those duties as are specifically set forth in
this Indenture and no covenants or obligations shall be implied in this Indenture against
the Trustee.




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



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




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




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




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



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



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



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



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



          (h) The Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee makes such further inquiry or
investigation, it shall be entitled to examine the books, records and premises of the Issuer,
personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.



          (i) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.



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


Section 7.02 Rights of Trustee.




          Subject to Section 7.01 hereof:



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



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



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



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



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



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



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



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



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



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Section 7.03 Individual Rights of Trustee.




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


Section 7.04 Trustee’s Disclaimer.




          The Trustee shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer’s use of the
proceeds from the sale of Notes or any money paid to the Issuer pursuant to the terms of this
Indenture and it shall not be responsible for any statement of the Issuer in this Indenture or the
Notes other than the Trustee’s certificate of authentication.


Section 7.05 Notice of Defaults.




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



          Within 90 days after the occurrence of any Default or Event of Default hereunder which is
known to the Trustee, the Trustee shall transmit by mail to Holders of Notes, as their names and
addresses appear in the Registrar, a notice of the Default or Event of Default known to the
Trustee, unless such Default or Event of Default shall have been cured or waived. Except in the
case of a Default or an Event of Default in payment of principal of, premium or interest on, any
Note, including an accelerated payment and the failure to make payment on the Change of Control
Payment Date pursuant to a Change of Control Offer or on the Net Proceeds Offer Payment Date
pursuant to a Net Proceeds Offer and, except in the case of a failure to comply with Article 5
hereof, the Trustee may withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or Trust Officers in good
faith determines that withholding the notice is in the interest of the Holders. This Section 7.05
shall be in lieu of the proviso to Section 315(b) of the TIA, and such proviso of Section 315(b) of
the TIA is hereby expressly excluded from this Indenture and the Notes, as permitted by the TIA.


Section 7.06 Reports by Trustee to Holders.




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



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



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



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



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


Section 7.07 Compensation and Indemnity.




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



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



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



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



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



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


Section 7.08 Replacement of Trustee.




          The Trustee may resign at any time by so notifying the Issuer in writing. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by so notifying the
Trustee



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and the Issuer in writing and may appoint a successor Trustee. The Issuer may remove the
Trustee at its election if:




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



          (b) the Trustee is adjudged a bankrupt or an insolvent;



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



          (d) the Trustee otherwise becomes incapable of acting.



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



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



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



          If the Trustee, after written request by any Holder who has been a bona fide holder of
securities for any period of time specified under Section 3.10(b) of the TIA, fails to comply with
Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.



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


Section 7.09 Successor Trustee by Consolidation, Merger or Conversion.




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


Section 7.10 Eligibility; Disqualification.




          This Indenture shall always have a Trustee which shall be eligible to act as Trustee under TIA
Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall have a combined capital and surplus
of at least $100,000,000 as set forth in its most recent published annual report of condition. If
the Trustee has or shall acquire any “conflicting interest” within the meaning of TIA Section
310(b), the Trustee and the Issuer shall comply with the provisions of TIA Section 310(b);
provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other



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securities or certificates of interest or participation
in other securities of the Issuer are outstanding if the requirements for such exclusion set forth
in TIA Section 310(b)(1) are met. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.10, the Trustee shall resign immediately in the
manner and with the effect hereinbefore specified in this Article 7.



Section 7.11 Preferential Collection of Claims Against the Issuer.




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



ARTICLE 8




AMENDMENTS, SUPPLEMENTS AND WAIVERS


Section 8.01 Without Consent of Holders.




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




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




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




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




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




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




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




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




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




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




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



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Section 8.02 With Consent of Holders.




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




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




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




     (3) reduce any premium payable upon redemption of the Notes or change the date on
which any Notes are subject to redemption or waive any payment with respect to the
redemption of the Notes; provided, however, that solely for the avoidance of doubt, and
without any other implication, any purchase or repurchase of Notes (including pursuant to
Section 4.12 and Section 4.15) shall not be deemed a redemption of the Notes;




     (4) make any Note payable in money or currency other than that stated in the Notes;




     (5) modify or change any provision of this Indenture or the related definitions to
affect the ranking of the Notes or any Note Guarantee in a manner that adversely affects the
Holders;




     (6) reduce the percentage of Holders necessary to consent to an amendment or waiver
to this Indenture or the Notes;




     (7) waive a default in the payment of principal of or premium or interest or
Liquidated Damages, if any, on any Notes (except a rescission of acceleration of the Notes
by the Holders thereof as provided in this Indenture and a waiver of the payment default
that resulted from such acceleration);




     (8) impair the rights of Holders to receive payments of principal of or interest or
Liquidated Damages, if any, on the Notes on or after the due date therefor or to institute
suit for the enforcement of any payment on the Notes;




     (9) release any Guarantor that is a Significant Subsidiary from any of its
obligations under its Note Guarantee or this Indenture, except as permitted by this
Indenture; or




     (10) make any change in these amendment and waiver provisions.



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



          After an amendment or supplement under this Section 8.02 becomes effective, the Issuer shall
mail to Holders of the Notes a notice briefly describing such amendment or supplement. However,



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the failure to give such notice to all Holders of the Notes, or any defect therein, will not impair
or affect the validity of the amendment or supplement.



Section 8.03 Compliance with TIA.




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


Section 8.04 Revocation and Effect of Consents.




          Until an amendment, waiver or supplement becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not
made on any Note. Subject to the following paragraph, any such Holder or subsequent Holder may
revoke the consent as to such Holder’s Note or portion of such Note by notice to the Trustee or the
Issuer received
before the date on which the Trustee receives an Officers’ Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not theretofore revoked such
consent) to the amendment, supplement or waiver.



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



          After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless
it makes a change described in any of clauses (1) through (10) of Section 8.02 hereof, in which
case, the amendment, supplement or waiver shall bind only each Holder who has consented to it and
every subsequent Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note.


Section 8.05 Notation on or Exchange of Notes.




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


Section 8.06 Trustee To Sign Amendments, etc.




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



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ARTICLE 9




DISCHARGE OF INDENTURE; DEFEASANCE


Section 9.01 Satisfaction and Discharge of Indenture.




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




     (1) all the Notes that have been authenticated and delivered (except lost, stolen
or destroyed Notes which have been replaced or paid and Notes for whose payment money has
been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid
to the Issuer or discharged from this trust) have been delivered to the Trustee for
cancellation, or




     (2) (a) all Notes not delivered to the Trustee for cancellation otherwise (i) have
become due and payable, (ii) will become due and payable, or may be called for redemption,
within one year or (iii) have been called for redemption pursuant to paragraph 5 of the
Notes and, in any case, the Issuer has irrevocably deposited or caused to be deposited with
the Trustee as trust funds, in trust solely for the benefit of the Holders, U.S. legal
tender, U.S. Government Obligations or a combination thereof, in such amounts as will be
sufficient (without consideration of any reinvestment of interest) to pay and discharge the
entire Indebtedness (including all principal and accrued interest and Liquidated Damages, if
any) on the Notes not theretofore delivered to the Trustee for cancellation, (b) the Issuer
has paid all other sums payable by it under this Indenture, and (c) the Issuer has delivered
irrevocable instructions to the Trustee to apply the deposited money toward the payment of
the Notes at maturity or on the date of redemption, as the case may be.



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



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



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



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


Section 9.02 Legal Defeasance.




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



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          (b) Upon the Issuer’s exercise under paragraph (a) hereof of the option applicable to this
paragraph (b), the Issuer and each Guarantor shall, subject to the satisfaction of the conditions
set forth in Section 9.04 hereof, be deemed to have been discharged from their respective
obligations with respect to all outstanding Notes and the Note Guarantees on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this
purpose, Legal Defeasance means that the Issuer and each Guarantor shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes and the Note Guarantees,
which shall thereafter be deemed to be “outstanding” only for the purposes of Section 9.05 hereof
and the other Sections of this Indenture referred to in (i) and (ii) below, and to have satisfied
all their other respective obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the
same), except for the following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to receive solely from the
trust fund described in Section 9.05 hereof, and as more fully set forth in such Section, payments
in respect of the principal of, Liquidated Damages, if any, and interest on such Notes when such
payments
are due from such trust fund, (ii) the Issuer’s obligations with respect to such Notes under
Article 2 and Section 4.07 hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Issuer’s obligations in connection therewith and (iv) this Article 9.
Subject to compliance with this Article 9, the Issuer may exercise its option under this Section
9.02 notwithstanding the prior exercise of its option under Section 9.03 below with respect to the
Notes.


Section 9.03 Covenant Defeasance.




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



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



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Section 9.04 Conditions to Legal Defeasance or Covenant Defeasance.




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




     (1) the Issuer must irrevocably deposit with the Trustee (or other qualifying
trustee), as trust funds, in trust solely for the benefit of the Holders, cash in U.S.
dollars or U.S. Government Obligations, or a combination thereof, in such amounts as will be
sufficient (without consideration of any reinvestment of interest), in the opinion of a
nationally recognized investment bank, appraisal firm or firms of independent public
accountants selected by the Issuer, to pay the principal of, Liquidated Damages, if any, and
interest on the Notes on the scheduled due dates or on the applicable Redemption Date, as
the case may be, provided that the Trustee shall have received an irrevocable written order
from the Issuer instructing the Trustee to apply such U.S. dollars or the proceeds of such
U.S. Government Obligations to said payments with respect to such Notes;




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




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




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




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




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



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




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




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




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


Section 9.05 Application of Trust Money.




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



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



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


Section 9.06 Repayment to the Issuer.




          Subject to Section 9.05 hereof, the Trustee and the Paying Agent shall promptly pay to the
Issuer upon request any excess U.S. legal tender or U.S. Government Obligations held by them at any
time and thereupon shall be relieved from all liability with respect to such money. Subject to
applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Issuer upon
request any money held by them for the payment of principal, premium, if any, or interest that
remains unclaimed for two years; provided that the Trustee or such Paying Agent, before being
required to make any payment, may at the expense of the Issuer cause to be published once in a
newspaper of general circulation in The



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City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed, and that after a date specified therein which shall
be at least 30 days from the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Issuer. After payment to the Issuer, Holders entitled
to such money must look to the Issuer for payment as general creditors unless an applicable law
designates another Person.



Section 9.07 Reinstatement.




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



ARTICLE 10




GUARANTEES


Section 10.01 Unconditional Guarantee.




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



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purpose of each Note Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as
provided in Article 6 hereof, such obligations (whether or not due and payable) shall become due
and payable by each Guarantor for the purpose of each Note Guarantee.




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


Section 10.02 Severability.




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


Section 10.03 Limitation on Guarantor’s Liability.




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




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




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



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




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




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


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



Section 10.04 Successors and Assigns.




          This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall
ensure to the benefit of the successors and assigns of the Trustee and the Holders and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the rights and
privileges conferred upon that party in this Indenture and in the Notes shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and conditions of this
Indenture.


Section 10.05 No Waiver.




          Each of the Guarantors agrees that to the maximum extent permitted under applicable law, (a)
neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any
right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any right, power or
privilege and (b) the rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or benefits which either
may have under this Article 10 at law, in equity, by statute or otherwise.


Section 10.06 Release of Guarantor.




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




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




     (2) if such Subsidiary Guarantor is designated as an Unrestricted Subsidiary or
otherwise ceases to be a Restricted Subsidiary, in each case in accordance with the
provisions of



81









 






this Indenture, upon effectiveness of such designation or when it first ceases
to be a Restricted Subsidiary, respectively



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


Section 10.07 Execution of Supplemental Indenture for Future Guarantors.




          Each Subsidiary which is required to become a Guarantor shall, and the Issuer shall cause each
such Subsidiary to, promptly execute and deliver to the Trustee a supplemental indenture
substantially in the form of Exhibit F hereto pursuant to which such Subsidiary shall
become a Guarantor under this Article 10 and shall guarantee the obligations of the Issuer under
the Notes and this Indenture. Concurrently with the execution and delivery of such supplemental
indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and
that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and other similar laws relating to creditors’ rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, the
Note Guarantee of such Guarantor is a legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms.


Section 10.08 Notation of Note Guarantee.




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


Section 10.09 Subordination of Subrogation and Other Rights.




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



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ARTICLE 11




MISCELLANEOUS


Section 11.01 TIA Controls.




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


Section 11.02 Notices.




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



          If to the Issuer or any Guarantor:


Basic Energy Services, Inc.

500 W. Illinois, Suite 100

Midland, TX 79701

Attention: Chief Financial Officer

Tel: (432) 620-5500

Fax: (432) 620-5501



Basic Energy Services, Inc.

400 W. Illinois

Midland, TX 79701

Telephone: 432-620-5500

Fax: 432-620-5501

Attention: Kenneth V. Huseman




          Copy to:


Andrews Kurth LLP

600 Travis, Suite 4200

Houston, TX 77002

Attention: David C. Buck, Esq.

Tel: (713) 220-4200

Fax: (713) 220-4285




          If to the Trustee:


Wells Fargo Bank, N.A.

201 Main Street, Suite 301

MAC: T5441-030

Fort Worth, Texas 76102

Tel: (817) 334-7065






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



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



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



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


Section 11.03 Communications by Holders with Other Holders.




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


Section 11.04 Certificate and Opinion as to Conditions Precedent.




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




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




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


Section 11.05 Statements Required in Certificate and Opinion.




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




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




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



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




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


Section 11.06 Rules by Trustee and Agents.




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


Section 11.07 Legal Holidays.




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


Section 11.08 Governing Law.




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


Section 11.09 No Adverse Interpretation of Other Agreements.




          This Indenture may not be used to interpret another indenture, loan, security or debt
agreement of the Issuer or any Subsidiary thereof. No such indenture, loan, security or debt
agreement may be used to interpret this Indenture.


Section 11.10 No Recourse Against Others.




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


Section 11.11 Successors.




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


Section 11.12 Consent to Jurisdiction; Waiver of Immunities.




          The Issuer and the Guarantors irrevocably consent to the jurisdiction of the competent courts
of the State of New York and the courts of the United States of America located in the Borough of
Manhattan, City and State of New York over any suit, action or proceeding with respect to this
Indenture or the transactions contemplated hereby. The Issuer and the Guarantors waive any
objection that they may have to the venue of any suit, action or proceeding with respect to this
Indenture or the transactions contemplated hereby in the competent courts of the State of New York
or the courts of the United States



85









 




of America, in each case, located in the Borough of Manhattan,
City and State of New York, or that such suit, action or proceeding brought in the competent courts
of the State of New York or the United States of America, in each case, located in the Borough of
Manhattan, City and State of New York was brought in an inconvenient court and agrees not to plead
or claim the same.



Section 11.13 Multiple Counterparts.




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


Section 11.14 Table of Contents, Headings, etc.




          The table of contents, cross reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions hereof.


Section 11.15 Separability.




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



86









 





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



	 	 	 	 	 
	 	BASIC ENERGY SERVICES, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	BASIC ENERGY SERVICES GP, LLC

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	BASIC ENERGY SERVICES LP, LLC

 	 
	 	By:  	/s/ Jerry Tufly
 	 
	 	 	Name:  	Jerry Tufly 	 
	 	 	Title:  	President 	 
	 
	 	BASIC ENERGY SERVICES L.P.

 	 
	 	By:  	BASIC ENERGY SERVICES GP, LLC
 	 
	 	 	its General Partner 	 
	 	 	 
	 	By:  	         /s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	FIRST ENERGY SERVICES COMPANY

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 



S-1









 






	 	 	 	 	 



	 	 	 	 	 
	 	BASIC ESA, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	BASIC MARINE SERVICES, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	CHAPARRAL SERVICE, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	HENNESSEY RENTAL TOOLS, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	OILWELL FRACTURING SERVICES, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	WILDHORSE SERVICES, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 



S-2









 






	 	 	 	 	 



	 	 	 	 	 
	 	LEBUS OIL FIELD SERVICE CO.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	GLOBE WELL SERVICE, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	SCH DISPOSAL, L.L.C.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	JS ACQUISITION LLC

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	JETSTAR HOLDINGS, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	ACID SERVICES LLC

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 



S-3









 






	 	 	 	 	 



	 	 	 	 	 
	 	JETSTAR ENERGY SERVICES, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	SLEDGE DRILLING CORP.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	PERMIAN PLAZA, LLC

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	XTERRA FISHING & RENTAL TOOLS CO.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	TAYLOR INDUSTRIES, LLC

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	PLATINUM PRESSURE SERVICES, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 



S-4









 






	 	 	 	 	 



	 	 	 	 	 
	 	ADMIRAL WELL SERVICE, INC.

 	 
	 	By:  	/s/ Kenneth V. Huseman
 	 
	 	 	Name:  	Kenneth V. Huseman 	 
	 	 	Title:  	President 	 
	 
	 	WELLS FARGO BANK, N.A.,

as Trustee

 	 
	 	By:  	/s/ John C. Stohlmann
 	 
	 	 	Name:  	John C. Stohlmann 	 
	 	 	Title:  	Vice President 	 
	 




S-5









 





EXHIBIT A




CUSIP No.: [           ]




BASIC
ENERGY SERVICES, INC.



73/4% SENIOR NOTE DUE 2019, SERIES A




			
	No.
	 	$          






          BASIC ENERGY SERVICES, INC., a Delaware corporation (the “Issuer,” which term includes
any successor entity), for value received promises to pay to [      ] or registered assigns, the
principal sum of [                    ] DOLLARS on February 15, 2019.



          Interest Payment Dates: February 15 and August 15, commencing August 15, 2011.



          Record Dates: February 1 and August 1.



          Reference is made to the further provisions of this Note contained herein and the Indenture
(as defined), which will for all purposes have the same effect as if set forth at this place.



A-1









 





          IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by
its duly authorized Officers.



	 	 	 	 	 
	 	BASIC ENERGY SERVICES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Dated: [                     ]








A-2









 








Certificate of Authentication





          This is one of the 73/4% Senior Notes due 2019, Series A referred to in the within mentioned
Indenture.



	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 


Dated: [                     ]









A-3









 








(REVERSE
OF SECURITY)



73/4% SENIOR NOTE DUE 2019, SERIES A





          1. Interest. Basic Energy Services, Inc., a Delaware corporation (the
“Issuer”), promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Notes will accrue from the most recent date on which interest
has been paid or, if no interest has been paid, from the date of the original issuance of the
Notes. The Issuer will pay interest semi annually in arrears on each Interest Payment Date,
commencing August 15, 2011. Interest will be computed on the basis of a 360-day year of twelve
30-day months.



          The Issuer shall pay interest on overdue principal and on overdue installments of interest
(without regard to any applicable grace periods) to the extent lawful from time to time on demand
at the rate borne by the Notes.



          2. Method of Payment. The Issuer shall pay interest on the Notes (except
defaulted interest) to the Persons who are the registered Holders at the close of business on the
February 1 or August 1 immediately preceding the Interest Payment Date (whether or not such day is
a Business Day) even if the Notes are cancelled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent to collect
principal payments. Payments of principal and premium, if any, and interest will be made in money
of the United States that at the time of payment is legal tender for payment of public and private
debts. If a Holder of Notes in certificated form has given wire transfer instructions to the Issuer
at least ten Business Days prior to the applicable payment date, the Issuer will make all payments
on such Holder’s Notes by wire transfer of immediately available funds to the account in the United
States specified in those instructions. Otherwise, payments on the Notes will be made at the
office or agency of the Paying Agent within the City and State of New York unless the Issuer elects
to make interest payments by check mailed to the Holders at their addresses set forth in the
register of Holders.



          3. Paying Agent and Registrar. Initially, Wells Fargo Bank, N.A. (the
“Trustee”), will act as Paying Agent and Registrar. The Issuer may change any Paying
Agent, Registrar or co-Registrar without notice to the Holders. Neither the Issuer nor any of its
Affiliates may act as Paying Agent but may act as Registrar or co-Registrar. The Issuer has
designated the office of Wells Fargo Trust Company, N.A, acting on behalf (for the benefit) of, the
Trustee, located at 45 Broadway, 14th Floor, New York, New York 10006 as its office where Notes may
be surrendered for registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Issuer in respect of the Notes may be served



          4. Indenture. The Issuer issued this Note under an Indenture, dated as of
February 15, 2011 (the “Indenture”), by and among the Issuer, the Guarantors and the
Trustee. This Note is one of a duly authorized issue of Initial Notes of the Issuer designated as
its Series A 73/4% Senior Notes due 2019 (the “Notes”). The Notes include the Initial Notes,
the Additional Notes, if any, and the Exchange Notes issued in exchange for the Initial Notes and
Additional Notes, if any, pursuant to the Indenture. The Initial Notes and the Exchange Notes are
treated as a single class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture
Act of 1939 (15 U.S. Code Sections 77aaa 77bbbb) (the “TIA”), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of them. The Notes
are general unsecured obligations of the Issuer.



A-4









 





          5. Redemption.



          (a) Optional Redemption. The Notes will be redeemable, at the Issuer’s option, in
whole at any time or in part from time to time, on and after February 15, 2015 at the following
Redemption Prices (expressed as percentages of the principal amount thereof) if redeemed during the
twelve-month period commencing on February 15 of the applicable year set forth below, plus, in each
case, accrued and unpaid interest and Liquidated Damages, if any, to the Redemption Date:



	 	 	 	 	 
	Year	 	Percentage	 
	2015
	 	 	103.875	%
	2016
	 	 	101.938	%
	2017 and thereafter
	 	 	100.000	%






          (b) Redemption at Applicable Premium. In addition, prior to February 15, 2015,
the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time,
at a Redemption Price equal to 100% of the principal amount thereof, plus the Applicable Premium as
of, and accrued and unpaid interest and Liquidated Damages, if any, to the applicable Redemption
Date (subject to the right of Holders of record on the relevant record date to receive interest due
on the relevant Interest Payment Date).




          (c) Redemption upon Consummation of Certain Qualified Equity Offerings.
Notwithstanding the foregoing, at any time, or from time to time, prior to February 15, 2014, the
Issuer may on any one or more occasions, at its option, use all or any portion of the net cash
proceeds of one or more Qualified Equity Offerings (as defined below) to redeem up to 35% of the
aggregate principal amount of the Notes issued at a Redemption Price equal to 107.750% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of redemption (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant Interest Payment Date); provided that at least 65% of the
aggregate principal amount of Notes issued under the Indenture remains outstanding immediately
after giving effect to any such redemption. In order to effect the foregoing redemption with the
proceeds of any Qualified Equity Offering, the Issuer shall consummate such redemption not more
than 90 days after the consummation of any such Qualified Equity Offering.




          6. Notice of Redemption. Notice of redemption under paragraph 5 of this Note will
be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder to
be redeemed at such Holder’s registered address, except that redemption notices may be mailed more
than 60 days prior to a Redemption Date if the notice is issued in connection with a satisfaction
and discharge of the Indenture.




          Except as set forth in the Indenture, if money for the redemption of the Notes called for
redemption shall have been deposited with the Paying Agent for redemption on such Redemption Date,
then, unless the Issuer defaults in the payment of such Redemption Price plus accrued interest, if
any, the Notes called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment of the Redemption
Price plus accrued interest, if any.



          7. Offers to Purchase. The Indenture provides that, after certain Asset Sales (as
defined in the Indenture) and upon the occurrence of a Change of Control (as defined in the
Indenture), and subject to further limitations contained therein, the Issuer will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set forth in the Indenture.



A-5









 





          8. Registration Rights. Pursuant to a Registration Rights Agreement among the
Issuer, the Guarantors, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo
Securities, LLC, Capital One Southcoast, Inc. and Comerica Securities, Inc. as Initial Purchasers
of the Notes, the Issuer and the Guarantors are obligated to consummate an exchange offer pursuant
to which the Holder of this Note shall have the right to exchange this Note for notes of a separate
series issued under the Indenture (or a trust indenture substantially identical to the Indenture in
accordance with the terms of the Registration Rights Agreement) which have been registered under
the Securities Act, in like principal amount and having substantially identical terms as the Notes.
The Holders shall be entitled to receive Liquidated Damages by way of certain additional interest
payments in the event such exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights Agreement.



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



          10. Persons Deemed Owners. The registered holder of a Note shall be treated as
the owner of it for all purposes.



          11. Unclaimed Money. Subject to applicable unclaimed property laws, if money for
the payment of principal or interest remains unclaimed for two years, the Trustee and the Paying
Agent will pay the money back to the Issuer. After that, Holders entitled to money must look to
the Issuer for payment as general creditors unless an “abandoned property” law designates another
Person.



          12. Legal Defeasance and Covenant Defeasance. If the Issuer at any time deposits
with the Trustee U.S. legal tender or U.S. Government Obligations sufficient to pay the principal
of and interest on the Notes to redemption or the scheduled due dates and complies with the other
provisions of the Indenture relating to Covenant Defeasance, the Issuer will be discharged from
certain provisions of the Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes). The Notes are also subject to Legal
Defeasance as provided in Article 9 of the Indenture.



          13. Amendments, Supplements, and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, and any existing Default or
Event of Default or noncompliance with any provision may be waived with the consent of the Holders
of a majority in aggregate principal amount of the Notes then outstanding. Without notice to or
consent of any Holder, the parties thereto may amend or supplement the Indenture or the Notes to,
among other things, cure any ambiguity, defect or inconsistency, provide for uncertificated Notes
in addition to or in place of certificated Notes or make any other change that does not adversely
affect in any material respect the rights of any Holder.



          14. Restrictive Covenants. The Indenture imposes certain limitations on the
ability of each of the Issuer and its Restricted Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Equity Interests, enter into transactions
with Affiliates, create dividend or other payment restrictions affecting Restricted Subsidiaries,
sell assets, create Liens, make certain Investments, merge or consolidate with any other Person, or
sell, transfer, lease, convey or otherwise



A-6









 




dispose of all or substantially all of its assets. Such limitations are subject to a number
of important qualifications and exceptions. The Issuer must annually report to the Trustee on
compliance with such limitations.




          15. Successor Entity. When a successor entity assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the Indenture, and
immediately before and thereafter no Default or Event of Default exists and certain other
conditions are satisfied, the predecessor entity will be released from those obligations.



          16. Defaults and Remedies. Events of Default are set forth in the Indenture. If
an Event of Default (other than an Event of Default specified in Section 6.01(g) or (h)) shall
occur and be continuing, the Trustee, by written notice to the Issuer, or the Holders of at least
25% in aggregate principal amount of the Notes then outstanding by written notice to the Issuer and
the Trustee, may declare (an “acceleration declaration”) all amounts owing under the Notes
to be due and payable (a) if there is no Indebtedness outstanding under any Credit Facility at such
time, immediately, and (b) if otherwise, upon the earlier of (x) the final maturity (after giving
effect to any applicable grace period or extensions thereof) or an acceleration of any Indebtedness
under any Credit Facility prior to the express final stated maturity thereof and (y) five Business
Days after the Representative under each Credit Facility receives the acceleration declaration, but
in the case of this clause (b) only, if such Event of Default is then continuing; provided,
however, that after such acceleration but before a judgment or decree based on acceleration, the
Holders of a majority in aggregate principal amount of the outstanding Notes may rescind and annul
such acceleration if, among other things, all existing Events of Default, other than the nonpayment
of principal, premium and Liquidated Damages, if any, or interest that has become due solely
because of the acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of Default specified
in Section 6.01(g) or (h) of the Indenture occurs with respect to the Issuer and is continuing,
such principal amount, together with premium and Liquidated Damages, if any, and interest with
respect to all of the Notes, shall be due and payable immediately without any declaration or other
act on the part of the Trustee or the Holders.



          17. Trustee Dealings with the Issuer. The Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and perform services for
the Issuer, and may otherwise deal with the Issuer, its Subsidiaries or their respective Affiliates
as if it were not the Trustee.



          18. No Recourse Against Others. As more fully described in the Indenture, no
director, officer, employee, stockholder or incorporator, of the Issuer shall have any liability
for any obligations of the Issuer under the Notes or the Indenture, or of any Guarantor under its
Note Guarantees or for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Notes.



          19. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this Note.



          20. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.



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



A-7









 





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



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



          The Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture and the Registration Rights Agreement. Requests may be made to: Basic Energy Services,
Inc., Attention: Chief Financial Officer, 500 W. Illinois, Suite 100, Midland, Texas 79701, fax:
(432) 620-5501.



A-8









 





FORM OF NOTE GUARANTEE NOTATION




          For value received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in, and
subject to the provisions of, the Indenture dated as of February 15, 2011 (the “Indenture”)
among Basic Energy Ser-vices, Inc. (the “Company”), the Guarantors party thereto and Wells
Fargo Bank, N.A., a national banking association, as trustee (the “Trustee”), that (i) the
principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes will be
promptly paid in full when due, subject to any applicable grace period, whether at the Maturity
Date, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium,
if any, and interest and Liquidated Damages, if any, on the Notes, if lawful, and all other
obligations of the Company to the Holders or the Trustee under the Indenture or under the Notes
will be promptly paid in full, all in accordance with the terms thereof. Failing payment when due
of any amount so guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. The obligations of the Guarantors to the Holders of Notes
and to the Trustee pursuant to the Indenture (including the Subsidiary Guarantee) are set forth in
Article 10 of the Indenture, and reference is hereby made to the Indenture for the precise terms of
the Subsidiary Guarantee and the conditions to release thereof. Each Holder of a Note, by
accepting the same agrees to and shall be bound by such provisions.



          Capitalized terms used but not defined herein have the meanings given to them in the
In-denture.



	 	 	 	 	 
	 	[NAME OF EACH GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




A-9











 





ASSIGNMENT FORM




          If you the Holder want to assign this Note, fill in the form below and have your signature
guaranteed:



I or we assign and transfer this Note to:




  




  




  





(Print or type name, address and zip code and

social security or tax ID number of assignee)




	 	 	 

	and irrevocably appoint
	 	 
	 

	 	 




agent to transfer this Note on the books of Basic Energy Services, Inc. The agent may substitute
another to act for him.




	 	 	 	 	 	 	 	 	 

	Date:

	 	 	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

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





Medallion Guarantee:                                                                     
            



Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.









A-10









 








[OPTION OF HOLDER TO ELECT PURCHASE]




          If you want to elect to have this Note purchased by Basic Energy Services, Inc. pursuant to
Section 4.12 or Section 4.15 of the Indenture, check the appropriate box:




Section 4.12 o

Section 4.15 o




          If you want to elect to have only part of this Note purchased by Basic Energy Services, Inc.
pursuant to Section 4.12 or Section 4.15 of the Indenture, state the amount you elect to have
purchased:



$ __________________




	 	 	 	 	 	 	 

	Date:
	 	 	 	 	 	 
	 

	 	 

	 	 
	 	
	 

	 	 	 	 	 	

NOTICE: The signature on this assignment must
correspond with the name as it appears upon
the face of the within Note in every
particular without alteration or enlargement
or any change whatsoever and be guaranteed by
the endorser’s bank or broker.





Medallion Guarantee:                                                             



Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.











A-11









 








EXHIBIT B




CUSIP No.: [      ]




BASIC ENERGY SERVICES, INC.


73/4% SENIOR NOTE DUE 2019, SERIES B




			
	 	 	 
	No.
	 	$






          BASIC ENERGY SERVICES, INC., a Delaware corporation (the “Issuer,” which term includes
any successor entity), for value received promises to pay to [            ] or registered assigns, the
principal sum of [             ] DOLLARS on February 15, 2019.




          Interest Payment Dates: February 15 and August 15, commencing August 15, 2011.




          Record Dates: February 1 and August 1.




          Reference is made to the further provisions of this Note contained herein and the Indenture
(as defined), which will for all purposes have the same effect as if set forth at this place.








B-1









 








     IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by
its duly authorized Officers.



	 	 	 	 	 
	 	BASIC ENERGY SERVICES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Dated: [           ]








B-2









 








Certificate of Authentication




          This is one of the 73/4% Senior Notes due 2019, Series B referred to in the within mentioned
Indenture.




	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 


Dated: [       ]









B-3









 








(REVERSE OF SECURITY)



73/4% SENIOR NOTE DUE 2019, SERIES B



          1. Interest. Basic Energy Services, Inc., a Delaware corporation (the
“Issuer”), promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Notes will accrue from the most recent date on which interest
has been paid or, if no interest has been paid, from the date of the original issuance of the
Notes. The Issuer will pay interest semi annually in arrears on each Interest Payment Date,
commencing August 15, 2011. Interest will be computed on the basis of a 360-day year of twelve
30-day months.




          The Issuer shall pay interest on overdue principal and on overdue installments of interest
(without regard to any applicable grace periods) to the extent lawful from time to time on demand
at the rate borne by the Notes.




          2. Method of Payment. The Issuer shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of business on the February 1
or August 1 immediately preceding the Interest Payment Date (whether or not such day is a Business
Day) even if the Notes are cancelled on registration of transfer or registration of exchange after
such Record Date. Holders must surrender Notes to a Paying Agent to collect principal payments.
Payments of principal and premium, if any, and interest will be made in money of the United States
that at the time of payment is legal tender for payment of public and private debts. If a Holder of
Notes in certificated form has given wire transfer instructions to the Issuer at least ten Business
Days prior to the applicable payment date, the Issuer will make all payments on such Holder’s Notes
by wire transfer of immediately available funds to the account in the United States specified in
those instructions. Otherwise, payments on the Notes will be made at the office or agency of the
Paying Agent within the City and State of New York unless the Issuer elects to make interest
payments by check mailed to the Holders at their addresses set forth in the register of Holders.




          3. Paying Agent and Registrar. Initially, Wells Fargo Bank, N.A. (the
“Trustee”), will act as Paying Agent and Registrar. The Issuer may change any Paying
Agent, Registrar or co-Registrar without notice to the Holders. Neither the Issuer nor any of its
Affiliates may act as Paying Agent but may act as Registrar or co-Registrar. The Issuer has
designated the office of Wells Fargo Trust Company, N.A, acting on behalf (for the benefit) of, the
Trustee, located at 45 Broadway, 14th Floor, New York, New York 10006 as its office where Notes may
be surrendered for registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Issuer in respect of the Notes may be served




          4. Indenture. The Issuer issued this Note under an Indenture, dated as of February
15, 2011 (the “Indenture”), by and among the Issuer, the Guarantors and the Trustee. This
Note is one of a duly authorized issue of Initial Notes of the Issuer designated as its Series B
73/4% Senior Notes due 2019 (the “Notes”). The Notes include the Initial Notes, the
Additional Notes, if any, and the Exchange Notes issued in exchange for the Initial Notes and
Additional Notes, if any, pursuant to the Indenture. The Initial Notes and the Exchange Notes are
treated as a single class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture
Act of 1939 (15 U.S. Code Sections 77aaa 77bbbb) (the “TIA”), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of them. The Notes
are general unsecured obligations of the Issuer.







B-4









 








          5. Redemption.




          (a) Optional Redemption. The Notes will be redeemable, at the Issuer’s option, in
whole at any time or in part from time to time, on and after February 15, 2015 at the following
Redemption Prices (expressed as percentages of the principal amount thereof) if redeemed during the
twelve-month period commencing on February 15 of the applicable year set forth below, plus, in each
case, accrued and unpaid interest and Liquidated Damages, if any, to the Redemption Date:




	 	 	 	 	 

	Year
	 	Percentage
	2015
	 	 	103.875	%
	2016
	 	 	101.938	%
	2017 and thereafter
	 	 	100.000	%






          (b) Redemption at Applicable Premium. In addition, prior to February 15, 2015, the
Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, at a
Redemption Price equal to 100% of the principal amount thereof, plus the Applicable Premium as of,
and accrued and unpaid interest and Liquidated Damages, if any, to the applicable Redemption Date
(subject to the right of Holders of record on the relevant record date to receive interest due on
the relevant Interest Payment Date).




          (c) Redemption upon Consummation of Certain Qualified Equity Offerings.
Notwithstanding the foregoing, at any time, or from time to time, prior to February 15, 2014, the
Issuer may on any one or more occasions, at its option, use all or any portion of the net cash
proceeds of one or more Qualified Equity Offerings (as defined below) to redeem up to 35% of the
aggregate principal amount of the Notes issued at a Redemption Price equal to 107.750% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of redemption (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant Interest Payment Date); provided that at least 65% of the
aggregate principal amount of Notes issued under the Indenture remains outstanding immediately
after giving effect to any such redemption. In order to effect the foregoing redemption with the
proceeds of any Qualified Equity Offering, the Issuer shall consummate such redemption not more
than 90 days after the consummation of any such Qualified Equity Offering.




          6. Notice of Redemption. Notice of redemption under paragraph 5 of this Note will be
mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder to be
redeemed at such Holder’s registered address, except that redemption notices may be mailed more
than 60 days prior to a Redemption Date if the notice is issued in connection with a satisfaction
and discharge of the Indenture.




          Except as set forth in the Indenture, if money for the redemption of the Notes called for
redemption shall have been deposited with the Paying Agent for redemption on such Redemption Date,
then, unless the Issuer defaults in the payment of such Redemption Price plus accrued interest, if
any, the Notes called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment of the Redemption
Price plus accrued interest, if any.




          7. Offers to Purchase. The Indenture provides that, after certain Asset Sales (as
defined in the Indenture) and upon the occurrence of a Change of Control (as defined in the
Indenture), and subject to further limitations contained therein, the Issuer will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set forth in the Indenture.







B-5









 








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




          9. Persons Deemed Owners. The registered holder of a Note shall be treated as the
owner of it for all purposes.




          10. Unclaimed Money. Subject to applicable unclaimed property laws, if money for the
payment of principal or interest remains unclaimed for two years, the Trustee and the Paying Agent
will pay the money back to the Issuer. After that, Holders entitled to money must look to the
Issuer for payment as general creditors unless an “abandoned property” law designates another
Person.




          11. Legal Defeasance and Covenant Defeasance. If the Issuer at any time deposits with
the Trustee U.S. legal tender or U.S. Government Obligations sufficient to pay the principal of and
interest on the Notes to redemption or the scheduled due dates and complies with the other
provisions of the Indenture relating to Covenant Defeasance, the Issuer will be discharged from
certain provisions of the Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes). The Notes are also subject to Legal
Defeasance as provided in Article 9 of the Indenture.




          12. Amendments, Supplements, and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, and any existing Default or
Event of Default or noncompliance with any provision may be waived with the consent of the Holders
of a majority in aggregate principal amount of the Notes then outstanding. Without notice to or
consent of any Holder, the parties thereto may amend or supplement the Indenture or the Notes to,
among other things, cure any ambiguity, defect or inconsistency, provide for uncertificated Notes
in addition to or in place of certificated Notes or make any other change that does not adversely
affect in any material respect the rights of any Holder.




          13. Restrictive Covenants. The Indenture imposes certain limitations on the ability
of each of the Issuer and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness, make payments in respect of its Equity Interests, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting Restricted Subsidiaries, sell
assets, create Liens, make certain Investments, merge or consolidate with any other Person, or
sell, transfer, lease, convey or otherwise dispose of all or substantially all of its assets. Such
limitations are subject to a number of important qualifications and exceptions. The Issuer must
annually report to the Trustee on compliance with such limitations.




          14. Successor Entity. When a successor entity assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the Indenture, and
immediately before and thereafter no Default or Event of Default exists and certain other
conditions are satisfied, the predecessor entity will be released from those obligations.




          15. Defaults and Remedies. Events of Default are set forth in the Indenture. If an
Event of Default (other than an Event of Default specified in Section 6.01(g) or (h)) shall occur
and be continuing, the Trustee, by written notice to the Issuer, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding by written notice to the Issuer and the
Trustee, may






B-6









 







declare (an “acceleration declaration”) all amounts owing under the Notes to be due
and payable (a) if there is no Indebtedness outstanding under any Credit Facility at such time,
immediately, and (b) if otherwise, upon the earlier of (x) the final maturity (after giving effect
to any applicable grace period or extensions thereof) or an acceleration of any Indebtedness under
any Credit Facility prior to the express final stated maturity thereof and (y) five Business Days
after the Representative under each Credit Facility receives the acceleration declaration, but in
the case of this clause (b) only, if such Event of Default is then continuing; provided, however,
that after such acceleration but before a judgment or decree based on acceleration, the Holders of
a majority in aggregate principal amount of the outstanding Notes may rescind and annul such
acceleration if, among other things, all existing Events of Default, other than the nonpayment of
principal, premium and Liquidated Damages, if any, or interest that has become due solely because
of the acceleration, have been cured or waived. No such rescission shall affect any subsequent
Default or impair any right consequent thereto. In case an Event of Default specified in Section
6.01(g) or (h) of the Indenture occurs with respect to the Issuer and is continuing, such principal
amount, together with premium and Liquidated Damages, if any, and interest with respect to all of
the Notes, shall be due and payable immediately without any declaration or other act on the part of
the Trustee or the Holders.




          16. Trustee Dealings with the Issuer. The Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and perform services for
the Issuer, and may otherwise deal with the Issuer, its Subsidiaries or their respective Affiliates
as if it were not the Trustee.




          17. No Recourse Against Others. As more fully described in the Indenture, no
director, officer, employee, stockholder or incorporator, of the Issuer shall have any liability
for any obligations of the Issuer under the Notes or the Indenture, or of any Guarantor under its
Note Guarantees or for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Notes.




          18. Authentication. This Note shall not be valid until the Trustee or Authenticating
Agent manually signs the certificate of authentication on this Note.




          19. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.




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




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




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




          The Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to: Basic Energy Services, Inc., Attention: Chief Financial
Officer, 500 W. Illinois, Suite 100, Midland, Texas 79701, fax: (432) 620-5501.






B-7









 








FORM OF NOTE GUARANTEE NOTATION




     For value received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in, and
subject to the provisions of, the Indenture dated as of February 15, 2011 (the “Indenture”)
among Basic Energy Services, Inc. (the “Company”), the Guarantors party thereto and Wells
Fargo Bank, N.A., a national banking association, as trustee (the “Trustee”), that (i) the
principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes will be
promptly paid in full when due, subject to any applicable grace period, whether at the Maturity
Date, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium,
if any, and interest and Liquidated Damages, if any, on the Notes, if lawful, and all other
obligations of the Company to the Holders or the Trustee under the Indenture or under the Notes
will be promptly paid in full, all in accordance with the terms thereof. Failing payment when due
of any amount so guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. The obligations of the Guarantors to the Holders of Notes
and to the Trustee pursuant to the Indenture (including the Subsidiary Guarantee) are set forth in
Article 10 of the Indenture, and reference is hereby made to the Indenture for the precise terms of
the Subsidiary Guarantee and the conditions to release thereof. Each Holder of a Note, by
accepting the same agrees to and shall be bound by such provisions.



     Capitalized terms used but not defined herein have the meanings given to them in the
Indenture.



	 	 	 	 	 
	 	[NAME OF EACH GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



B-8









 






	 	 	 	 	 



ASSIGNMENT FORM




          If you the Holder want to assign this Note, fill in the form below and have your signature
guaranteed:



I or we assign and transfer this Note to:



  




  




  





(Print or type name, address and zip code and

social security or tax ID number of assignee)




	 	 	 

	and irrevocably appoint
	 	 
	 

	 	 




agent to transfer this Note on the books of Basic Energy Services, Inc. The agent may substitute
another to act for him.




	 	 	 	 	 	 	 	 	 

	Date:

	 	 	 	 	 	Signed:	 	 
	 

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





Medallion Guarantee:                                                             



Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.









B-9









 








[OPTION OF HOLDER TO ELECT PURCHASE]




     If you want to elect to have this Note purchased by Basic Energy Services, Inc. pursuant to
Section 4.12 or Section 4.15 of the Indenture, check the appropriate box:



Section 4.12 o

Section 4.15 o




     If you want to elect to have only part of this Note purchased by Basic Energy Services, Inc.
pursuant to Section 4.12 or Section 4.15 of the Indenture, state the amount you elect to have
purchased:


$ __________________




	 	 	 	 	 	 	 

	Date:
	 	 	 	 	 	 
	 

	 	 

	 	 
	 	
	 

	 	 	 	 	 	

NOTICE: The signature on this assignment must
correspond with the name as it appears upon
the face of the within Note in every
particular without alteration or enlargement
or any change whatsoever and be guaranteed by
the endorser’s bank or broker.





Medallion Guarantee:                                                             



Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.





B-10











 





EXHIBIT C




CERTIFICATE TO BE DELIVERED UPON EXCHANGE

OR REGISTRATION OF TRANSFER OF NOTES



Re: Basic Energy Services, Inc. ( “Basic Energy Services, Inc.”)
     
73/4% Senior Notes due 2019 (the “Notes”)
—




          This Certificate relates to $_______ principal amount of Notes held in the form of* ___ a
beneficial interest in a Global Note or* _______ Certificated Notes by ______ (the
“Transferor”).




          The Transferor:




          o has requested by written order that the Registrar deliver in exchange for its beneficial
interest in the Global Note held by the Depository a Certificated Note or Certificated Notes in
definitive, registered form of authorized denominations and an aggregate principal amount equal to
its beneficial interest in such Global Note (or the portion thereof indicated above); or




          o has requested by written order that the Registrar exchange or register the transfer of a
Certificated Note or Certificated Notes.




          In connection with such request and in respect of each such Note, the Transferor does hereby
certify that the Transferor is familiar with the Indenture relating to the above captioned Notes
and the restrictions on transfers thereof as provided in Section 2.16 of such Indenture, and that
the transfer of the Notes does not require registration under the Securities Act of 1933, as
amended (the “Securities Act”), because*:




          o Such Note is being acquired for the Transferor’s own account, without transfer (in
satisfaction of Section 2.16 of the Indenture).




          o Such Note is being transferred to a “qualified institutional buyer” (as defined in Rule 144A
under the Securities Act), in reliance on Rule 144A.




          o Such Note is being transferred to an institutional “accredited investor” (within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act) which delivers a
certificate to the Trustee in the form of Exhibit D to the Indenture. [An Opinion of
Counsel to the effect that such transfer does not require registration under the Securities Act
accompanies this certification.]




          o Such Note is being transferred in reliance on Regulation S under the Securities Act and a
transfer certificate for Regulation S transfers in the form of Exhibit E to the Indenture
accompanies this certification. [An Opinion of Counsel to the effect that such transfer does not
require registration under the Securities Act accompanies this certification.]




          o Such Note is being transferred in reliance on Rule 144 under the Securities Act. [An
Opinion of Counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.]


C-1









 







           o Such Note is being transferred in reliance on and in compliance with an exemption from the
registration requirements of the Securities Act other than Regulation S, Rule 144A or Rule 144
under the Securities Act to a Person other than an institutional “accredited investor.” [An
Opinion of Counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.]




	 	 	 	 	 
	 	[INSERT NAME OF TRANSFEROR]

 	 
	 	By:  	
 	 
	 	 	[Authorized Signatory] 	 
	 	 	 	 




Date:                     



*Check applicable box.










C-2









 








EXHIBIT D




Form of Transferee Letter of Representation




Wells Fargo Bank, N.A.

201 Main Street, Suite 301

MAC: T5441-030

Fort Worth, TX 76102

Attn: Corporate Trust and Escrow Services



Ladies and Gentlemen:




          This certificate is delivered to request a transfer of $________ principal amount of the 73/4%
Senior Notes due 2019 of Basic Energy Services, Inc. (“Basic Energy Services, Inc.”) and
any guarantee thereof (the “Notes”), or a beneficial interest therein, to the undersigned
transferee:




	 	 	 	 	 	 	 

	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 

	 

	 	Address:
	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 

	 

	 	Taxpayer ID Number:
	 	 	 	 
	 

	 	 	 	 	 	 





          The undersigned represents and warrants to you that:




          1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act of 1933 (the “Securities Act”)) purchasing Notes for our own
account or for the account of such an institutional “accredited investor” and we are acquiring the
Notes not with a view to, or for offer or sale in connection with, any distribution in violation of
the Securities Act. We have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risk of our investment in the Notes and we invest in or
purchase securities similar to the Notes in the normal course of our business. We and any accounts
for which we are acting are each able to bear the economic risk of our or its investment.




          2. We acknowledge that we have had access to such financial and other information, and have
been afforded the opportunity to ask such questions of representatives of Basic Energy Services,
Inc. and receive answers thereto, as we deem necessary.




          3. We understand that the Notes have not been registered under the Securities Act and, unless
so registered, may not be sold except as permitted in the following sentence. We agree on our own
behalf and on behalf of any investor account for which we are purchasing Notes that we will not
prior to the date (the “Resale Restriction Termination Date”) that is (a) one year after
the later of the original issuance of the Notes and the last date on which Basic Energy Services,
Inc. or any affiliate of Basic Energy Services, Inc. was the owner of such Notes (or any
predecessor thereto) or (b) such later date, if any, as may be required by any subsequent change in
applicable law, offer, sell or otherwise transfer such Notes except (a) to Basic Energy Services,
Inc. or any subsidiary of Basic Energy Services, Inc., (b) inside the United States to a “qualified
institutional buyer” in compliance with Rule 144A under the Securities Act, (c) inside the United
States to an “institutional accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that, prior to such transfer, furnishes (or has furnished on its behalf by
a U.S. broker-dealer) to the Trustee a signed letter substantially in the form of this letter, (d)
outside the United States in an offshore transaction in compliance with Rule 904 under the
Securities Act, (e) pursuant to Rule 144 under the Securities Act, (f) pursuant to any other
available exemption from the registration requirements of the Securities Act or (g) pursuant to an
effective registration statement under






D-1









 








the Securities Act. We acknowledge that Basic Energy Services, Inc. and the Trustee reserve
the right prior to any offer, sale or other transfer prior to the Resale Restriction Termination
Date of the applicable Notes pursuant to clause (c), (e) or (f) above to require the delivery of an
opinion of counsel to Basic Energy Services, Inc. and the Trustee.




          We understand that the Trustee will not be required to accept for registration of transfer any
Notes acquired by us, except upon presentation of evidence satisfactory to Basic Energy Services,
Inc. and the Trustee that the foregoing restrictions on transfer have been complied with. We
further understand that any Notes purchased by us in the form of definitive physical certificates
will bear a legend reflecting the substance of paragraph 3 of this letter. We further agree to
provide to any Person acquiring any of the Notes from us a notice advising such Person that
transfers of such Notes are restricted as stated herein and that certificates representing such
Notes will bear a legend to that effect.




          We understand that Basic Energy Services, Inc. and the Trustee and others are entitled to rely
upon the truth and accuracy of our acknowledgments, representations and agreements set forth
herein, and we agree to notify you promptly in writing if any of our acknowledgments,
representations or agreements herein ceases to be accurate and complete. You are also irrevocably
authorized to produce this letter or a copy hereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters covered hereby.




          We represent to you that we have full power to make the foregoing acknowledgments,
representations and agreements on our own behalf and on behalf of any investor account for which we
are acting as fiduciary agent.




          As used herein, the terms “offshore transaction,” “United States” and “U.S. Person” have the
respective meanings given to them in Regulation S under the Securities Act.




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




	 	 	 	 	 
	Dated:         
            	

 TRANSFEREE:

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 



D-2









 






	 	 	 	 	 



EXHIBIT E




Form of Certificate To Be

Delivered in Connection

with Regulation S Transfers




_______________, ____




201 Main Street, Suite 301

MAC: T5441-030

Fort Worth, TX 76102

Attn: Corporate Trust and Escrow Services



Re: Basic Energy Services, Inc. 73/4% Senior Notes due 2019 (the “Notes”)



Ladies and Gentlemen:




          In connection with our proposed sale of $__________ aggregate principal amount of the Notes or
a beneficial interest therein, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended (the “Securities
Act”), and, accordingly, we represent that:




          (1) the offer of the Notes was not made to a Person in the United States;




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




          (3) no directed selling efforts have been made in the United States in contravention of the
requirements of Rule 903(a) or Rule 904(a) of Regulation S, as applicable;




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




          (5) we have advised the transferee of the transfer restrictions applicable to the Notes.








E-1









 








          You and Basic Energy Services, Inc. are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered hereby. Defined terms
used herein without definition have the respective meanings provided in Regulation S.




	 	 	 	 	 
	 	Very truly yours,





[Name of Transferor]

 	 
	 	By:  	
 	 
	 	 	 	 
	 	 	 	 



E-2









 






	 	 	 	 	 



EXHIBIT F




FORM OF SUPPLEMENTAL INDENTURE




          SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of [ ], 20[
], among [ ] (the “New Guarantor”), a subsidiary of Basic Energy Services, Inc. (or
its successor), a Delaware corporation (the “Issuer”), the Guarantors (the “Existing
Guarantors”) under the Indenture referred to below, and Wells Fargo Bank, N.A., as trustee
under the Indenture referred to below (the “Trustee”).




W I T N E S S E T H :




          WHEREAS the Issuer has heretofore executed and delivered to the Trustee an Indenture (as such
may be amended from time to time, the “Indenture”), dated as of February 15, 2011 providing
for the issuance of its 73/4% Senior Notes due 2019 (the “Notes”);




          WHEREAS under certain circumstances the Issuer is required to cause the New Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor
shall unconditionally guarantee all of the Issuer’s obligations under the Notes pursuant to a Note
Guarantee on the terms and conditions set forth herein; and




          WHEREAS pursuant to Section 8.01 of the Indenture, the Trustee, the Issuer and the Existing
Guarantors are authorized to execute and deliver this Supplemental Indenture;




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




          1. Definitions. (a) Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.




          (b) For all purposes of this Supplemental Indenture, except as otherwise herein expressly
provided or unless the context otherwise requires: (i) the terms and expressions used herein shall
have the same meanings as corresponding terms and expressions used in the Indenture; and (ii) the
words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental
Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.




          2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally
with all other Guarantors, to guarantee the Issuer’s obligations under the Notes on the terms and
subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other
applicable provisions of the Indenture. From and after the date hereof, the New Guarantor shall be
a Guarantor for all purposes under the Indenture and the Notes.




          3. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as
expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the
terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental
Indenture shall form a part of the Indenture for all purposes, and every Holder heretofore or
hereafter authenticated and delivered shall be bound hereby.







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          4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.




          5. Trustee Makes No Representation. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture
or for or in respect of the recitals contained herein, all of which are made solely by the Issuer.




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




          7. Headings. The headings of this Supplemental Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof, and shall in no way modify
or restrict any of the terms or provisions hereof.








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




	 	 	 	 	 
	 	[NEW GUARANTOR]

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 	BASIC ENERGY SERVICES, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



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	 	EXISTING GUARANTORS:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WELLS FARGO BANK, N.A.,

as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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