Document:

Exhibit
10.12

 

Execution Copy

 

THE SECURITIES
REPRESENTED BY THIS INSTRUMENT WERE ORIGINALLY ISSUED ON MARCH 4, 2004,
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAW.

 

WARRANT

AND REPURCHASE AGREEMENT

	
  Date of Issuance:  March 4, 2004

  	
   

  	
  Certificate No.
  W-3

  

 

FOR VALUE RECEIVED, Sparhawk Laboratories, Inc., a
Missouri corporation (the “Company”), hereby grants to Chemdex, Inc., a
Kansas corporation (the “Purchaser”) (the Purchaser is also referred to
herein as the “Holder”), the right to purchase from the Company
sixty-nine (69) units of the Warrant Equity, subject to adjustment as provided
below, at a price per unit of $1.00 (as adjusted from time to time hereunder,
the “Exercise Price”).  This Warrant
and Repurchase Agreement (the “Warrant”) is issued pursuant to an
Investor Representation Letter, dated as of March 4, 2004 (the “Purchase
Agreement”), between the Company and the Purchaser.

 

The amount and kind of securities obtainable pursuant
to the rights granted hereunder and the purchase price for such securities are
subject to adjustment pursuant to the provisions contained in this Warrant.

 

This Warrant is subject to the following provisions:

 

Section 1.              Exercise of Warrant.

 

1A.          Exercise
Period; Expiration Date.

 

(i)            The
Holder may exercise, in whole or in part, the purchase rights represented by
this Warrant at any time and from time to time beginning on the day after the
fifth anniversary of the Date of Issuance (unless the Warrant expires prior to
such date as provided in Section 1A(ii) hereof) to and including (if
later) the Expiration Date (the “Exercise Period”).  If the Warrant has not expired prior to the day after the fifth
anniversary of the Date of Issuance, then thereafter the Company shall give the
Holder written notice of the expiration of the Exercise Period at least 30 days
but not more than 90 days prior to the end of the Exercise Period.

 

(ii)           This
Warrant shall expire on the earlier of (i) 
the tenth anniversary of the Date of Issuance or (ii)  the date on which all principal, interest,
premiums (if any) and other amounts due in respect of the Unsecured
Subordinated Note have been paid in full (the “Expiration Date”), even
if the Expiration Date precedes the start of the Exercise Period.

 

 

1B.          Exercise
Procedure.

 

(i)            This
Warrant shall be deemed to have been exercised when the Company has received
all of the following items (the “Exercise Time”):

 

(a)           a completed Exercise Agreement, as
described in Section 1C below, executed by the Holder exercising
all or part of the purchase rights represented by this Warrant;

 

(b)           this Warrant; and

 

(c)           a check payable to the Company in an
amount equal to the product of the Exercise Price multiplied by the amount of
Warrant Equity being purchased upon such exercise.

 

(ii)           Certificates
for units of Warrant Equity purchased upon exercise of this Warrant shall be
delivered by the Company to the Holder within 5 Business Days after the date of
the Exercise Time.  Unless this Warrant
has expired or all of the purchase rights represented hereby have been
exercised, the Company shall prepare a new Warrant, substantially identical
hereto, representing the rights formerly represented by this Warrant which have
not expired or been exercised and shall, within such 5-Business Day period,
deliver such new Warrant to the Holder.

 

(iii)          The
Warrant Equity issuable upon the exercise of this Warrant shall be deemed to
have been issued to the Holder at the Exercise Time, and the Holder shall be
deemed for all purposes to have become the record holder of such Warrant Equity
at the Exercise Time.

 

(iv)          The
issuance of certificates for Warrant Equity upon exercise of this Warrant shall
be made without charge to the Holder for any issuance Tax in respect thereof or
other cost incurred by the Company in connection with such exercise and the
related issuance of Warrant Equity. 
Each unit of Warrant Equity issuable upon exercise of this Warrant
shall, upon payment of the Exercise Price therefor, be fully paid and nonassessable
and free from all Taxes and Liens.

 

(v)           The
Company shall not close its books against the transfer of this Warrant or of
any amount of Underlying Warrant Equity in any manner which interferes with the
timely exercise of this Warrant.  If
applicable, the Company shall from time to time take all such action as may be
necessary to assure that the par value per unit of the unissued Warrant Equity
acquirable upon exercise of this Warrant is at all times equal to or less than
the sum of the Exercise Price then in effect and the per unit price paid for
this Warrant.

 

(vi)          The
Company shall assist and cooperate with any Holder required to make any
governmental filings or obtain any governmental approvals prior to or in
connection with any exercise of this Warrant (including, without limitation,
making any filings required to be made by the Company).

 

(vii)         Notwithstanding
any other provision hereof, if an exercise of any portion of this Warrant is to
be made in connection with a sale of the Company, the exercise of any portion
of this Warrant may, at the election of the holder hereof, be conditioned upon
the sale of

 

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the Company, in which case such exercise shall not be deemed to be
effective until the consummation of such transaction.

 

(viii)        The
Company shall at all times reserve and keep available out of its authorized but
unissued units of Warrant Equity solely for the purpose of issuance upon the
exercise of this Warrant, such amount of Warrant Equity issuable upon the
exercise of this Warrant.  The Company
shall take all such actions as may be necessary to assure that all such units
of Warrant Equity may be so issued without violation of any applicable law or
governmental regulation or any requirements of any securities exchange upon
which units of Warrant Equity may be listed (except for official notice of
issuance which shall be immediately delivered by the Company upon each
issuance).  The Company shall not take
any action which would cause the amount of authorized but unissued unites of
Warrant Equity to be less than the amount of such units required to be reserved
hereunder for issuance upon exercise of this Warrant.

 

1C.          Exercise
Agreement.  Upon any exercise of
this Warrant, the Exercise Agreement shall be substantially in the form set
forth in Exhibit I hereto.  Such
Exercise Agreement shall be dated the actual date of execution thereof.

 

1D.          Effect
of Exercise.  Upon exercise of this
Warrant, the Company shall stamp “EXERCISED” on the face of this Warrant and
return the original Warrant to the Holder, it being understood that all of the
Holders’ and the Company’s rights and obligations under this Warrant shall
survive the exercise hereof.

 

Section 2.              Adjustment of Exercise Price and
Number of Units.  In
order to prevent dilution of the rights granted under this Warrant, the
Exercise Price shall be subject to adjustment from time to time as provided in
this Section, and the amount of Warrant Equity obtainable upon exercise of this
Warrant shall be subject to adjustment from time to time as provided in this
Section.

 

2A.          Adjustment
of Exercise Price and Amount of Warrant Equity.

 

(i)            The
initial Exercise Price shall be $1.00 per unit of Warrant Equity.

 

(ii)           If
and whenever on or after the Date of Issuance, the Company issues or sells, or
in accordance with this Section is deemed to have issued or sold, any
units of Warrant Equity for a consideration per unit less than $1,800 (as such
amount is proportionately adjusted for splits, combinations, distributions and
recapitalizations affecting the Warrant Equity after the original date of
issuance of this Warrant, the “Base Price”), then immediately upon such
issue or sale the Exercise Price shall be reduced to the Exercise Price
determined by multiplying the Exercise Price in effect immediately prior to
such issue or sale (or deemed issue or sale) by a fraction, the numerator of
which shall be the sum of (1) the amount of Warrant Equity Deemed Outstanding
immediately prior to such issue or sale (or deemed issue or sale) multiplied by
the Base Price as of the date of such issue or sale (or deemed issue or sale),
plus (2) the consideration, if any, received by the Company upon such issue and
sale (or deemed issue or sale), and the denominator of which shall be the
product derived by multiplying the Base Price

 

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by the amount of Warrant Equity Deemed Outstanding immediately after
such issue or sale (or deemed issue or sale).

 

(iii)          Upon
each such adjustment of the Exercise Price hereunder, the amount of Warrant
Equity acquirable upon exercise of this Warrant shall be adjusted to the amount
of Warrant Equity determined by multiplying the Exercise Price in effect
immediately prior to such adjustment by the amount of Warrant Equity acquirable
upon exercise of this Warrant immediately prior to such adjustment and dividing
the product thereof by the Exercise Price resulting from such adjustment.

 

(iv)          No
adjustment under this Section 2 shall be made in connection with the
issuance of (i) up to 166 units of Warrant Equity to officers, directors or
employees of the Company pursuant to equity incentive plans, (ii) any issuance
of Warrant Equity pursuant to the terms of the warrants issued to C3 pursuant
to the Senior Loan Agreement, (iii) any issuance of Warrant Equity pursuant to
the terms of the warrants issued to Walco pursuant to the Junior Loan
Agreement, (iv) any issuance of Warrant Equity pursuant to this Warrant, and
(v) any issuance of Equity Interests pursuant to the exercise of preemptive
rights granted to Messrs. John U. Bascom and E. Bert Hughes in Section 11
of the Shareholders Agreement; provided, that, the exclusion in this part (v)
shall not be deemed to include the proposed issuance of Equity Interests by the
Company to which such preemptive rights become exercisable.

 

2B.          Effect
on Exercise Price of Certain Events. 
For purposes of determining the adjusted Exercise Price and amount of
Warrant Equity acquirable upon exercise of this Warrant under this Section, the
following shall be applicable:

 

(i)            Issuance
of Rights or Options.  If the
Company in any manner grants or sells any Options and the price per unit for
which Warrant Equity is issuable upon the exercise of such Options, or upon
conversion or exchange of any Convertible Securities issuable upon exercise of
such Options, is less than the Base Price determined immediately prior to such
granting or sale, then immediately upon such issue or sale in effect
immediately prior to the time of the granting or sale of such Options, then the
total maximum amount of Warrant Equity issuable upon the exercise of such
Options, or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options, shall be deemed
to be outstanding and to have been issued and sold by the Company at the time
of the granting or sale of such Option for such price per unit.  For purposes of this paragraph, the “price
per unit for which Warrant Equity is issuable upon exercise of such Options, or
upon conversion or exchange of such Convertible Securities” is determined
by dividing (A) the total amount, if any, received or receivable by the Company
as consideration for the granting or sale of such Options, plus the minimum
aggregate amount of additional consideration payable to the Company upon the
exercise of all such Options, plus in the case of such Options which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the issuance or sale of such
Convertible Securities and the conversion or exchange thereof, by (B) the total
maximum amount of Warrant Equity issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities issuable
upon the exercise of such Options.  No
adjustment under this Section shall be made upon the actual issuance of
such Warrant Equity or of such Convertible Securities upon the

 

4

 

exercise of such Options or upon the actual issuance of such Warrant
Equity upon conversion or exchange of such Convertible Securities.

 

(ii)           Issuance
of Convertible Securities.  If the
Company in any manner issues or sells any Convertible Securities and the price
per unit for which Warrant Equity is issuable upon conversion or exchange
thereof is less than the Base Price determined immediately prior to such
issuance or sale, then the maximum amount of Warrant Equity issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
issuance or sale of such Convertible Securities for such price per unit.  For the purposes of this paragraph, the “price
per unit for which Warrant Equity is issuable upon conversion or exchange
thereof” is determined by dividing (A) the total amount received or
receivable by the Company as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (B) the total maximum amount of Warrant Equity issuable upon the
conversion or exchange of all such Convertible Securities.  No adjustment under this Section shall
be made upon the actual issuance of such Warrant Equity upon conversion or
exchange of such Convertible Securities, and if any such issuance or sale of
such Convertible Securities is made upon exercise of any Options for which
adjustments of the Exercise Price had been or are to be made pursuant to other
provisions of this Section, no further adjustment of the Exercise Price shall
be made by reason of such issue or sale.

 

(iii)          Change
in Option Price or Warrant Rate.  If
the purchase price provided for in any Option, the additional consideration (if
any) payable upon the issuance, conversion or exchange of any Convertible
Security, or the rate at which any Convertible Security is convertible into or
exchangeable for Warrant Equity changes at any time, the Exercise Price in
effect at the time of such change shall be adjusted immediately to the Exercise
Price which would have been in effect at such time had such Option or
Convertible Security originally provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold and the amount of Warrant Equity shall be
correspondingly adjusted; provided, that if such adjustment of the
Exercise Price would result in an increase in the Exercise Price then in
effect, such adjustment shall not be effective until 30 days after written
notice thereof has been given to all Holders. 
For purposes of this Section, if the terms of any Option or Convertible
Security which was outstanding as of the Date of Issuance are changed in the
manner described in the immediately preceding sentence, then such Option or
Convertible Security and the Warrant Equity deemed issuable upon exercise,
conversion or exchange thereof shall be deemed to have been issued as of the
date of such change; provided, that no such change shall at any time
cause the Exercise Price to be increased.

 

(iv)          Treatment
of Expired Options and Unexercised Convertible Securities.  Upon the expiration of any Option or the
termination of any right to convert or exchange any Convertible Securities
without the exercise of such Option or right, the Exercise Price then in effect
and the amount of Warrant Equity acquirable hereunder shall be adjusted
immediately to the Exercise Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Securities, to
the extent outstanding immediately prior to such expiration or termination,
never been issued; provided, that if such expiration or termination
would result in an increase in the Exercise Price then in effect, such increase
shall not be

 

5

 

effective until 30 days after written notice thereof has been given to
all Holders.   For purposes of this
Section, the expiration or termination of any Option or Convertible Security
which was outstanding as of the date of issuance of this Warrant shall not
cause the Exercise Price hereunder to be adjusted unless, and only to the
extent that, a change in the terms of such Option or Convertible Security
caused it to be deemed to have been issued after the date of issuance of this
Warrant.

 

(v)           Calculation
of Consideration Received.  If any
Warrant Equity, Options or Convertible Securities are issued or sold or deemed
to have been issued or sold for cash, the consideration received therefor shall
be deemed to be the net amount received by the Company therefor.  In case any Warrant Equity, Options or
Convertible Securities are issued or sold for a consideration other than cash,
the amount of the consideration other than cash received by the Company shall
be the fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration received by the
Company shall be the Market Price thereof as of the date of receipt.  In case any Warrant Equity, Options or
Convertible Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor shall be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as is
attributable to such Warrant Equity, Options or Convertible Securities, as the
case may be.  The fair value of any
consideration other than cash and securities shall be determined jointly by the
Company and the Majority Warrant Holders. 
If such parties are unable to reach agreement within a reasonable period
of time, such fair value shall be determined by an appraiser jointly selected
by the Company and the Majority Warrant Holders.  The determination of such appraiser shall be final and binding
upon the parties, and the fees and expenses of such appraiser shall be borne by
the Company.

 

(vi)          Integrated
Transactions.  In case any Option or
Convertible Security is issued in connection with the issue or sale of other
Equity Interests of the Company, together comprising one integrated transaction
in which no specific consideration is allocated to such Options or Convertible
Securities by the parties thereto, the Options and Convertible Securities shall
be deemed to have been issued without consideration.

 

(vii)         Treasury
Units.  The amount of Warrant Equity
outstanding at any given time does not include units owned or held by or for
the account of the Company or any of its Subsidiaries, and the disposition of
any units so owned or held shall be considered an issue or sale of Warrant
Equity.

 

(viii)        Record
Date.  If the Company takes a record
of the holders of Warrant Equity for the purpose of entitling them (A) to
receive a Dividend payable in Warrant Equity, Options or in Convertible
Securities or (B) to subscribe for or purchase Warrant Equity, Options or
Convertible Securities, then such record date shall be deemed to be the date of
the issuance or sale of the units of Warrant Equity deemed to have been issued
or sold upon the declaration of such Dividend or the making thereof or the date
of the granting of such right of subscription or purchase, as the case may be.

 

2C.          Subdivision
or Combination of Warrant Equity. 
If the Company at any time subdivides (by any unit split, Dividend or
otherwise) Warrant Equity into a greater amount of

 

6

 

units, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the amount of Warrant Equity
obtainable upon exercise of this Warrant shall be proportionately increased,
and if the Company at any time combines (by reverse unit split or otherwise)
Warrant Equity into a smaller amount of units, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased and
the amount of Warrant Equity obtainable upon exercise of this Warrant shall be
proportionately decreased.

 

2D.          Reorganization,
Reclassification, Consolidation, Merger or Sale.  Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company’s assets
or other transaction, which in each case is effected in such a manner that
holders of Warrant Equity are entitled to receive (either directly or upon
subsequent liquidation) Equity Interests or assets with respect to or in
exchange for Warrant Equity is referred to herein as an “Organic Change.”  Prior to the consummation of any Organic
Change, the Company shall make lawful and adequate provision to insure that the
Holder shall thereafter have the right to acquire and receive, in lieu of or
addition to (as the case may be) Warrant Equity immediately theretofore
acquirable and receivable upon the exercise of this Warrant, such Equity
Interests or assets as may be issued or payable with respect to or in exchange
for the amount of Warrant Equity immediately theretofore acquirable and
receivable upon exercise of this Warrant had such Organic Change not taken
place.  In any such case, appropriate
provision shall be made with respect to the Holder’s rights and interests to
insure that all of the provisions of this Warrant shall thereafter continue to
be applicable in relation to any Equity Interests or assets thereafter
deliverable upon the exercise of the Warrants (including, in the case of any
such consolidation, merger or sale in which the successor entity or purchasing
entity is other than the Company, an immediate adjustment of the Exercise Price
to the value for the Warrant Equity reflected by the terms of such
consolidation, merger or sale, and a corresponding immediate adjustment in the
amount of Warrant Equity acquirable and receivable upon exercise of the
Warrants, if the value so reflected is less than the Base Price in effect
immediately prior to such consolidation, merger or sale). The Company shall not
effect any such consolidation, merger or sale, unless prior to the consummation
thereof, the successor entity (if other than the Company) resulting from
consolidation or merger or the entity purchasing such assets assumes by written
instrument, the obligation to deliver to the Holder such Equity Interests or
assets as, in accordance with the foregoing provisions, the Holder may be
entitled to acquire.

 

2E.           Certain
Events.  If any event occurs of the
type contemplated by the provisions of this Section but not expressly
provided for by such provisions (including, without limitation, the granting of
equity appreciation rights, phantom equity rights or other rights with equity
features), then the Company’s board of directors shall make an appropriate
adjustment in the Exercise Price and the amount of Warrant Equity obtainable
upon exercise of this Warrant so as to protect the rights of the Holder; provided,
that no such adjustment shall increase the Exercise Price as otherwise
determined pursuant to this Section or decrease the amount of Warrant
Equity issuable upon exercise of this Warrant.

 

2F.           No
Avoidance.  In the event the Company
shall enter into any transaction for the purpose of avoiding the provisions of
this Section, the benefits provided by such provisions shall nevertheless apply
and be preserved.

 

7

 

2G.          Notices.

 

(i)            Immediately
upon any adjustment of the Exercise Price and the amount of Warrant Equity
obtainable upon exercise of this Warrant, the Company shall send written notice
thereof to the Holder, setting forth in reasonable detail and certifying the
calculation of such adjustment.

 

(ii)           The
Company shall send written notice to the Holder at least 20 days prior to the
date on which the Company closes its books or takes a record (A) with respect
to any Dividend upon the Warrant Equity, (B) with respect to any offer to
holders of Warrant Equity or (C) for determining rights to vote with respect to
any Organic Change, dissolution or liquidation.

 

(iii)          The
Company shall also give at least 20 days prior written notice of the date on
which any Organic Change, dissolution or liquidation shall take place.

 

Section 3.              Liquidating Dividends.  If the Company declares or makes a Dividend
upon the Warrant Equity, except for a Dividend payable in Warrant Equity (a “Liquidating
Dividend”), then the Company shall pay to the Holder at the time of payment
thereof the Liquidating Dividend which would have been paid to the Holder on
the Warrant Equity had this Warrant been fully converted immediately prior to
the date on which a record is taken for such Liquidating Dividend, or, if no
record is taken, the date as of which the record holders of Warrant Equity
entitled to such Dividends are to be determined.

 

Section 4.              No Preemptive Rights.  The Holder of this Warrant does not have any
preemptive rights or similar right with respect to any issuance of Equity
Interests by the Company.

 

Section 5.              No Adjustment of Number of Units
of Outstanding Warrant Equity.  In connection with any adjustment pursuant to Section 2
which would have the effect of increasing the amount of Warrant Equity which
would be issuable upon exercise of this Warrant (assuming for this purpose that
no portion of this Warrant had been exercised), the Company shall not make any
adjustment to the amount of Warrant Equity previously obtained upon any
exercise of this Warrant.

 

Section 6.              Put Arrangement.

 

6A.          Put
Right.  Subject to the provisions of
Section 6E and 6F, the Holder of Underlying Warrant Equity shall have the
right to put all, but not less than all, of the Underlying Warrant Equity then
held by the Holder (“Warrant Put”) at the Put Price by delivering a
written notice (the “Put Notice”) to the Company.

 

6B.          Determination
of Put Price.  Upon the delivery of
the Put Notice, the Company and the Holder shall promptly (and in any event
within 10 Business Days after the delivery date or the Put Notice) meet for the
purpose of calculating the Put Price. 
The Company will be obligated to purchase all the Holder’s Underlying
Warrant Equity at a mutually agreeable time and place which will in no event be
later than 90 days after the date of the delivery of the Put Notice (the “Put
Closing”).

 

6C.          Put
Closing.  At any Put Closing, the
Holder shall deliver to the Company certificates representing the Underlying
Warrant Equity held by the Holder and the Company

 

8

 

shall deliver to the Holder the product of (i) the Put Price multiplied
by (ii) the number of units of the Holder’s Underlying Warrant Equity by
cashier’s or certified check or wire transfer of immediately available funds
payable to such holder.  The Company
will undertake Diligent Efforts (as defined below) during the 120-day period
immediately following the delivery date of the Put Notice to finance the
payment of the aggregate Put Price in accordance with this Section so that
the aggregate Put Price for all of the Holder’s Underlying Warrant Equity may
be paid in full in cash, but only to the extent such financing can be obtained
on commercially reasonable terms.  Such
diligent efforts (“Diligent Efforts”) shall include, but shall not be
limited to, pursuing private or public offerings of equity or debt securities,
restructuring of any Borrower’s debt and other recapitalizations.  In the event that, notwithstanding such
Diligent Efforts, the Company is unable to purchase all of the Holder’s
Underlying Warrant Equity at the Put Closing in cash within such 120-day
period, the Company will at the Put Closing pay the maximum portion of the
aggregate Put Price for all of the Holder’s Underlying Warrant Equity which it
is legally able to pay in cash and pay the remaining portion of the aggregate
Put Price for such other Underlying Warrant Equity which it is not able to pay
in cash by issuing to the Holder a promissory note (the “Put Notes”)
accruing interest at an annual rate equal to 13% per annum (payable monthly)
and payable on demand; provided, however, that such Put Notes shall be
subordinate in right of payment to all indebtedness of the Company to its
secured lenders, on substantially the same terms and conditions as set forth in
the Subordination Agreement with respect to the Unsecured Subordinated
Note.  After the Put Closing, the
Company will continuously undertake Diligent Efforts to arrange debt and/or
equity financing in order to retire Put Notes for cash and will provide to the
Holder of such Put Notes any information regarding the Company’s efforts to
obtain such financing as is reasonably requested by the Holder of Put Notes.

 

6D.          Legal
Prohibitions.  The Company shall not
be required to pay cash or property to repurchase Underlying Warrant Equity to
the extent the sole reason for not doing so is that it is prohibited from doing
so under applicable law due to a lack of surplus; provided, that the
Company will take all reasonable steps necessary to make such payments under
this Section, including without limitation reducing its capital and/or
increasing its net assets (by re-appraisal or otherwise).  The Company shall deliver an Officer’s
Certificate to the holder that specifies the provision of law on account of
which the Company is so precluded from making such payment and the action that
the Company is taking to remedy the same.

 

6E.           Recission
of Put Notice.  Notwithstanding
anything contained herein to the contrary, if the Company is not able to pay
the aggregate Put Price for all of the Holder’s Underlying Warrant Equity in
full in cash within 120 days after the delivery of a Put Notice, the Holder may
rescind the exercise of the Warrant Put by delivering written notice to the
Company within 30 days after the Company notifies the Holder that it will be
unable to pay the aggregate Put Price in full in cash.  If the Company fails to satisfy its
obligations pursuant to this Section the Holder may pursue any and all
rights and remedies at law or in equity.

 

6F.           Covenant
Required to Exercise Put Option. 
Notwithstanding anything contained herein to the contrary, the Holder
may not exercise the Put Option without the consent of Commerce, so long as the
Company has a loan outstanding that is guaranteed by the Small Business
Administration (the “SBA”) under its § 7A program.

 

9

 

Section 7.              Call Arrangement for Underlying
Warrant Equity.

 

7A.          Call
Right.  At any time after the fifth
anniversary of the Date of Issuance, subject to Section 7D, the Company
will have the right to purchase on one occasion only (the “Warrant Call”)
all, but not less than all, of the Underlying Warrant Equity then held by the
Holder at the Call Price by giving written notice thereof (the “Call Notice”)
to the Holder of the Underlying Warrant Equity; provided, however,
that the Company may exercise the Warrant Call once and only once (and any
delivery of a Call Notice hereunder will be deemed to be an exercise of the
Call).  The Call Notice shall state the
time and place at which the Company will repurchase the Holder’s Underlying
Warrant Equity (which shall in no event be later than 90 days following
delivery of the Call Notice) (the “Call Closing”).

 

7B.          Determination
of Call Price.  Upon delivery of the
Call Notice, the Company and the Holder shall promptly (and in any event within
10 days after the delivery of the Call Notice) meet for the purpose of
calculating the Call Price.  Promptly
upon determination of the Call Price and in no event less than 15 days prior to
the date of the Call Closing, the Company will notify the Holder of the
Underlying Warrant Equity of the Call Price.

 

7C.          Call
Closing.  At the Call Closing the
Company will be obligated to purchase all of the Holder’s Underlying Warrant
Equity.  At the Call Closing the Holder
of the Underlying Warrant Equity shall deliver to the Company certificates
representing units of Underlying Warrant Equity or the Warrant held by the
Holder, as applicable, and the Company shall deliver to the Holder the product
of (x) the Call Price multiplied by (y) the number of units of Underlying
Warrant Equity subject to the Call Notice by cashier’s or certified check
payable to the Holder or by wire transfer of immediately available funds to an
account designated by the Holder. In the event that the Company is unable or
fails for any reason, to consummate the purchase of all of the Holder’s
Underlying Warrant Equity for cash on the terms and within the time periods set
forth herein, the Company’s Call rights under this Section will
automatically terminate.

 

7D.          Required
Consents.  As long as either the
Senior Subordinated Debt or the Junior Subordinated Debt is outstanding, the
Company may not exercise the Warrant Call without the written consent of C3
and/or Walco, respectively.

 

Section 8.              Definitions. 
The following terms have meanings set forth below:

 

“Affiliate” of any particular party means:  (i) any other party which directly or
indirectly, controls or is controlling by or is under common control with such
party and (ii) any officer, director, manager, managing partner or member of
such party or any other party holding a similar position with respect to such
party.  A party shall be deemed to be “controlled
by” any other party if such other party possesses, directly or indirectly,
power to vote 50% or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors, managers or managing
partners or power to direct or cause the direction of the management and
policies of such party whether by contract or otherwise.

 

“C3” means C3 Capital Partners, L.P., a
Delaware limited partnership, and its successors.

 

10

 

“Call Price” means, with respect to any unit of
Underlying Warrant Equity, 5 times the Company’s Weighted Average EBITDA,
divided by the sum of the total amount of Warrant Equity outstanding as of the
delivery date of the Call Notice for which the determination of the Call Price
is being made plus the amount of Warrant Equity issuable upon exercise or
conversion of any Options or Convertible Securities as of such date, in each
case calculated as of such date. The expenses of determining the Call Price at
any time shall be borne by the Company.

 

“Commerce” means Commerce Bank, N.A., a
national bank, and its successors.

 

“Common Equity” means, collectively, the
Company’s common stock, par value $1.00 per share, and any equity securities of
any class or series of the Company hereafter authorized or otherwise created
that is not limited to a fixed sum or percentage of par or stated value in
respect of the rights of the holders thereof to participate in Dividends.

 

“Convertible Securities” of a Person means any
securities (directly or indirectly) convertible into or exchangeable for any
Equity Interest of such Person, including, without limitation, all warrants,
options and other rights to acquire any Equity Interests of such Person.

 

“Dividend” means any distribution by a Person
with respect to its Equity Interests whether in cash, securities (including
common and preferred equity) or other property, including, without limitation,
distributions upon any liquidation, dissolution or winding up of such Person.

 

“EBITDA” with respect to any computation
period, means the consolidated net income of the Company and its Subsidiaries
for such computation period, as determined in accordance with GAAP; provided,
that to the extent consistent with GAAP, all accounting principles (including
all practices and valuation and estimation methodologies) historically used by
the Company and its Subsidiaries, shall be used in connection with the
determination of EBITDA, plus, to the extent deducted in the determining such
consolidated net income, (x) the amount of foreign, federal, state and local
income and franchise Taxes and other Taxes of the Company and its Subsidiaries
for such fiscal year, (y) the amount of interest expense for Indebtedness for
such computation period and (z) the amount of depreciation, amortization and
similar non-cash charges for such computation period; EBITDA shall exclude (i)
gains or losses from asset sales outside of the ordinary course of business,
(ii) transition or severance costs, if any, incurred in connection with the transactions
contemplated in the Acquisition Agreement or (iii) other non-recurring items
(but shall include insurance proceeds for business interruption).

 

“Equity Interests” means all of the equity or
other ownership interests in a Person (including, without limitation,
Convertible Securities and other rights containing phantom or other equity
participation features).

 

“Junior Loan Agreement” means the Securities
Purchase Agreement, dated March 4, 2004, between the Company and Walco.

 

“Junior Subordinated Debt” shall mean the
$1,000,000 junior subordinated note, dated March 4, 2004, issued by the
Company to Walco, as amended or modified from time to time, including any
successor to or replacement of such note.

 

11

 

“Market Price” of any Equity Interest means the
average of the closing prices of such Equity Interest’s sales on all securities
exchanges on which such security may at the time be listed, or, if there has
been no sales on any such exchange on any day, the average of the highest bid
and lowest asked prices on all such exchanges at the end of such day, or, if on
any day such Equity Interest is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ System as of 4:00 P.M.,
New York time, or, if on any day such Equity Interest is not quoted in the
NASDAQ System, the average of the highest bid and lowest asked prices on such
day in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of 21 days consisting of the day as of which “Market
Price” is being determined and the 20 consecutive Business Days prior to
such day.  If at any time such Equity
Interest is not listed on any securities exchange or quoted in the NASDAQ
System or the over-the-counter market, the “Market Price” shall be the
fair value thereof determined jointly by the Company and the Holder.  If such parties are unable to reach
agreement within a reasonable period of time, such fair value shall be
determined by an appraiser jointly selected by the Company and the Holder
reasonably skilled in valuing securities of this type. The determination of the
“Market Price” of Warrant Equity or Underlying Warrant Equity (as
applicable) pursuant to Section 2 shall be made assuming that the
Company is a going concern and such sale is made between a willing buyer and a
willing seller and taking into account all relevant factors determinative of
value without regard to any discount for any lack of liquidity attributable to
a lack of a public market for such security, any block discount or discount
attributable to the size of any Person’s holdings of such security or any
minority interest or any voting rights thereof or lack thereof. The
determination of such appraiser shall be final and binding upon the parties,
and the fees and expenses of such appraiser shall be borne by the Company.

 

“Options” means any right or options to
subscribe for the purchase of Warrant Equity or Convertible Securities.

 

“Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a  joint stock company, a trust, a joint
venture, an unincorporated organization, a governmental entity or any department,
agency or political subdivision thereof and any other entity.

 

“Put Price” means, with respect to any unit of
Underlying Warrant Equity, 4 times the Company’s Weighted Average EBITDA, divided
by the sum of the total amount of Warrant Equity outstanding as of the
delivery date of the Put Notice for which the determination of the Put Price is
being made plus the amount of Warrant Equity issuable upon exercise or
conversion of any Options or Convertible Securities as of such date, in each
case calculated as of such date.  The
expenses of determining the Put Price at any time shall be borne by the
Company.

 

“Senior Loan Agreement” means the Securities
Purchase Agreement, dated March 4, 2004, between the Company and C3.

 

“Senior Subordinated Debt” shall mean the
$1,300,000 senior subordinated note, dated March 4, 2004, issued by the
Company to C3, as amended or modified from time to time, including any
successor to or replacement of such note.

 

12

 

“Shareholders Agreement” means the Shareholders
Agreement, dated March 4, 2004, among the Company, the Shareholders, C3
and Walco.

 

“Subordination Agreement” means the
Subordination Agreement, dated March 4, 2004, by and among Commerce, C3,
Walco, the Purchaser and the Company.

 

“Underlying Warrant Equity” means (i) the
Warrant Equity issued or issuable upon exercise of the Warrants and (ii) any
Equity Interests issued or issuable with respect to the securities referred to
in clause (i) by way of Dividend or equity split or in connection with a
combination of units, recapitalization, merger, consolidation or other
reorganization.  For purposes hereof,
any Person who holds this Warrant shall be deemed to be the holder of the Underlying
Warrant Equity obtainable upon exercise of this Warrant in connection with the
transfer thereof or otherwise regardless of any restriction or limitation on
the exercise of this Warrant, such Underlying Warrant Equity shall be deemed to
be in existence, and such Person shall be entitled to exercise the rights of a
holder of Underlying Warrant Equity hereunder. 
As to any particular units of Underlying Warrant Equity, such units
shall cease to be Underlying Warrant Equity when they have been repurchased by
the Company.

 

“Unsecured Subordinated Note” shall mean
the $350,000 unsecured subordinated note, dated March 4, 2004, issued by
the Company to the Purchaser.

 

“Walco” means Walco International, Inc., a
California corporation, and its successors.

 

“Warrant Equity” means units of the Company’s
authorized but unissued Common Equity; provided, that if there is a
change such that the Equity Interests issuable upon exercise of the Warrants
are issued by a Person other than the Company or there is a change in the class
of Equity Interests so issuable, then the term “Warrant Equity” shall
mean the smallest unit in which such Equity Interest is issuable.

 

“Warrant Equity Deemed Outstanding” means, at
any given time, the amount of Warrant Equity actually outstanding at such time,
plus the amount of Warrant Equity deemed to be outstanding pursuant to Sections
2B(i) and 2B(ii), regardless of whether or not the Options and
Convertible Securities are actually exercisable at such time, but excluding any
Warrant Equity issuable upon the exercise of the Warrant.

 

“Weighted Average EBITDA” means the weighted
average EBITDA for the 36 months prior to the month in which the Call Notice or
the a Put Notice is delivered (“Month of Exercise”) calculated as (x)
the sum of (A) 3 times the EBITDA for months 25-36 preceding the Month of
Exercise, (B) 4 times the EBITDA for months 13-24 preceding the Month of
Exercise, and (C) 5 times the EBITDA for months 1-12 preceding the Month of
Exercise, divided by (y) 12.

 

“Working Capital” means current assets,
including cash, receivables, and inventory less current liabilities
(excluding the current portion of third party debt), including payables and
accruals.

 

Section 9.              No Voting Rights; Limitations of
Liability.  This
Warrant shall not entitle the holder hereof to any voting rights or other
rights as an equityholder of the Company.

 

13

 

No provision hereof, in the absence of affirmative action by the Holder
to purchase Warrant Equity, and no enumeration herein of the rights or privileges
of the Holder shall give rise to any liability of such holder for the Exercise
Price for Underlying Warrant Equity or as an equityholder of the Company.

 

Section 10.            Warrant Not Transferable.  This Warrant and all rights hereunder are
not transferable, in whole or in part, by the Holder, provided, however,
that with prior notice to the Company, the Holder may transfer the Warrant, in
whole but not in part, to an Affiliate of the Holder.

 

Section 11.            Warrant Not Exchangeable for
Different Denominations. 
Because this Warrant is not transferable, this Warrant is not
exchangeable for new Warrants of like tenor representing in the aggregate the
purchase rights hereunder, provided, however, that if the Holder
transfers the Warrant to an Affiliate as provided by Section 10, then upon
surrender of this Warrant a new Warrant will be issued in the name of such
Affiliate (with the Date of Issuance unchanged).

 

Section 12.            Replacement.  Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Holder shall be satisfactory)
of the ownership and the loss, theft, destruction or mutilation of the
certificate evidencing this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the Company
or, in the case of any such mutilation upon surrender of such certificate, the
Company shall (at its expense) execute and deliver, in lieu thereof, a new
certificate of like kind representing the same rights represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.

 

Section 13.            Notices.  Except as otherwise expressly provided
herein, all notices referred to in this Warrant shall be in writing and shall
be delivered personally, sent by reputable overnight courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or deposited in the U.S. Mail (i) to the Company, at its principal executive
offices and (ii) to the Holder, at the Holder’s address as it appears in the
records of the Company (unless otherwise indicated by the Holder).

 

Section 14.            Amendment and Waiver.  Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the Holder.

 

Section 15.            Governing Law.  This Warrant shall be governed and construed
in accordance with the laws of the State of Missouri, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Missouri or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Missouri.

 

Section 16.            Survival.  The provisions of this Warrant which by
their nature survive the expiration, termination, cancellation or exercise of
the rights granted herein shall survive in accordance with their terms.

 

14

 

Section 17.            Construction. The
Company and the Purchaser have participated jointly in the negotiation and
drafting of this Warrant.  In the event
an ambiguity or question of intent or interpretation arises, this Warrant shall
be construed as if drafted jointly by the Company and the Purchaser, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Warrant.

 

 

[Remainder
of page intentionally left blank; signature page follows]

 

15

 

IN WITNESS
WHEREOF, the Company has executed and delivered this Warrant on the date first
written above.

 

 

	
   

  	
  SPARHAWK
  LABORATORIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  \s\ E. Bert Hughes

  	
   

  
	
   

  	
   

  	
  Name:

  	
  E. Bert Hughes

  
	
   

  	
   

  	
  Title:

  	
  President

  
					

 

16

 

Execution Copy

 

EXHIBIT I

 

EXERCISE AGREEMENT

 

	
  To:                                                     

  	
   

  	
  Dated:                                        ,
               

  

 

The undersigned,
pursuant to the provisions set forth in the attached Warrant (Certificate No.
W-            ),
hereby agrees to subscribe for the purchase of
                
units of the Warrant Equity covered by such Warrant and makes payment herewith
in full therefor at the price per unit provided by such Warrant:

 

 

	
   

  	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
  AddressExhibit 4.1

 

 

CURATIVE
HEALTH SERVICES, INC.,

as
Issuer,

 

the
GUARANTORS named herein,

as
Guarantors,

 

and

 

Wells
Fargo Bank, N.A.,

as
Trustee

 

 

INDENTURE

 

 

Dated
as of April 23, 2004

 

 

103⁄4%
Senior Notes due 2011

 

 

 

CROSS-REFERENCE
TABLE

 

	
  Trust Indenture Act

  	
  Indenture

  
	
  Section

  	
  Section

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
  7.10

  
	
   

  	
  (a)(2)

  	
  7.10

  
	
   

  	
  (a)(3)

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
  7.08; 7.10

  
	
   

  	
  (b)

  	
  7.08; 7.10; 11.02

  
	
   

  	
  (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)

  	
  4.06; 4.19, 4.22; 11.02

  
	
   

  	
  (b)

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
  7.02;
  11.04; 11.05

  
	
   

  	
  (c)(2)

  	
  7.02;
  11.04; 11.05

  
	
   

  	
  (c)(3)

  	
  N.A.

  
	
   

  	
  (d)

  	
  N.A.

  
	
   

  	
  (e)

  	
  11.05

  
	
   

  	
  (f)

  	
  N.A.

  
	
  315

  	
  (a)

  	
  7.01(b);
  7.02(a)

  
	
   

  	
  (b)

  	
  7.05;
  11.02

  
	
   

  	
  (c)

  	
  7.01

  
	
   

  	
  (d)

  	
  6.05;
  7.01(c)

  
	
   

  	
  (e)

  	
  6.11

  
	
  316

  	
  (a)(last
  sentence)

  	
  2.09

  
	
   

  	
  (a)(1)(A)

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
  6.04

  
	
   

  	
  (a)(2)

  	
  9.02

  
	
   

  	
  (b)

  	
  6.07

  
	
   

  	
  (c)

  	
  9.04,
  9.05

  
	
  317

  	
  (a)(1)

  	
  6.08

  
	
   

  	
  (a)(2)

  	
  6.09

  
	
   

  	
  (b)

  	
  2.04

  
	
  318

  	
  (a)

  	
  11.01

  
	
   

  	
  (c)

  	
  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

 

ARTICLE
ONE

 

DEFINITIONS
AND INCORPORATION BY REFERENCE

 

	
  SECTION 1.01.

  	
  Definitions

  	
   

  
	
  SECTION 1.02.

  	
  Other Definitions

  	
   

  
	
  SECTION 1.03.

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  
	
  SECTION 1.04.

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  	
   

  
	
   

  	
   

  	
   

  
	
  THE NOTES

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01.

  	
  Form and Dating

  	
   

  
	
  SECTION 2.02.

  	
  Execution,
  Authentication and Denomination; Additional Notes; Exchange Notes

  	
   

  
	
  SECTION 2.03.

  	
  Registrar and Paying Agent

  	
   

  
	
  SECTION 2.04.

  	
  Paying Agent To
  Hold Assets in Trust

  	
   

  
	
  SECTION 2.05.

  	
  Holder Lists

  	
   

  
	
  SECTION 2.06.

  	
  Transfer and Exchange

  	
   

  
	
  SECTION 2.07.

  	
  Replacement Notes

  	
   

  
	
  SECTION 2.08.

  	
  Outstanding Notes

  	
   

  
	
  SECTION 2.09.

  	
  Treasury Notes

  	
   

  
	
  SECTION 2.10.

  	
  Temporary Notes

  	
   

  
	
  SECTION 2.11.

  	
  Cancellation

  	
   

  
	
  SECTION 2.12.

  	
  Defaulted Interest

  	
   

  
	
  SECTION 2.13.

  	
  CUSIP and ISIN Numbers

  	
   

  
	
  SECTION 2.14.

  	
  Deposit of Moneys

  	
   

  
	
  SECTION 2.15.

  	
  Book-Entry
  Provisions for Global Notes

  	
   

  
	
  SECTION 2.16.

  	
  Special
  Transfer and Exchange Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  	
   

  
	
   

  	
   

  	
   

  
	
  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Notices to Trustee

  	
   

  
	
  SECTION 3.02.

  	
  Selection of Notes To
  Be Redeemed

  	
   

  
	
  SECTION 3.03.

  	
  Notice of Redemption

  	
   

  
	
  SECTION 3.04.

  	
  Effect of Notice of
  Redemption

  	
   

  
	
  SECTION 3.05.

  	
  Deposit of Redemption Price

  	
   

  
	
  SECTION 3.06.

  	
  Notes Redeemed in Part

  	
   

  

 

i

 

	
  ARTICLE FOUR

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Payment of Notes

  	
   

  
	
  SECTION 4.02.

  	
  Maintenance of Office
  or Agency

  	
   

  
	
  SECTION 4.03.

  	
  Corporate Existence

  	
   

  
	
  SECTION 4.04.

  	
  Payment of Taxes

  	
   

  
	
  SECTION 4.05.

  	
  Maintenance of
  Properties and Insurance

  	
   

  
	
  SECTION 4.06.

  	
  Compliance
  Certificate; Notice of Default

  	
   

  
	
  SECTION 4.07.

  	
  Conduct of Business

  	
   

  
	
  SECTION 4.08.

  	
  Waiver of Stay,
  Extension or Usury Laws

  	
   

  
	
  SECTION 4.09.

  	
  Change of Control

  	
   

  
	
  SECTION 4.10.

  	
  Excess Cash Flow Offer

  	
   

  
	
  SECTION 4.11.

  	
  Limitations on
  Additional Indebtedness

  	
   

  
	
  SECTION 4.12.

  	
  Limitations on
  Layering Indebtedness

  	
   

  
	
  SECTION 4.13.

  	
  Limitations on
  Restricted Payments

  	
   

  
	
  SECTION 4.14.

  	
  Limitations
  on Dividend and Other Restrictions Affecting Restricted Subsidiaries

  	
   

  
	
  SECTION 4.15.

  	
  Limitations
  on Transactions with Affiliates

  	
   

  
	
  SECTION 4.16.

  	
  Limitations on Liens

  	
   

  
	
  SECTION 4.17.

  	
  Limitations on Asset Sales

  	
   

  
	
  SECTION 4.18.

  	
  Limitations
  on Designation of Unrestricted Subsidiaries

  	
   

  
	
  SECTION 4.19.

  	
  Limitations
  on Sale and Leaseback Transactions

  	
   

  
	
  SECTION 4.20.

  	
  Limitations
  on the Issuance or Sale of Equity Interests of Restricted Subsidiaries

  	
   

  
	
  SECTION 4.21.

  	
  Additional Note Guarantees

  	
   

  
	
  SECTION 4.22.

  	
  Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  	
   

  
	
   

  	
   

  	
   

  
	
  SUCCESSOR
  CORPORATION

  	
   

  
	
   

  	
   

  
	
  SECTION 5.01.

  	
  Mergers, Consolidations,
  Etc

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFAULT
  AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION 6.01.

  	
  Events of Default

  	
   

  
	
  SECTION 6.02.

  	
  Acceleration

  	
   

  
	
  SECTION 6.03.

  	
  Other Remedies

  	
   

  
	
  SECTION 6.04.

  	
  Waiver of Past Defaults

  	
   

  
	
  SECTION 6.05.

  	
  Control by Majority

  	
   

  
	
  SECTION 6.06.

  	
  Limitation on Suits

  	
   

  
	
  SECTION 6.07.

  	
  Rights of Holders
  To Receive Payment

  	
   

  

 

ii

 

	
  SECTION 6.08.

  	
  Collection Suit by Trustee

  	
   

  
	
  SECTION 6.09.

  	
  Trustee May File
  Proofs of Claim

  	
   

  
	
  SECTION 6.10.

  	
  Priorities

  	
   

  
	
  SECTION 6.11.

  	
  Undertaking for Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  	
   

  
	
   

  	
   

  	
   

  
	
  TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 7.01.

  	
  Duties of Trustee

  	
   

  
	
  SECTION 7.02.

  	
  Rights of Trustee

  	
   

  
	
  SECTION 7.03.

  	
  Individual Rights of
  Trustee

  	
   

  
	
  SECTION 7.04.

  	
  Trustee’s Disclaimer

  	
   

  
	
  SECTION 7.05.

  	
  Notice of Default

  	
   

  
	
  SECTION 7.06.

  	
  Reports by Trustee to
  Holders

  	
   

  
	
  SECTION 7.07.

  	
  Compensation and Indemnity

  	
   

  
	
  SECTION 7.08.

  	
  Replacement of Trustee

  	
   

  
	
  SECTION 7.09.

  	
  Successor Trustee by
  Merger, Etc

  	
   

  
	
  SECTION 7.10.

  	
  Eligibility;
  Disqualification

  	
   

  
	
  SECTION 7.11.

  	
  Preferential
  Collection of Claims Against the Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  	
   

  
	
   

  	
   

  	
   

  
	
  DISCHARGE OF
  INDENTURE; DEFEASANCE

  	
   

  
	
   

  	
   

  
	
  SECTION 8.01.

  	
  Termination of
  the Issuer’s Obligations

  	
   

  
	
  SECTION 8.02.

  	
  Legal
  Defeasance and Covenant Defeasance

  	
   

  
	
  SECTION 8.03.

  	
  Conditions
  to Legal Defeasance or Covenant Defeasance

  	
   

  
	
  SECTION 8.04.

  	
  Application of Trust Money

  	
   

  
	
  SECTION 8.05.

  	
  Repayment to the Issuer

  	
   

  
	
  SECTION 8.06.

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  	
   

  
	
   

  	
   

  	
   

  
	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  
	
  SECTION 9.01.

  	
  Without Consent of Holders

  	
   

  
	
  SECTION 9.02.

  	
  With Consent of Holders

  	
   

  
	
  SECTION 9.03.

  	
  Compliance with
  the Trust Indenture Act

  	
   

  
	
  SECTION 9.04.

  	
  Revocation and Effect
  of Consents

  	
   

  
	
  SECTION 9.05.

  	
  Notation on or
  Exchange of Notes

  	
   

  
	
  SECTION 9.06.

  	
  Trustee To Sign
  Amendments, Etc

  	
   

  

 

iii

 

	
  ARTICLE TEN

  	
   

  
	
   

  	
   

  	
   

  
	
  NOTE GUARANTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 10.01.

  	
  Unconditional Guarantee

  	
   

  
	
  SECTION 10.02.

  	
  Limitation on
  Guarantor Liability

  	
   

  
	
  SECTION 10.03.

  	
  Execution and
  Delivery of Note Guarantee

  	
   

  
	
  SECTION 10.04.

  	
  Release of a
  Subsidiary Guarantor

  	
   

  
	
  SECTION 10.05.

  	
  Waiver of Subrogation

  	
   

  
	
  SECTION 10.06.

  	
  Immediate Payment

  	
   

  
	
  SECTION 10.07.

  	
  No Setoff

  	
   

  
	
  SECTION 10.08.

  	
  Guarantee Obligations
  Absolute

  	
   

  
	
  SECTION 10.09.

  	
  Note Guarantee
  Obligations Continuing

  	
   

  
	
  SECTION 10.10.

  	
  Note Guarantee
  Obligations Not Reduced

  	
   

  
	
  SECTION 10.11.

  	
  Note Guarantee
  Obligations Reinstated

  	
   

  
	
  SECTION 10.12.

  	
  Note Guarantee
  Obligations Not Affected

  	
   

  
	
  SECTION 10.13.

  	
  Waiver

  	
   

  
	
  SECTION 10.14.

  	
  No
  Obligation to Take Action Against the Issuer

  	
   

  
	
  SECTION 10.15.

  	
  Dealing with the
  Issuer and Others

  	
   

  
	
  SECTION 10.16.

  	
  Default and Enforcement

  	
   

  
	
  SECTION 10.17.

  	
  Acknowledgment

  	
   

  
	
  SECTION 10.18.

  	
  Costs and Expenses

  	
   

  
	
  SECTION 10.19.

  	
  No Merger or
  Waiver; Cumulative Remedies

  	
   

  
	
  SECTION 10.20.

  	
  Survival of Note
  Guarantee Obligations

  	
   

  
	
  SECTION 10.21.

  	
  Note
  Guarantee in Addition to Other Guarantee Obligations

  	
   

  
	
  SECTION 10.22.

  	
  Severability

  	
   

  
	
  SECTION 10.23.

  	
  Successors and Assigns

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 11.01.

  	
  Trust Indenture Act
  Controls

  	
   

  
	
  SECTION 11.02.

  	
  Notices

  	
   

  
	
  SECTION 11.03.

  	
  Communications
  by Holders with Other Holders

  	
   

  
	
  SECTION 11.04.

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  
	
  SECTION 11.05.

  	
  Statements
  Required in Certificate or Opinion

  	
   

  
	
  SECTION 11.06.

  	
  Rules by Paying
  Agent or Registrar

  	
   

  
	
  SECTION 11.07.

  	
  Legal Holidays

  	
   

  
	
  SECTION 11.08.

  	
  Governing Law

  	
   

  
	
  SECTION 11.09.

  	
  No
  Adverse Interpretation of Other Agreements

  	
   

  
	
  SECTION 11.10.

  	
  No Recourse Against Others

  	
   

  
	
  SECTION 11.11.

  	
  Successors

  	
   

  
	
  SECTION 11.12.

  	
  Duplicate Originals

  	
   

  
	
  SECTION 11.13.

  	
  Severability

  	
   

  

 

iv

 

	
  SIGNATURES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  –

  	
  Form of Note

  
	
  Exhibit B

  	
  –

  	
  Form of Legends

  
	
  Exhibit C

  	
  –

  	
  Form
  of Certificate To Be Delivered in Connection with Transfers to Non-QIB
  Accredited Investors

  
	
  Exhibit D

  	
  –

  	
  Form
  of Certificate To Be Delivered in Connection with Transfers Pursuant to
  Regulation S

  
	
  Exhibit E

  	
  –

  	
  Form of
  Notation of Subsidiary Guarantee

  

 

Note:                   This Table of Contents shall not, for any
purpose, be deemed to be part of this Indenture.

 

v

 

INDENTURE dated as of April
23, 2004 among Curative Health Services, Inc., a Minnesota corporation (the “Issuer”), and each of the Guarantors named
herein, as Guarantors, and Wells Fargo Bank, N.A., as Trustee (the “Trustee”).

 

The Issuer has duly
authorized the creation of an issue of 103⁄4% Senior Notes due 2011 and, to
provide therefor, the Issuer and the Guarantors have 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 and binding
obligations of the Issuer and to make this Indenture a valid and binding
agreement of the Issuer and the Guarantors have been done.

 

For and in consideration of
the premises and the purchase of the Notes by the Holders thereof, the parties
hereto covenant and agree, for the equal and proportionate benefit of all
Holders, as follows:

 

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01.                                              Definitions.

 

Set forth below are certain
defined terms used in this Indenture.

 

“Acquired Indebtedness” means (1) with respect to any Person
that becomes a Restricted Subsidiary after the Issue Date, Indebtedness of such
Person and its Subsidiaries 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 (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 Interest” has the meaning set forth in the
Registration Rights Agreement.

 

“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 4.15, 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 referent Person or
(3) with respect to an individual, any immediate family member of such
Person.  For purposes of this
definition, “control” of a Person
shall mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.

 

 

“Agent” means any Registrar or Paying Agent.

 

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

 

“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 or any division or line of business of any other Person.

 

“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, in Section 5;

 

(3)           Permitted Investments and Restricted
Payments permitted under Section 4.13;

 

(4)           the creation of or realization on any
Lien permitted under this Indenture;

 

(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 Issuer and the Restricted Subsidiaries; and

 

(7)           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

 

2

 

assets transferred in such
transaction or any such series of related transactions does not exceed $1.0
million.

 

“Attributable Indebtedness”, when used with respect to any Sale
and Leaseback Transaction, means, as at the time of determination, the present
value (discounted at a rate borne by the Notes, compounded on a semi-annual
basis) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in any such Sale and Leaseback
Transaction.

 

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

 

 “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 limited liability
company, the board of managers of such Person, (iii) in the case of any
partnership, the board of directors of the general partner of such Person and
(iv) 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.

 

“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.

 

“Capital Expenditures” means, for any fiscal year of the
Issuer, the aggregate of all expenditures of the Issuer and its Restricted
Subsidiaries for the acquisition of fixed or capital assets which should be
capitalized under GAAP on a consolidated balance sheet of the Issuer and its
Restricted Subsidiaries. 
Notwithstanding the foregoing, Capital Expenditures shall not include
expenditures with Net Available Proceeds from Asset Sales (other than through
leases), to the extent such expenditures do not exceed the book value of the
assets sold in such Asset Sales.

 

“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 or acceptances, maturing within 360 days of the date of
acquisition thereof, of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and un-

 

3

 

divided profits of not less
than $500 million and is assigned at least a “B” rating by Thomson Financial
BankWatch;

 

(3)           commercial paper maturing no more
than 180 days from the date of creation thereof issued by a corporation that is
not the Issuer or an Affiliate of the Issuer and is organized under the laws of
any State of the United States of America or the District of Columbia and rated
at least A-1 by S&P or at least P-1 by Moody’s;

 

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

 

(5)           investments in money market or other
mutual funds substantially all of whose assets comprise securities of the types
described in clauses (1) through (4) above.

 

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

 

(1)           any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act) 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;

 

(2)           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 the majority 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;

 

(3)           (a) all or substantially all of the
assets of the Issuer and the Restricted Subsidiaries are sold or otherwise
transferred to any Person other than a Wholly-Owned Restricted Subsidiary or
(b) the Issuer consolidates or merges with or into another Person or any Person
consolidates or merges with or into the Issuer, in either case under this
clause (3)(b), in one transaction or a series of related transactions in which
immediately after the consummation thereof Persons beneficially owning (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, Voting Stock representing in the aggregate a majority of the total
voting power of the Voting Stock of the Issuer immediately prior to such
consummation do not beneficially own (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, Voting Stock representing a majority
of the total voting power of the Voting Stock of the Issuer or the surviving or
transferee Person; or

 

4

 

(4)           the Issuer shall adopt a plan of
liquidation or dissolution or any such plan shall be approved by the
stockholders of the Issuer.

 

For purposes of this
definition, (i) 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 and (ii) any holding company whose only significant asset is Equity
Interests of the Issuer shall not itself be considered a “person” or “group”
for purposes of clause (1) above.

 

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

 

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

 

(1)           Consolidated Net Income, plus

 

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

 

5

 

“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 of other
Indebtedness or redemption of 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, 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 on a basis consistent with Regulation S-X under the Exchange Act)
associated with any such Asset Acquisition) 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 of liability for, any such
Indebtedness or Acquired Indebtedness) occurred on the first day of the
Four-Quarter Period.

 

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

 

6

 

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 and Attributable Indebtedness,

 

(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,

 

(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,

 

(8)           the product of (a) all dividend
payments on any series of Disqualified Equity Interests of the Issuer or any
Preferred Stock of any Restricted Subsidiary (other than any such Disqualified
Equity Interests or any Preferred Stock held by the Issuer or a Wholly-Owned
Restricted Subsidiary or to the extent paid in Qualified Equity Interests), multiplied
by (b) a fraction, the numerator of which is one and the denominator of which
is one minus the then current combined federal, state and local statutory tax
rate of the Issuer and the Restricted Subsidiaries, expressed as a decimal,

 

(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 Interest
Expense shall be calculated excluding unrealized gains and losses with respect
to Hedging Obligations.

 

7

 

“Consolidated Leverage Ratio” means, as of the last day of any
fiscal year of the Issuer, the ratio of the total Indebtedness of the Issuer
and the Restricted Subsidiaries (“Total
Indebtedness”), determined on a consolidated basis as of the last
day of such fiscal year to Consolidated Cash Flow during such fiscal year.  For purposes of this definition,
Consolidated Cash Flow and Total Indebtedness shall be calculated after giving
effect on a pro forma basis to:

 

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 of other Indebtedness or redemption of 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 such fiscal year or at any time subsequent to the last day of
such fiscal year and prior to the date the Excess Cash Flow Offer for such
fiscal year is required to be made, as if such incurrence, repayment, issuance
or redemption, as the case may be (and the application of the proceeds
thereof), occurred on the last day of such fiscal year in the case of Total
Indebtedness and on the first day of such fiscal year in the case of
Consolidated Cash Flow; and

 

any
Asset Sale or other disposition or Asset Acquisition (including any
Consolidated Cash Flow (including any pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Exchange Act)
associated with any such Asset Acquisition) occurring during such fiscal year
or at any time subsequent to the last day of such fiscal year and on or prior
to the date the Excess Cash Flow Offer for such fiscal year is required to be
made, as if such Asset Sale or Asset Acquisition or other disposition
(including the incurrence of, or assumption or liability for, any such
Indebtedness or Acquired Indebtedness) occurred on the first day of such fiscal
year.

 

“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 Wholly-Owned 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;

 

8

 

(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

 

(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 the first paragraph of Section 4.13 or
decreased the amount of Investments outstanding pursuant to clause (11) 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 Net Worth” means, with respect to any Person as
of any date, the consolidated stockholders’ equity of such Person, determined
on a consolidated basis in accordance with GAAP, less (without duplication) (1)
any amounts thereof attributable to Disqualified Equity Interests of such
Person or its Subsidiaries or any amount attributable to Unrestricted

 

9

 

Subsidiaries and (2) all write-ups (other
than write-ups resulting from foreign currency translations and write-ups of
tangible assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to the Issue Date in the book value of
any asset owned by such Person or a Subsidiary of such Person.

 

“Corporate Trust Office” means the corporate trust office of
the Trustee located at Sixth Street & Marquette Avenue, N9303-120,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Department, or such
other office, designated by the Trustee by written notice to the Issuer, at
which at any particular time its corporate trust business shall be
administered.

 

“Credit Agreement” means the Amended and Restated Credit
Agreement dated on or about the Issue Date among the Issuer, the other
borrowers listed therein, General Electric Capital Corporation, as agent, and
the other lenders named therein, including any notes, guarantees, collateral
and security documents, instruments and agreements executed in connection
therewith (including Hedging Obligations related to the Indebtedness incurred
thereunder), and in each case as 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” means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.

 

“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.

 

“Department of Justice Obligation” means that certain
indebtedness of the Issuer outstanding to the Department of Justice in
accordance with that certain Stipulation and Order of Settlement and Dismissal
effected upon the date is was entered by the court on or about December 28,
2001, with an initial outstanding balance of $16,500,000 and an outstanding
balance as of the Issue Date of $3,500,000.

 

“Depository” means The Depository Trust Company, New York, New
York, or a successor thereto registered under the Exchange Act or other
applicable statute or regulation.

 

“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, is, or upon the happening of any event or the passage of time
would be, required to be redeemed by such Person, whether or not 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

 

10

 

maturity date of the Notes; provided, however,
that any class of Equity Interests of such Person that, by its terms,
authorizes such Person to satisfy in full its obligations with respect to the
payment of dividends or upon maturity, redemption (pursuant to a sinking fund
or otherwise) or repurchase thereof or otherwise by the delivery of Equity
Interests that are not Disqualified Equity Interests, and that is not
convertible, puttable or exchangeable for Disqualified Equity Interests or
Indebtedness, will not be deemed to be Disqualified Equity Interests so long as
such Person satisfies its obligations with respect thereto solely by the
delivery of Equity Interests that are not Disqualified Equity Interests; provided,
further, however, that
any Equity Interests that would not constitute Disqualified Equity Interests
but for provisions thereof giving holders thereof (or the holders of any
security into or for which such Equity Interests are convertible, exchangeable
or exercisable) the right to require the Issuer to redeem such Equity Interests
upon the occurrence of a change of 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 set forth in Section 4.09 and Section 4.17 respectively, and
such Equity Interests specifically provide that the Issuer will not redeem any
such Equity Interests pursuant to such provisions prior to the Issuer’s
purchase of the Notes as required pursuant to the provisions set forth in
Section 4.09 and Section 4.17 respectively.

 

“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.

 

“Excess Cash Flow” means, for any fiscal year of Parent, the
sum, without duplication, of

 

(a)           Consolidated Cash Flow for such fiscal year; plus

 

(b)           extraordinary cash gains or cash gains from Asset Sales,
if any, during such fiscal year not included in Consolidated Net Income; plus

 

(c)           the amount, if any, by which Net Working Capital decreased
during such fiscal year; minus

 

(d)           the amount of any cash income taxes payable by the Issuer
and its Restricted Subsidiaries with respect to such fiscal year; minus

 

(e)           Consolidated Interest Expense for such fiscal year, to the
extent paid in cash during such fiscal year; minus

 

(f)            Capital Expenditures or acquisitions of Equity Interests
of a Person that becomes a Restricted Subsidiary, in each case made in cash
during such fiscal year (excluding the financed portion thereof); minus

 

11

 

(g)           permanent repayments of Indebtedness (including any
Department of Justice Obligation) made by the Issuer and its Restricted
Subsidiaries during such fiscal year (including payments of principal in
respect of revolving loans to the extent there is an equivalent reduction in
the revolving commitments under any Credit Facility); but only to the extent
such repayments do not occur in connection with a refinancing of all or any
portion of the loans under the Credit Facility, if any; minus

 

(h)           extraordinary cash losses or cash losses from Asset Sales,
if any, during such fiscal year not included in Consolidated Net Income; minus

 

(i)            the amount, if any, by which Net Working Capital increased
during such fiscal year; minus

 

(j)            the amount of Net Indebtedness as of the end of such
fiscal year.

 

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

 

“Exchange Notes” has the meaning set forth in the Registration
Rights Agreement.

 

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

 

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

 

“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 or committee.

 

“Four-Quarter Period” has the meaning given to such term in the
definition of “Consolidated Interest Coverage Ratio.”

 

“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 on the Issue Date.

 

“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

 

12

 

by agreements to keep-well, 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 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 shall be deemed to have been incurred by such Restricted
Subsidiary and (2) the accrual of interest, the accretion of original issue
discount or the accretion or accumulation of dividends on any Equity Interests
shall not 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;

 

(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;

 

13

 

(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)           all Attributable Indebtedness;

 

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

 

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

 

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 or supplemented
from time to time in accordance with the terms hereof.

 

“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 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

 

14

 

or Affiliate’s board and
board committee meetings and director continuing education expenses.

 

“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 Purchaser” means UBS Securities LLC.

 

“Institutional Accredited Investor” or “IAI” means an “accredited investor” within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

“interest” means, with respect to the Notes, interest and
Additional Interest, if any, on the Notes.

 

“Interest Payment Date” means the Stated Maturity of an
installment of interest on the Notes.

 

“Investments” of any Person means:

 

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

 

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

 

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

 

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

 

Except as otherwise expressly specified in
this definition, the amount of any Investment (other than an Investment made in
cash) shall be the Fair Market Value thereof on the date such Investment is
made.  The amount of Investment pursuant
to clause (4) shall be the Designation Amount determined in accordance with
Section 4.18.  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
Investments in such Restricted Subsidiary retained.

 

15

 

Notwithstanding the foregoing, purchases or
redemptions of Equity Interests of the Issuer shall be deemed not to be
Investments.

 

“Issue Date” means April 23, 2004, the date on which the Notes
are originally issued.

 

“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.

 

“Maturity Date” means May 1, 2011.

 

“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, 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) 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.

 

16

 

“Net Indebtedness” means, at any time, the difference of (x)
the amount of Indebtedness outstanding at such time under Credit Facilities
over (y) cash and Cash Equivalents of the Issuer and its Restricted Subsidiaries
at such time; provided that (x)
if such difference is a negative number, then Net Indebtedness shall be deemed
to be zero and (y) if such difference is greater than $20 million, then Net
Indebtedness shall be deemed to be $20.0 million.

 

 “Net Working Capital”
means, as of any date, (a) the consolidated current assets of Issuer and its
Restricted Subsidiaries as of such date (excluding cash and Cash Equivalents)
minus (b) the consolidated current liabilities of Issuer and its Restricted
Subsidiaries as of such date (excluding current liabilities in respect of
Indebtedness), in each case determined in accordance with GAAP. Net Working
Capital at any date may be a positive or negative number. Net Working Capital
increases when it becomes more positive or less negative and decreases when it
becomes less positive or more negative.

 

“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;

 

(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; and

 

(3)           as to which the lenders have been
notified in writing that they will not have any recourse to the Equity
Interests or assets of the Issuer or any Restricted Subsidiary.

 

“Non-U.S. Person” has the meaning assigned to such term in
Regulation S.

 

“Note Guarantee” means the subordinated guarantee by each
Guarantor of the Issuer’s payment obligations under this Indenture and the
Notes, executed pursuant to this Indenture.

 

“Notes” means, collectively, the Issuer’s 103⁄4% Senior Notes due
2011 issued in accordance with Section 2.02 (whether issued on the Issue Date,
issued as Additional Notes, issued as Exchange Notes or Private Exchange Notes,
or otherwise issued after the Issue Date) treated as a single class of
securities under this Indenture, as amended or supplemented from time to time
in accordance with the terms of this Indenture.

 

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

 

17

 

“Offering Memorandum” means the offering memorandum of the
Issuer relating to the Notes dated April 20, 2004.

 

“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 is reasonably acceptable to the Trustee. 
The counsel may be an employee of, or counsel to, the Issuer, a
Guarantor or the Trustee.

 

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

 

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

 

“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)           Hedging Obligations incurred pursuant
to clause (4) of the second paragraph of Section 4.11;

 

(4)           cash and Cash Equivalents;

 

(5)           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;

 

(6)           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;

 

18

 

(7)           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 4.17;

 

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

 

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

 

(10)         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; and

 

(11)         other Investments in an aggregate
amount not to exceed $5.0 million at any one time outstanding (with each
Investment being valued as of the date made and without regard to subsequent
changes in value).

 

The amount of Investments
outstanding at any time pursuant to clause (11) above shall be deemed to be
reduced:

 

(a)           upon the disposition or repayment of
or return on any Investment made pursuant to clause (11) above, by an amount
equal to the return of capital with respect to such Investment to the Issuer or
any Restricted Subsidiary (to the extent not included in the computation of
Consolidated Net Income); and

 

(b)           upon a Redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary, by an amount equal to the
lesser of (x) the Fair Market Value of the Issuer’s proportionate interest in
such Subsidiary immediately following such Redesignation, and (y) the aggregate
amount of Investments in such Subsidiary that increased (and did not previously
decrease) the amount of Investments outstanding pursuant to clause (11) above.

 

“Permitted Liens”  means
the following types of Liens:

 

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

 

(2)           statutory Liens of landlords and
Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen
and other Liens imposed by law incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall have
been made in respect thereof;

 

(3)           Liens incurred or deposits made in
the ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal

 

19

 

bonds,
bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of borrowed
money);

 

(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)           judgment Liens not giving rise to a
Default so long as such Liens are adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such judgment
have not been finally terminated or the period within which the proceedings may
be initiated has not expired;

 

(6)           easements, rights-of-way, zoning
restrictions and other similar charges, restrictions or encumbrances in respect
of real property or immaterial imperfections of title which do not, in the
aggregate, impair in any material respect the ordinary conduct of the business
of the Issuer and the Restricted Subsidiaries taken as a whole;

 

(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 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; provided that in no case shall any such Liens secure (either
directly or indirectly) the repayment of any Indebtedness;

 

(10)         licenses, leases or subleases granted
to others that do not materially interfere with the ordinary course of business
of the Issuer or any Restricted Subsidiary;

 

(11)         Liens arising from filing Uniform
Commercial Code financing statements regarding leases;

 

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

 

(13)         Liens existing on the Issue Date
securing Indebtedness outstanding on the Issue Date;

 

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

 

20

 

(15)         Liens securing all Obligations owing by
the Issuer or any Guarantor under or in respect of the Credit Facilities
incurred pursuant to clause (1) of the second paragraph of Section 4.11;

 

(16)         Liens securing Purchase Money
Indebtedness and Capitalized Lease Obligations; provided that such Liens shall
not extend to any asset other than the specified asset being financed and
additions and improvements thereon;

 

(17)         Liens securing Acquired Indebtedness
permitted to be incurred under this Indenture; provided that the Liens do not
extend to assets not subject to such Liens 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;

 

(18)         Liens on assets of a Person existing at
the time such Person is acquired or merged with or into or consolidated with
the Issuer or any such Restricted Subsidiary (and not created in anticipation
or contemplation thereof);

 

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

 

(20)         Liens to secure Attributable
Indebtedness and/or that are incurred pursuant to Section 4.19; provided that
any such Lien shall not extend to or cover any assets of the Issuer or any
Restricted Subsidiary other than the assets which are the subject of the Sale
and Leaseback Transaction in which the Attributable Indebtedness is incurred;

 

(21)         Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;

 

(22)         Liens incurred in the ordinary course
of business of the Issuer or any Restricted Subsidiary with respect to
obligations (other than Indebtedness) that do not in the aggregate exceed $5.0
million at any one time outstanding; and

 

(23)         Liens securing the Subject Swap (as
such term is defined in the Credit Agreement as in effect on the Issue Date).

 

“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

 

21

 

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 Exchange” has the meaning given to it in the
Registration Rights Agreement.

 

“Private Exchange Notes” has the meaning given to it in the
Registration Rights Agreement.

 

“Private Placement Legend” means the legends initially set
forth on the Notes in the form set forth in Exhibit B.

 

“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
(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” means Equity Interests of the
Issuer 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 the
Issuer or financed, directly or indirectly, using funds (1) borrowed from the
Issuer or any Subsidiary of the Issuer until and to the extent such borrowing
is repaid or (2) contributed, extended, guaranteed or advanced by the Issuer or
any Subsidiary of the Issuer (including, without limitation, in respect of any
employee stock ownership or benefit plan).

 

“Qualified Equity Offering” means the issuance and sale of
Qualified Equity Interests of the Issuer to any other Person who is not, prior
to such issuance and sale, an Affiliate of the Issuer, other than in connection
with a transaction or series of transactions constituting a Change of Control; provided,
however, that cash proceeds therefrom equal to not less than 100% of
the aggregate principal amount of any Notes to be redeemed are received by the
Issuer as a capital contribution immediately prior to such redemption.

 

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

 

22

 

“Record Date” means the applicable Record Date specified in the
Notes; provided that if any such
date is not a Business Day, the Record Date shall be the first day immediately
succeeding such specified day that is a Business Day.

 

“redeem” means to redeem, repurchase, purchase, defease,
retire, discharge or otherwise acquire or retire for value; and “redemption” shall have a correlative
meaning; provided that this
definition shall not apply for purposes of Section 5 or Section 6 of the Notes
or Article Three.

 

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

 

“Redemption Price,” when used with respect to any Note to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Notes.

 

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

 

“Refinancing Indebtedness” means Indebtedness of the Issuer or
a Restricted Subsidiary issued in exchange for, or the proceeds of which are
used, within 90 days of such issuance or receipt of such proceeds, to redeem or
refinance in whole or in part, any Indebtedness of the Issuer or any Restricted
Subsidiary (the “Refinanced Indebtedness”);
provided that:

 

(1)           the principal amount (or accreted
value, in the case of Indebtedness issued at a discount) of the Refinancing
Indebtedness does not exceed the principal amount (or accreted value, as the
case may be) of the Refinanced Indebtedness plus the amount of accrued and
unpaid interest on the Refinanced Indebtedness, any 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 the Refinancing
Indebtedness does not include any Person (other than the Issuer or any
Guarantor) that is not an obligor of the Refinanced Indebtedness;

 

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

 

(4)           the Refinancing Indebtedness has a
final stated maturity either (a) no earlier than the Refinanced Indebtedness
being repaid or amended or (b) after the maturity date of the Notes; and

 

(5)           the portion, if any, of the
Refinancing Indebtedness that is scheduled to mature on or prior to the
maturity date of the Notes has a Weighted Average Life to Maturity at the time
such Refinancing Indebtedness is incurred that is equal to or greater

 

23

 

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 of the Notes.

 

“Registration Rights Agreement” means (i) the Registration
Rights Agreement dated as of the Issue Date among the Issuer, the Guarantors
and the Initial Purchaser 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 under the Securities Act.

 

“Responsible Officer” means, when used with respect to the
Trustee, any officer in the Corporate Trust Office of the Trustee to whom any
corporate trust matter is referred because of such officer’s knowledge of and
familiarity with the particular subject and shall also mean any officer who
shall have direct responsibility for the administration of this Indenture.

 

“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 redemption of any Equity
Interests of the Issuer or any Restricted Subsidiary, including, without
limitation, any payment in connection with any merger or consolidation
involving the Issuer but excluding any such Equity Interests held by the Issuer
or any Restricted Subsidiary;

 

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

 

(4)           any payment or redemption prior to
the 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 such payment or redemption of Subordinated
Indebtedness owed to and held by the Issuer or any Restricted Subsidiary).

 

“Restricted Security” means a Note that constitutes a
“Restricted Security” within the meaning of Rule 144(a)(3) under the Securities
Act; provided, however, that the Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether any Note constitutes a Restricted Security.

 

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

 

24

 

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

 

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

 

“Sale and Leaseback Transactions” means with respect to any
Person an arrangement with any bank, insurance company or other lender or
investor or to which such lender or investor is a party, providing for the
leasing by such Person of any asset of such Person which has been or is being
sold or transferred by such Person to such lender or investor or to any Person
to whom funds have been or are to be advanced by such lender or investor on the
security of such asset.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“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) or (8) of Section 6.01  has occurred and is continuing, or which
are being released from their Note Guarantees
(in the case of Section 9.02(b)(9)), would constitute a Significant
Subsidiary under clause (1) of this definition.

 

“Stated Maturity” means, with respect to any installment of
interest or principal on any Indebtedness, the date on which such payment of
interest or principal is scheduled to be paid in the documentation governing
such Indebtedness, and shall not include any contingent obligations to repay,
redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

 

“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

 

25

 

(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 one
or more Subsidiaries of such Person (or any combination thereof).

 

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

 

“Total Indebtedness” has the meaning given to it in the
definition of “Consolidated Leverage Ratio.”

 

“Transaction Date” has the meaning given to such term in the
definition of “Consolidated Interest Coverage Ratio.”

 

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

 

“Trustee” means the party named as such in this Indenture until
a successor replaces it in accordance with the provisions of 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 4.18 and (2) any
Subsidiary of an Unrestricted Subsidiary.

 

“U.S. Government Obligations” means direct non-callable
obligations of, or obligations 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. Legal Tender” means such coin or currency of the United
States of America that at the time of payment shall be legal tender for the
payment of public and private debts.

 

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

 

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

 

“Wholly-Owned Restricted Subsidiary” means a Restricted
Subsidiary of which 100% of the Equity Interests (except for directors’
qualifying shares or certain minority interests owned by other Persons solely
due to local law requirements that there be more than one stockholder, but
which interest is not in excess of what is required for such purpose) are owned
directly by the Issuer or through one or more Wholly-Owned Restricted
Subsidiaries.

 

26

 

SECTION 1.02.                                              Other Definitions.

 

	
  Term

  	
   

  	
  Defined in
  Section

  
	
  “144A Global Note”

  	
   

  	
   

  
	
  “Additional Notes”

  	
   

  	
  2.02

  
	
  “Affiliate Transaction”

  	
   

  	
  4.15

  
	
  “Authentication Order”

  	
   

  	
  2.02

  
	
  “Change of Control Offer”

  	
   

  	
  4.09

  
	
  “Change of Control Payment
  Date”

  	
   

  	
  4.09

  
	
  “Change of Control
  Purchase Price”

  	
   

  	
  4.09

  
	
  “Covenant Defeasance”

  	
   

  	
  8.02

  
	
  “Coverage Ratio Exception”

  	
   

  	
  4.11

  
	
  “Designation”

  	
   

  	
  4.18

  
	
  “Designation Amount”

  	
   

  	
  4.18

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Excess Cash Flow Amount”

  	
   

  	
  4.10

  
	
  “Excess Cash Flow Payment
  Date”

  	
   

  	
  4.10

  
	
  “Excess Cash Flow Purchase
  Price”

  	
   

  	
  4.10

  
	
  “Excess Proceeds”

  	
   

  	
  4.17

  
	
  “Global Note”

  	
   

  	
  2.01

  
	
  “Guarantee Obligations”

  	
   

  	
  10.01

  
	
  “Initial Global Notes”

  	
   

  	
  2.01

  
	
  “Initial Notes’

  	
   

  	
  2.02

  
	
  “IAI Global Note”

  	
   

  	
  2.01

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  
	
  “Net Proceeds Deficiency”

  	
   

  	
  4.17

  
	
  “Net Proceeds Offer”

  	
   

  	
  4.17

  
	
  “Net Proceeds Payment
  Date”

  	
   

  	
  4.17

  
	
  “Offered Price”

  	
   

  	
  4.17

  
	
  “Pari Passu Indebtedness
  Price”

  	
   

  	
  4.17

  
	
  “Participants”

  	
   

  	
  2.15

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Amount”

  	
   

  	
  4.17

  
	
  “Permitted Indebtedness”

  	
   

  	
  4.11

  
	
  “Physical Notes”

  	
   

  	
  2.01

  
	
  “Redesignation”

  	
   

  	
  4.18

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Regulation S Global Note”

  	
   

  	
  2.01

  
	
  “Restricted Payments
  Basket”

  	
   

  	
  4.13

  
	
  “Successor”

  	
   

  	
  5.01

  
	
  “Transaction Date”

  	
   

  	
  1.01

  

 

27

 

SECTION 1.03.                                              Incorporation by Reference of Trust Indenture
Act.

 

Whenever this Indenture
refers to a provision of the Trust Indenture Act, such provision is incorporated
by reference in, and made a part of, this Indenture.  The following Trust Indenture Act terms used in this Indenture
have the following meanings:

 

“indenture securities”
means the Notes.

 

“indenture security
holder” means a Holder.

 

“indenture to be
qualified” means this Indenture.

 

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

 

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

 

All other Trust Indenture
Act terms used in this Indenture that are defined by the Trust Indenture Act,
defined by Trust Indenture Act reference to another statute or defined by SEC
rule and not otherwise defined herein have the meanings assigned to them
therein.

 

SECTION 1.04.                                              Rules of Construction.

 

Unless
the context otherwise requires:

 

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

 

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

 

(3)           “or” is not exclusive;

 

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

 

(5)           provisions apply to successive events
and transactions;

 

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

 

(7)           the words “including,” “includes” and
similar words shall be deemed to be followed by “without limitation.”

 

28

 

ARTICLE
TWO

THE NOTES

 

SECTION 2.01.                                              Form and Dating.

 

The Notes and the Trustee’s
certificate of authentication shall be substantially in the form of Exhibit
A hereto.  The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage.  The Issuer shall approve the
form of the Notes and any notation, legend or endorsement on them.  Each Note shall be dated the date of its
issuance and show the date of its authentication.  Each Note shall have an executed Note Guarantee from each of the
Guarantors existing on the Issue Date endorsed thereon substantially in the
form of Exhibit E.

 

The terms and provisions
contained in the Notes and the Note Guarantees shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent applicable, the
Issuer, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound
thereby.

 

Notes offered and sold in
reliance on Rule 144A shall be issued initially in the form of a single
permanent global Note in registered form, substantially in the form set forth
in Exhibit A (the “144A Global Note”),
deposited with the Trustee, as custodian for the Depository, duly executed by
the Issuer (and having an executed Note Guarantee from each of the Guarantors
endorsed thereon) and authenticated by the Trustee as hereinafter provided and
shall bear the legends set forth in Exhibit B.

 

Notes offered and sold in
offshore transactions in reliance on Regulation S shall be issued initially in
the form of a single global Note in registered form, substantially in the form
of Exhibit A (the “Regulation S Global
Note”), deposited with the Trustee, as custodian for the Depository,
duly executed by the Issuer (and having an executed Note Guarantee from each of
the Guarantors endorsed thereon) and authenticated by the Trustee as
hereinafter provided and shall bear the legends set forth in Exhibit B.

 

The initial offer and resale
of the Notes shall not be to an Institutional Accredited Investor.  The Notes resold to Institutional Accredited
Investors in connection with the first transfer made pursuant to Section
2.16(a) shall be issued initially in the form of a single permanent Global Note
in registered form, substantially in the form set forth in Exhibit A
(the “IAI Global Note,” and, together
with the 144A Global Note and the Regulation S Global Note, the “Initial Global Notes”), deposited with the
Trustee, as custodian for the Depository, duly executed by the Issuer (and
having an executed Note Guarantee from each of the Guarantors endorsed thereon)
and authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Exhibit B.

 

Notes issued after the Issue
Date shall be issued initially in the form of one or more global Notes in
registered form, substantially in the form set forth in Exhibit A,
deposited with the Trustee, as custodian for the Depository, duly executed by
the Issuer (and having an executed Note Guarantee from each of the Guarantors
endorsed thereon) and authenticated by

 

29

 

the Trustee as hereinafter provided and shall
bear any legends required by applicable law (together with the Initial Global
Notes, the “Global Notes”) or as
Physical Notes.

 

The aggregate principal
amount of the Global Notes 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. 
Notes issued in exchange for interests in a Global Note pursuant to
Section 2.16 may be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A and
bearing the applicable legends, if any, (the “Physical
Notes”).

 

SECTION 2.02.                                              Execution, Authentication and Denomination;
Additional Notes; Exchange Notes.

 

One Officer of the Issuer
(who shall have been duly authorized by all requisite corporate actions) shall
sign the Notes for such Issuer by manual or facsimile signature.  One Officer of a Guarantor (who shall have been
duly authorized by all requisite corporate actions) shall sign the Note
Guarantee for such Guarantor by manual or facsimile signature.

 

If an Officer whose
signature is on a Note or Note Guarantee, as the case may be, was an Officer at
the time of such execution but no longer holds that office at the time the
Trustee authenticates the Note, the Note shall nevertheless be valid.

 

A Note (and the Note
Guarantees in respect thereof) shall not be valid until an authorized signatory
of the Trustee manually signs the certificate of authentication on the
Note.  The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.

 

The Trustee shall
authenticate (i) on the Issue Date, Notes for original issue in the aggregate
principal amount not to exceed $185,000,000 (the “Initial Notes”), (ii) additional Notes (the “Additional Notes”) having identical terms
and conditions to the Initial Notes, except for issue date, issue price and
first interest payment date, in an unlimited amount (so long as not otherwise
prohibited by the terms of this Indenture, including, without limitation,
Section 4.11) and (iii) Exchange Notes or Private Exchange Notes (x) in
exchange for a like principal amount of Initial Notes or (y) in exchange for a
like principal amount of Additional Notes in each case upon a written order of
the Company in the form of a certificate of an Officer of the Company (an “Authentication Order”).  Each such Authentication Order shall specify
the amount of Notes to be authenticated and the date on which the Notes are to
be authenticated, whether the Notes are to be Initial Notes, Exchange Notes,
Private Exchange Notes or Additional Notes and whether the Notes are to be
issued as certificated Notes or Global Notes or such other information as the
Trustee may reasonably request.  In
addition, with respect to authentication pursuant to clause (ii) or (iii) of
the first sentence of this paragraph, the first such Authentication Order from
the Company shall be accompanied by an Opinion of Counsel of the Company in a
form reasonably satisfactory to the Trustee.

 

All Notes issued under this
Indenture shall be treated as a single class for all purposes under this
Indenture.  The Additional Notes and the
Private Exchange Notes shall bear any legend required by applicable law.

 

30

 

The Trustee may appoint an
authenticating agent reasonably acceptable to the Issuer to authenticate
Notes.  Unless otherwise provided in the
appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so.  Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the
same rights as an Agent to deal with the Issuer and Affiliates of the Issuer.  The Trustee shall have the right to decline
to authenticate and deliver any Notes under this Indenture if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
or if the Trustee in good faith shall determine that such action would expose
the Trustee to personal liability.

 

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

 

SECTION 2.03.                                              Registrar and Paying Agent.

 

The Issuer shall maintain or
cause to be maintained an office or agency in the Borough of Manhattan, The
City of New York, where (a) Notes may be presented or surrendered for
registration of transfer or for exchange (“Registrar”),
(b) Notes may, subject to Section 2 of the Notes, be presented or surrendered
for payment (“Paying Agent”) and
(c) notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served.  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; provided,
however, that no such designation
or rescission shall in any manner relieve the Issuer of its obligation to
maintain or cause to be maintained an office or agency in the Borough of
Manhattan, The City of New York, for such purposes.  The Issuer may act as Registrar or Paying Agent, except that for
the purposes of Article Eight, neither the Issuer nor any Affiliate of the
Issuer shall act as Paying Agent.  The
Registrar shall keep a register of the Notes and of their transfer and
exchange.  The Issuer, upon notice to
the Trustee, may have one or more co-registrars and one or more additional
paying agents reasonably acceptable to the Trustee.  The term “Registrar” includes any co-registrar and the term
“Paying Agent” includes any additional paying agent.  The Issuer initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed.

 

The Issuer shall enter into
an appropriate agency agreement with any Agent not a party to this Indenture,
which agreement shall implement the provisions of this Indenture that relate to
such Agent.  The Issuer shall notify the
Trustee, in advance, of the name and address of any such Agent.  If the Issuer fails to maintain a Registrar
or Paying Agent, the Trustee shall act as such.

 

SECTION 2.04.                                              Paying Agent To Hold Assets in Trust.

 

The Issuer shall require
each Paying Agent other than the Trustee or the Issuer or any Subsidiary to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Issuer or any other obligor on the Notes), and shall
notify the Trustee of any Default by the Issuer (or any other obligor on the
Notes) in making any such payment.  The
Issuer at any time may require a Paying

 

31

 

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 distribute all assets held by it to
the Trustee and to account for any assets distributed.  Upon distribution to the Trustee of all
assets that shall have been delivered by the Issuer to the Paying Agent, the
Paying Agent shall have no further liability for such assets.

 

SECTION 2.05.                                              Holder Lists.

 

The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Holders.  If the Trustee is not the Registrar, the
Issuer and the Guarantors shall furnish to the Trustee at least two (2)
Business Days prior to each Interest Payment Date and at such other times as
the Trustee may request in writing a list, in such form and as of such date as
the Trustee may reasonably require, of the names and addresses of Holders,
which list may be conclusively relied upon by the Trustee.

 

SECTION 2.06.                                              Transfer and Exchange.

 

Subject to Sections 2.15 and
2.16, when Notes are presented to the 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, the Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Notes surrendered for
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Registrar,
duly executed by the Holder thereof or his or her attorney duly authorized in
writing.  To permit registrations of
transfers and exchanges, the Issuer shall execute and the Trustee shall
authenticate Notes at the 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 payable in connection therewith.

 

Without the prior written
consent of the Issuer, the Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the
opening of business 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 Three, except
the unredeemed portion of any Note being redeemed in part, and (iii) beginning
at the opening of business on any Record Date and ending on the close of
business on the related Interest Payment Date.

 

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

 

32

 

SECTION 2.07.                                              Replacement Notes.

 

If a mutilated Note is
surrendered to the Trustee or if the Holder of a Note claims that the Note has
been lost, destroyed or wrongfully taken, the Issuer shall issue and the
Trustee shall authenticate a replacement Note if the Trustee’s requirements are
met.  Such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both 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.  The Issuer may charge such Holder for its
reasonable out-of-pocket expenses in replacing a Note pursuant to this Section
2.07, including reasonable fees and expenses of counsel and of the Trustee.

 

Every replacement Note is an
additional obligation of the Issuer and every replacement Note Guarantee shall
constitute an additional obligation of the Guarantor 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 the replacement or payment of lost,
destroyed or wrongfully taken Notes.

 

SECTION 2.08.                                              Outstanding Notes.

 

Notes outstanding at any
time are all the Notes that have been authenticated by the Trustee except those
cancelled by it, those delivered to it for cancellation and those described in
this Section as not outstanding.  A Note
does not cease to be outstanding because the Issuer, the Guarantors or any of
their respective Affiliates hold the Note (subject to the provisions of Section
2.09).

 

If a Note is replaced
pursuant to Section 2.07 (other than a mutilated Note surrendered for
replacement), it ceases to be outstanding unless a Responsible Officer of the
Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.  A mutilated Note ceases to be outstanding
upon surrender of such Note and replacement thereof pursuant to Section 2.07.

 

If the principal amount of
any Note is considered paid under Section 4.01, it ceases to be outstanding and
interest ceases to accrue.  If on a
Redemption Date or the Maturity Date the Trustee or Paying Agent (other than
the Issuer or an Affiliate thereof) holds U.S. Legal Tender or U.S. Government
Obligations 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 or consent, Notes owned by the Issuer or any of its Affiliates shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that a Responsible Officer of the Trustee actually knows are so owned
shall be disregarded.

 

33

 

SECTION 2.10.                                              Temporary Notes.

 

Until definitive Notes are
ready for delivery, the Issuer may prepare and the Trustee shall authenticate
temporary Notes.  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 definitive Notes in exchange for temporary Notes.  Until such exchange, temporary Notes shall
be entitled to the same rights, benefits and privileges as definitive Notes.  Notwithstanding the foregoing, so long as
the Notes are represented by a Global Note, such Global Note may be in
typewritten form.

 

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 transfer, exchange or payment.  The Trustee, or at the direction of the
Trustee, the Registrar or the Paying Agent (other than the Issuer or a
Subsidiary), and no one else, shall cancel and, at the written direction of the
Issuer, shall dispose of all Notes surrendered for transfer, exchange, payment
or cancellation in accordance with its customary procedures.  Subject to Section 2.07, the Issuer may not
issue new Notes to replace Notes that it has paid or delivered to the Trustee
for cancellation.  If the Issuer or any
Guarantor 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.

 

SECTION 2.12.                                              Defaulted Interest.

 

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, in any lawful
manner.  The Issuer may pay 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 any such subsequent special record date,
the Issuer shall mail to each Holder, 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.

 

SECTION 2.13.                                              CUSIP and ISIN Numbers.

 

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

 

34

 

SECTION 2.14.                                              Deposit of Moneys.

 

Subject to Section 2 of the
Notes, prior to 10:00 a.m. New York City time on each Interest Payment Date,
Maturity Date, Redemption Date, Change of Control Payment Date and Net Proceeds
Payment Date, the Issuer shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, Maturity Date, Redemption Date, Change of
Control Payment Date and Net Proceeds Payment Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Payment Date and Net Proceeds Payment Date, as the case may be.

 

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 Exhibit B, as applicable.

 

Members of, or participants
in, the Depository (“Participants”)
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depository, or the Trustee as its custodian, 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 Participants, the operation of
customary practices governing the exercise of the rights of a Holder of any
Note.

 

(b)           Transfers of Global Notes shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees.  Interests of beneficial
owners in the Global Notes may be transferred or exchanged for Physical Notes
in accordance with the rules and procedures of the Depository and the
provisions of Section 2.16.  In
addition, Physical Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Notes if (i) the Depository
notifies the Issuer that it is unwilling or unable to act as Depository for any
Global Note, the Issuer so notifies the Trustee in writing and a successor
Depository is not appointed by the Issuer within 90 days of such notice or (ii)
the Issuer, at its option, notifies the Trustee in writing that it elects to
cause the issuance of the Notes in the form of Physical Notes under this
Indenture.  Upon any issuance of a
Physical Note in accordance with this Section 2.15(b) the Trustee is required
to register such Physical Note in the name of, and cause the same to be
delivered to, such person or persons (or the nominee of any thereof).  All such Physical Notes shall bear the
applicable legends, if any.

 

(c)           In connection with any transfer or exchange of a portion
of the beneficial interest in a Global Note to beneficial owners pursuant to
paragraph (b) of this Section 2.15, the Registrar shall (if one or more
Physical Notes are to be issued) reflect on its books and records the date and
a decrease in the principal amount of such Global Note in an amount equal to
the principal amount of the beneficial interest in the Global Note to be
transferred, and the Issuer shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Notes of au-

 

35

 

thorized denominations in an aggregate
principal amount equal to the principal amount of the beneficial interest in
the Global Note so transferred.

 

(d)           In connection with the transfer of a Global Note as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
such Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and (i) the Issuer shall execute, (ii) the Guarantors shall
execute notations of Note Guarantees on and (iii) the Trustee shall upon
written instructions from the Issuer authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial interest
in such Global Note, an equal aggregate principal amount of Physical Notes of
authorized denominations.

 

(e)           Any Physical Note constituting a Restricted Security
delivered in exchange for an interest in a Global Note pursuant to paragraph
(b) or (c) of this Section 2.15 shall, except as otherwise provided by Section
2.16, bear the Private Placement Legend.

 

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

 

SECTION 2.16.                                              Special Transfer and Exchange Provisions.

 

(a)           Transfers to Non-QIB Institutional Accredited Investors.  The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Security
to any Institutional Accredited Investor which is not a QIB:

 

(i)            the Registrar shall register the
transfer of any Restricted Security, whether or not such Note bears the Private
Placement Legend, if (x) the requested transfer is after the second anniversary
of the Issue Date; provided, however, that neither the Issuer nor any
Affiliate of the Issuer has held any beneficial interest in such Note, or
portion thereof, at any time on or prior to the second anniversary of the Issue
Date or (y) the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit C hereto and any legal
opinions and certifications as may be reasonably requested by the Trustee and
the Issuer;

 

(ii)           if the proposed transferee is a
Participant and the Notes to be transferred consist of Physical Notes which
after transfer are to be evidenced by an interest in the IAI Global Note, upon
receipt by the Registrar of the Physical Note and (x) written instructions
given in accordance with the Depository’s and the Registrar’s procedures and
(y) the certificate, if required, referred to in clause (y) of paragraph (i)
above (and any legal opinion or other certifications), the Registrar shall
register the transfer and reflect on its books and records the date and an
increase in the principal amount of the IAI Global Note in an amount equal to
the principal amount of Physical Notes to be transferred, and the Registrar shall
cancel the Physical Notes so transferred; and

 

(iii)          if the proposed transferor is a
Participant seeking to transfer an interest in a Global Note, upon receipt by
the Registrar of (x) written instructions given in accordance with the
Depository’s and the Registrar’s procedures and (y) the certificate, if re-

 

36

 

quired, referred to in
clause (y) of paragraph (i) above, the Registrar shall register the transfer
and reflect on its books and records the date and (A) a decrease in the
principal amount of the Global Note from which such interests are to be
transferred in an amount equal to the principal amount of the Notes to be
transferred and (B) an increase in the principal amount of the IAI Global Note
in an amount equal to the principal amount of the Notes to be transferred.

 

(b)           Transfers to QIBs. 
The following provisions shall apply with respect to the registration of
any proposed transfer of a Restricted Security to a QIB:

 

(i)            the Registrar shall register the
transfer of any Restricted Security, whether or not such Note bears the Private
Placement Legend, if (x) the requested transfer is after the second anniversary
of the Issue Date; provided, however, that neither the Issuer nor any
Affiliate of the Issuer has held any beneficial interest in such Note, or
portion thereof, at any time on or prior to the second anniversary of the Issue
Date or (y) such transfer is being made by a proposed transferor who has
checked the box provided for on the applicable Global Note stating, or has
otherwise advised the Issuer and the Registrar in writing, that the sale has
been made in compliance with the provisions of Rule 144A to a transferee who
has signed the certification provided for on the applicable Global Note
stating, or has otherwise advised the Issuer and the Registrar in writing, that
it is purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such account
is a QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Issuer as it has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A;

 

(ii)           if the proposed transferee is a
Participant and the Notes to be transferred consist of Physical Notes which
after transfer are to be evidenced by an interest in the 144A Global Note, upon
receipt by the Registrar of the Physical Note and written instructions given in
accordance with the Depository’s and the Registrar’s procedures, the Registrar
shall register the transfer and reflect on its book and records the date and an
increase in the principal amount of the 144A Global Note in an amount equal to
the principal amount of Physical Notes to be transferred, and the Registrar
shall cancel the Physical Notes so transferred; and

 

(iii)          if the proposed transferor is a
Participant seeking to transfer an interest in the IAI Global Note or the
Regulation S Global Note, upon receipt by the Registrar of written instructions
given in accordance with the Depository’s and the Registrar’s procedures, the
Registrar shall register the transfer and reflect on its books and records the
date and (A) a decrease in the principal amount of the IAI Global Note or the
Regulation S Global Note, as the case may be, in an amount equal to the
principal amount of the Notes to be transferred and (B) an increase in the
principal amount of the 144A Global Note in an amount equal to the principal
amount of the Notes to be transferred.

 

37

 

(c)           Transfers to Non-U.S. Persons.  The following provisions shall apply with
respect to any transfer of a Restricted Security to a Non-U.S. Person under
Regulation S:

 

(i)            the Registrar shall register any
proposed transfer of a Restricted Security to a Non-U.S. Person upon receipt of
a certificate substantially in the form of Exhibit D from the proposed
transferor and such certifications, legal opinions and other information as the
Trustee or the Issuer may reasonably request; and

 

(ii)           (a) if the proposed transferor is a
Participant holding a beneficial interest in the Rule 144A Global Note or the
IAI Global Note or the Note to be transferred consists of Physical Notes, upon
receipt by the Registrar of (x) the documents required by paragraph (i) and (y)
instructions in accordance with the Depository’s and the Registrar’s
procedures, the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the Rule 144A Global Note or the IAI Global
Note, as the case may be, in an amount equal to the principal amount of the
beneficial interest in the Rule 144A Global Note or the IAI Global Note, as the
case may be, to be transferred or cancel the Physical Notes to be transferred,
and (b) if the proposed transferee is a Participant, upon receipt by the
Registrar of instructions given in accordance with the Depository’s and the
Registrar’s procedures, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Regulation S Global
Note in an amount equal to the principal amount of the Rule 144A Global Note,
the IAI Global Note or the Physical Notes, as the case may be, to be
transferred.

 

(d)           Exchange Offer. 
Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02, the Trustee shall
authenticate one or more Global Notes and/or Physical Notes not bearing the
Private Placement Legend in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Initial Global Notes or
Physical Notes, as the case may be, tendered for acceptance in accordance with
the Exchange Offer and accepted for exchange in the Exchange Offer.

 

(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 unless otherwise required by
applicable law, the 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 shall deliver only Notes that bear the Private Placement Legend
unless (i) there is delivered to the Trustee an Opinion of Counsel reasonably
satisfactory to the Issuer and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or (ii) such Note
has been offered and sold (including pursuant to the Exchange Offer) pursuant
to an effective registration statement under the Securities Act.

 

38

 

(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.

 

The Registrar shall retain
copies of all letters, notices and other written communications received
pursuant to Section 2.15 or 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.

 

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 Depository Participants 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 Trustee shall have no
responsibility for the actions or omissions of the Depository, or the accuracy
of the books and records of the Depository.

 

(h)           Cancellation and/or Adjustment of Global Note.  At such time as all beneficial interests in
a particular Global Note have been exchanged for Physical Notes or a particular
Global Note has been redeemed, repurchased or canceled in whole and not in
part, each such Global Note shall be returned to or  retained and canceled by the Trustee in accordance with Section
2.11 hereof.  At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note or for Physical Notes, the principal
amount of Notes represented by such Global Note shall be reduced accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if
the beneficial interest is being exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

 

ARTICLE THREE

REDEMPTION

 

SECTION 3.01.                                              Notices to Trustee.

 

If the Issuer elects to
redeem Notes pursuant to Section 5 or Section 6 of the Notes, it shall notify
the Trustee in writing of the Redemption Date, the Redemption Price and the
principal amount of Notes to be redeemed. 
The Issuer shall give notice of redemption to the Trustee at least 35
days but not more than 60 days before the Redemption Date (unless a shorter

 

39

 

notice shall be agreed to by the Trustee),
together with such documentation and records as shall enable the Trustee to
select the Notes to be redeemed.

 

SECTION 3.02.                                              Selection of Notes To Be Redeemed.

 

If less than all of the
Notes are to be redeemed at any time pursuant to Sections 5 and 6 of the Notes,
the Trustee will select Notes for redemption as follows:

 

(x)                                   if the Notes are listed on a national
securities exchange, in compliance with the requirements of the principal
national securities exchange on which the Notes are listed; or

 

(y)                                 if the Notes are not so listed, on a pro rata basis, by lot or by such method
as the Trustee shall deem fair and appropriate;

 

provided that, in the case of such redemption
pursuant to Section 6 of the Notes, the Trustee will select the Notes on a pro rata basis or on as nearly a pro rata basis as practicable (subject to
the procedures of the Depository) unless that method is otherwise prohibited.

 

No Notes of $1,000 or less
shall be redeemed in part.

 

SECTION 3.03.                                              Notice of Redemption.

 

At least 30 days but not
more than 60 days before a Redemption Date, the Issuer shall mail a notice of
redemption by first class mail, postage prepaid, to each Holder whose Notes are
to be redeemed at its registered address (except that a notice issued in
connection with a redemption referred to in Section 8.01 may be more than 60
days before such Redemption Date).  At
the Issuer’s request, the Trustee shall forward the notice of redemption in the
Issuer’s name and at the Issuer’s expense. 
Each notice for redemption shall identify the Notes (including the CUSIP
or ISIN number) to be redeemed and shall state:

 

(1)           the Redemption Date;

 

(2)           the Redemption Price and the amount
of accrued interest, if any, to be paid;

 

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

 

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

 

(5)           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 of such Notes is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Notes redeemed;

 

(6)           if any Note is being redeemed in
part, the portion of the principal amount of such Note to be redeemed and that,
after the Redemption Date, and upon surrender and

 

40

 

cancellation of such Note, a
new Note or Notes in aggregate principal amount equal to the unredeemed portion
thereof will be issued;

 

(7)           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; and

 

(8)           the Section of the Notes or this
Indenture, as applicable, pursuant to which the Notes are to be redeemed.

 

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

 

SECTION 3.04.                                              Effect of Notice of Redemption.

 

Once notice of redemption is
mailed in accordance with Section 3.03, Notes called for redemption become due
and payable on the Redemption Date and at the Redemption Price plus accrued
interest, if any.  Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price (which shall include accrued interest thereon to, but not
including, the Redemption Date), but installments of interest, the maturity of
which is on or prior to the Redemption Date, shall be payable to Holders of
record at the close of business on the relevant Record Dates.  On and after the Redemption Date interest
shall cease to accrue on Notes or portions thereof called for redemption unless
the Issuer shall have not complied with its obligations pursuant to Section
3.05.

 

SECTION 3.05.                                              Deposit of Redemption Price.

 

On or before 10:00 a.m. New
York time on the Redemption Date, the Issuer shall deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the Redemption Price plus accrued and
unpaid interest, if any, of all Notes to be redeemed on that date.

 

If the Issuer complies with
the preceding paragraph, then, unless the Issuer defaults in the payment of
such Redemption Price plus accrued interest, if any, interest on the Notes to
be redeemed will cease to accrue on and after the applicable Redemption Date,
whether or not such Notes are presented for payment.

 

SECTION 3.06.                                              Notes Redeemed in Part.

 

If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed.  A new Note or Notes in principal amount
equal to the unredeemed portion of the original Note or Notes shall be issued
in the name of the Holder thereof upon surrender and cancellation of the
original Note or Notes.

 

41

 

ARTICLE
FOUR

COVENANTS

 

SECTION 4.01.                                              Payment of Notes.

 

The Issuer shall pay the
principal of (and premium, if any) and interest on the Notes in the manner
provided in the Notes, the Registration Rights Agreement and this
Indenture.  An installment of principal
of, or interest on, the Notes shall be considered paid on the date it is due if
the Trustee or Paying Agent (other than the Issuer or an Affiliate thereof)
holds on that date U.S. Legal Tender designated for and sufficient to pay the
installment.  Interest on the Notes will
be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

The Issuer shall pay
interest on overdue principal (including, without limitation, post petition
interest in a proceeding under any Bankruptcy Law), and overdue interest, to
the extent lawful, at the same rate per
annum borne by the Notes.

 

SECTION 4.02.                                              Maintenance of Office or Agency.

 

The Issuer shall maintain in
the Borough of Manhattan, The City of New York, the office or agency required
under Section 2.03 (which may be an office of the Trustee or an affiliate or
agent of the Trustee or Registrar).  The
Issuer shall give prompt written notice to the Trustee of the location, and 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 Trustee set forth in Section 12.02.

 

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 will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

 

The Issuer hereby initially
designates Wells Fargo Bank, N.A. c/o The Depository Trust Company, 1st Floor
TADS Department, 55 Water Street, New York, New York 10041 as such office of
the Issuer in accordance with Section 2.03.

 

SECTION 4.03.                                              Corporate Existence.

 

Except as otherwise
permitted by Article Five, the Issuer shall do or cause to be done all things
reasonably necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
of its Restricted Subsidiaries in accordance with the respective organizational
documents of each such Restricted Subsidiary and the material rights (charter
and statutory) and material franchises of the Issuer and each of its Restricted
Subsidiaries; provided, however, that the Issuer shall not be
required to preserve any such right, franchise or corporate existence with
respect to itself or any Restricted Subsidiary, if

 

42

 

the loss thereof would not, individually or
in the aggregate, have a material adverse effect on the Issuer and the
Guarantors, taken as a whole.

 

SECTION 4.04.                                              Payment of Taxes.

 

The Issuer and the
Guarantors shall, and shall cause each of the Restricted Subsidiaries to, pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges levied
or imposed upon it or any of the Restricted Subsidiaries or upon the income,
profits or property of it or any of the Restricted Subsidiaries and (b) all
lawful claims for labor, materials and supplies which, in each case, if unpaid,
might by law become a liability or Lien upon the property of it or any of the
Restricted Subsidiaries which would reasonably be expected to have a material
adverse effect on the Issuer and the Guarantors taken as a whole; provided, however,
that the Issuer and the Guarantors shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount the applicability or validity is being contested in good faith by
appropriate actions and for which appropriate provision has been made, or any
such tax, assessment, charge or claim that would not reasonably be expected to
have a material adverse effect on the Issuer and the Guarantors taken as a
whole.

 

SECTION 4.05.                                              Maintenance of Properties and Insurance.

 

The Issuer shall cause all
material properties owned by or leased by it or any of its Restricted
Subsidiaries used or useful to the conduct of its business or the business of
any of its Restricted 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 repairs, renewals, replacements, and betterments
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 4.05
shall prevent the Issuer or any of its Restricted 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 desirable in
the conduct of the business of the Issuer or any such Restricted Subsidiary,
and if such discontinuance or disposal would not, individually or in the
aggregate, have a material adverse effect on the ability of the Issuer or the
Guarantors to perform each of their respective obligations hereunder; provided, further,
that nothing in this Section 4.05 shall prevent the Issuer or any of its
Restricted Subsidiaries from discontinuing or disposing of any properties to
the extent otherwise permitted by this Indenture.

 

SECTION 4.06.                                              Compliance Certificate; Notice of Default.

 

(a)           The Issuer shall deliver to the Trustee, within 120 days
after the close of each fiscal year, a certificate of the Chief Executive Officer
or Chief Financial Officer of the Issuer stating that a review of the
activities of the Issuer and its Subsidiaries has been made under the
supervision of such Officer 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 such Officer signing such
certificate, that to the best of such Officer’s knowledge, the Issuer and the
Guarantors during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such covenant and no Default occurred during such year
and at the

 

43

 

date of such certificate there is no Default
that has occurred and is continuing or, if such signers do know of such
Default, the certificate shall specify such Default and what action, if any,
the Issuer is taking or proposes to take with respect thereto.  Such Certificate shall also notify the
Trustee should the Issuer elect to change the manner in which it fixes the
fiscal year end.

 

(b)           The Issuer shall deliver to the Trustee promptly and in
any event within seven days after any Officer of the Issuer becomes aware of
the occurrence of any Default an Officers’ Certificate specifying the Default
and what action, if any, the Issuer is taking or proposes to take with respect
thereto.

 

SECTION 4.07.                                              Conduct of Business.

 

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

 

SECTION 4.08.                                              Waiver of Stay, Extension or Usury Laws.

 

The Issuer and each
Guarantor covenants (to the extent permitted by applicable law) that it will
not at any time insist upon, plead, 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 that would prohibit or forgive such Issuer or such Guarantor from
paying all or any portion of the principal of and/or interest on the Notes or
the Note Guarantee of any such Guarantor 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 permitted by
applicable law) each hereby expressly waives all benefit or advantage of any such
law, and covenants that it 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 4.09.                                              Change of Control.

 

Upon the occurrence of any
Change of Control, each Holder of Notes will have the right to require that the
Issuer purchase that Holder’s Notes pursuant to a Change of Control Offer (the
“Change of Control Offer”).  In the Change of Control Offer, the Issuer
will offer to pay an amount in cash (the “Change
of Control Purchase Price”) equal to 101% of the principal amount of
Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the
date of purchase.  Within 30 days
following any Change of Control, the Issuer will mail, or cause to be mailed, a
notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to purchase Notes on the date
(the “Change of Control Payment Date”)
specified in such notice, which date shall be a Business Day no earlier than 30
days and no later than 60 days from the date such notice is mailed, pursuant to
the procedures described below.  Such
notice shall state:

 

(1)           that the Change of Control Offer is
being made pursuant to this Section 4.09 and that all Notes tendered and not
withdrawn will be accepted for payment;

 

(2)           the Change of Control Purchase Price
(including the amount of accrued interest) and the Change of Control Payment
Date;

 

44

 

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

 

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

 

(5)           that Holders electing to have a Note
purchased pursuant to a Change of Control Offer will be required to surrender
the Note, with the form entitled “Option of 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 prior to
the Change of Control Payment Date;

 

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

 

(7)           that Holders whose Notes are
purchased only in part will be issued new Notes in a principal amount equal to
the unpurchased portion of the Notes surrendered (equal to $1,000 or an
integral multiple thereof).

 

On or before the Change of
Control Payment Date, the Issuer will, to the extent lawful:

 

(i)            accept for payment all Notes or
portions thereof properly tendered pursuant to the Change of Control Offer;

 

(ii)           deposit with the Paying Agent U.S.
Legal Tender sufficient to pay the Change of Control Purchase Price in respect
of all Notes or portions thereof so tendered; and

 

(iii)          deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers’ Certificate
stating the aggregate principal amount of Notes or portions thereof being
purchased by the Issuer.

 

The Paying Agent will
promptly mail to each Holder of Notes so tendered the Change of Control
Purchase Price for such Notes, and the Trustee will promptly authenticate and
mail (or cause to be transferred by book entry) to each Holder a new Note equal
in principal amount to any unpurchased portion of the Notes surrendered, if
any; provided that each such new
Note will be in a principal amount of $1,000 or an integral multiple thereof.

 

The Issuer will publicly
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.

 

The Issuer will not be
required to make a Change of Control Offer upon a Change of Control if a third
party makes the Change of Control Offer in the manner, at the times and

45

 

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 validly tendered and not withdrawn under such
Change of Control Offer.

 

The Issuer shall cause the
Change of Control Offer to remain open for at least 20 Business Days or for
such longer period as may be required by law. 
The Issuer will comply, and will cause any third party making a Change
of Control Offer to comply, with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with a Change of
Control Offer.  To the extent the
provisions of any applicable securities laws or regulations conflict with the
provisions of this Section 4.09, the Issuer will not be deemed to have breached
their obligations under this Section 4.09 by virtue of complying with such laws
or regulations.

 

SECTION 4.10.                                              Excess Cash Flow Offer.

 

If (a) the Issuer has Excess
Cash Flow for any fiscal year and (b) the Consolidated Leverage Ratio as of the
end of such fiscal year is 2.5 to 1.0 or greater, then no later than the date
that the Issuer is required to file its Form-10-K under the Exchange Act for
such fiscal year (assuming, for this purpose, that the Issuer shall be at all
times subject to Section 13(a) or 15(d) of the Exchange Act), the Issuer shall
make an offer (the “Excess Cash Flow Offer”)
to purchase Notes with an amount equal to 50% of the Excess Cash Flow for such
fiscal year (such percentage, the “Excess
Cash Flow Amount”), at a purchase price in cash equal to 100% of the
principal amount of the Notes, plus accrued and unpaid interest thereon to the
date fixed for the purchase of the Notes pursuant to such Excess Cash Flow
Offer (the “Excess Cash Flow Purchase Price”),
in accordance with provisions of this Section 4.10.  If the Excess Cash Flow Purchase Price for the Notes validly
tendered and not withdrawn by Holders thereof in an Excess Cash Flow Offer
exceeds the Excess Cash Flow Amount for such Excess Cash Flow Offer, the Notes will
be purchased in such Excess Cash Flow Offer on a pro rata basis.  If
the Excess Cash Flow Amount for an Excess Cash Flow Offer exceeds the aggregate
Excess Cash Flow Purchase Price of Notes that are validly tendered and not
withdrawn by Holders thereof in such Excess Cash Flow Offer, the Issuer may use
such excess for any purpose not prohibited by this Indenture.  The Issuer will not be required to make an
Excess Cash Flow Offer if the Excess Cash Flow for any year is less than $5.0
million; provided that any such
lesser amount of Excess Cash Flow (if positive) will be added to the Excess
Cash Flow for each subsequent fiscal year until an Excess Cash Flow Offer is
made.

 

On any date that a Excess
Cash Flow Offer is required to be made (or if such date is not a Business Day,
the succeeding Business Day) the Issuer will mail notice to each Holder
describing, offering to purchase Notes on the date (the “Excess Cash Flow Payment Date”) specified
in such notice, which date shall be a Business Day no earlier than 30 days and
no later than 60 days from the date such notice is mailed, pursuant to the
procedures described below.  Such notice
shall state:

 

(1)           that such Excess Cash Flow Offer is
being made pursuant to this Section 4.10;

 

46

 

(2)           the Excess Cash Flow Purchase Price
and the Excess Cash Flow Payment Date;

 

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

 

(4)           that, unless the Issuer defaults in
making payment therefor, any Note accepted for payment pursuant to the Excess
Cash Flow Offer shall cease to accrue interest after the Excess Cash Flow
Payment Date;

 

(5)           that Holders electing to have a Note
purchased pursuant to a Excess Cash Flow Offer will be required to surrender
the Note, with the form entitled “Option of 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 prior to
the Excess Cash Flow Payment Date;

 

(6)           that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the second
Business Day prior to the Excess Cash Flow Payment Date, a telegram, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;

 

(7)           that if the aggregate principal
amount of Notes surrendered by Holders exceeds the Excess Cash Flow Amount, the
Issuer shall select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Issuer so that only Notes in
denominations of $1,000, or integral multiples thereof, shall be purchased);
and

 

(8)           that Holders whose Notes are
purchased only in part will be issued new Notes in a principal amount equal to
the unpurchased portion of the Notes surrendered (equal to $1,000 or an
integral multiple thereof).

 

On or before the Excess Cash
Flow Payment Date, the Issuer will, to the extent lawful:

 

(i)            accept for payment all Notes or
portions thereof properly tendered pursuant to the Excess Cash Flow Offer,
subject to pro ration if the aggregate Notes tendered exceed the Excess Cash
Flow Amount allocable to the Notes;

 

(ii)           deposit with the Paying Agent U.S.
Legal Tender sufficient to pay the Excess Cash Flow Purchase Price in respect
of all Notes or portions thereof so accepted; and

 

(iii)          deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers’ Certificate
stating the aggregate principal amount of Notes or portions thereof being
purchased by the Issuer.

 

The Paying Agent will
promptly mail to each Holder of Notes so tendered the Excess Cash Flow Purchase
Price for such Notes, and the Trustee will promptly authenticate and

 

47

 

mail (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided
that each such new Note will be in a principal amount of $1,000 or an integral
multiple thereof.  The Issuer will
publicly announce the results of the Excess Cash Flow Offer on or as soon as
practicable after the Excess Cash Flow Payment Date.

 

The Issuer shall cause the
Excess Cash Flow Offer to remain open for at least 20 Business Days or for such
longer period as may be required by law. 
The Issuer will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with an Excess
Cash Flow Offer.  To the extent the
provisions of any applicable securities laws or regulations conflict with the
provisions of this Section 4.10, the Issuer will not be deemed to have breached
their obligations under this Section 4.10 by virtue of complying with such laws
or regulations.

 

SECTION 4.11.                                              Limitations on Additional Indebtedness.

 

The Issuer will not, and
will 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 2.25
to 1.00 (the “Coverage Ratio Exception”).

 

Notwithstanding the above,
each of the following shall be permitted (“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 the greater of (x) $40.0 million and (y) the sum of (i) 85% of the
book value of the net accounts receivable of the Issuer and the Restricted
Subsidiaries plus (ii) 60% of the net book value of inventory of the Issuer and
the Restricted Subsidiaries, in each case calculated on a consolidated basis
and in accordance with GAAP;

 

(2)           the Notes issued on the Issue Date
and the Note Guarantees and 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 (other than
Indebtedness referred to in clauses (1) and (2) above, and after giving effect
to the intended use of proceeds of the Notes);

 

(4)           Indebtedness under Hedging
Obligations 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 4.11, and (b) the notional principal amount of such
Hedging Obligations at the time incurred does not exceed the principal amount
of the Indebtedness

 

48

 

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 workers’
compensation claims, self-insurance obligations or bid, performance 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
bid, performance or surety obligations (in each case other than for an
obligation for money borrowed);

 

(7)           Purchase Money Indebtedness incurred
by the Issuer or any Restricted Subsidiary, and Refinancing Indebtedness
thereof, in an aggregate amount not to exceed at any time outstanding $5.0
million;

 

(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, 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)         any guarantee by the Issuer or any
Restricted Subsidiary of Indebtedness of the Issuer or any Restricted
Subsidiary otherwise permitted under this Section 4.11; and

 

49

 

(13)         other Indebtedness of the Issuer or any
Restricted Subsidiary in an aggregate amount not to exceed $10.0 million at any
time outstanding.

 

For purposes of determining
compliance with this Section 4.11, 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 (13) 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 (13) 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 4.11, guarantees, Liens or
letter of credit obligations supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included so long as
incurred by a Person that could have incurred such Indebtedness.

 

SECTION 4.12.                                              Limitations on Layering Indebtedness.

 

The Issuer will not, and
will 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.

 

For purposes of the
foregoing, no Indebtedness will be deemed to be subordinated in right of
payment to any other Indebtedness of the Issuer or any Restricted Subsidiary
solely by virtue of being unsecured or secured by a junior priority 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 4.13.                                              Limitations on Restricted Payments.

 

The Issuer will not, and
will 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 cannot incur $1.00 of
additional 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

 

50

 

Payments made pursuant to
clause (2), (3), (4) or (5) of the next paragraph), exceeds the sum (the
“Restricted Payments Basket”) of (without duplication):

 

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

 

(b)           100% of the aggregate net cash
proceeds received by the Issuer either (x) as contributions to the common
equity of the Issuer after the Issue Date or (y) from the issuance and sale of
Qualified Equity Interests after the Issue Date, other than (A) any such proceeds
which are used to redeem Notes in accordance with Section 6 of the Notes, or
(B) any such proceeds or assets received from a Subsidiary of the Issuer, plus

 

(c)           the aggregate amount by which
Indebtedness (other than any Subordinated Indebtedness) incurred by the Issuer
or any Restricted Subsidiary subsequent to the Issue Date is reduced on the
Issuer’s balance sheet upon conversion or exchange (other than by a Subsidiary
of the Issuer) into Qualified Equity Interests (less the amount of any cash, or
the fair value of assets, distributed by the Issuer or any Restricted
Subsidiary upon such conversion or exchange), plus

 

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

 

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

 

The foregoing provisions
will not prohibit:

 

(1)           the payment by the Issuer or any
Restricted Subsidiary of any dividend within 60 days after the date of
declaration thereof, if on the date of declaration the payment would have
complied with the provisions of this Indenture;

 

51

 

(2)           the redemption 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 redemption 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 or (b) in exchange for, or out of the proceeds of
the substantially concurrent incurrence of, Refinancing Indebtedness permitted
to be incurred under Section 4.11 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 Sections 4.09 and 4.17 and purchased all
Notes validly tendered pursuant to the relevant offer prior to redeeming such
Subordinated Indebtedness;

 

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

 

(5)           the repurchase or redemption of
Equity Interests of the Issuer from any director, officer or employee of the
Issuer or any Subsidiary of the Issuer upon the death, disability, retirement
or other termination of any such director, officer or employee in an aggregate
amount not to exceed $1.0 million in any fiscal year of the Issuer;

 

provided that (a) in the case of any Restricted
Payment pursuant to clause (3) or (5) 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 that are used to make a payment pursuant to clause
(2) or (3) above shall increase the Restricted Payments Basket.

 

SECTION 4.14.                                              Limitations on Dividend and Other
Restrictions Affecting Restricted Subsidiaries

 

The Issuer will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, 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;

 

52

 

(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 under
agreements existing on the 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 assets permitted under this Indenture to any Person pending
the closing of such sale;

 

(7)           any instrument governing Acquired
Indebtedness, which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person or the
properties or assets of the Person so acquired;

 

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

 

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

 

(10)         Purchase Money Indebtedness incurred in
compliance Section 4.11 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 suppliers or landlords under contracts entered into in
the ordinary course of business; and

 

(12)         any encumbrances or restrictions
imposed by any amendments or refinancings of the contracts, instruments or
obligations referred to in clauses (1) through (11) 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 4.15.                                              Limitations on Transactions with Affiliates.

 

The Issuer will not, and
will 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,

 

53

 

understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (an “Affiliate Transaction”), unless:

 

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

 

(2)           the Issuer delivers to the Trustee:

 

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

 

(b)           with respect to any Affiliate
Transaction involving aggregate value of $10.0 million or more, the
certificates described in the preceding clause (a) and a written opinion as to
the fairness of such Affiliate Transaction to the Issuer or such Restricted
Subsidiary from a financial point of view issued by an Independent Financial
Advisor to the Board of Directors of the Issuer.

 

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; provided, in each case, that no Affiliate of the Issuer (other
than another Restricted Subsidiary) owns Equity Interests of any such
Restricted Subsidiary;

 

(2)           reasonable director, officer and
employee compensation (including bonuses) and other benefits (including
retirement, health, stock option and other benefit plans), travel expense and
entertainment reimbursements and advances, and indemnification arrangements, in
each case approved by the Board of Directors or senior management of the
Issuer;

 

(3)           Restricted Payments of the type
described in clause (1) or (2) of the definition of “Restricted Payment” and
which are made in accordance with Section 4.13;

 

(4)           (x) any agreement in effect on the
Issue Date and disclosed in the Offering Memorandum, 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);

 

54

 

(5)           any transaction with a joint venture
or similar entity which would constitute an Affiliate Transaction solely
because the Issuer or a Restricted Subsidiary owns an equity interest in or
otherwise controls such joint venture or similar entity; provided that no Affiliate of the Issuer
or any of its Subsidiaries other than the Issuer or a Restricted Subsidiary
shall have a beneficial interest in such joint venture or similar entity; and

 

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

 

SECTION 4.16.                                              Limitations 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 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, or any proceeds therefrom, or assign or otherwise convey
any right to receive income or profits therefrom (other than Permitted Liens),
securing any Indebtedness, 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 4.17.                                              Limitations on Asset Sales.

 

The Issuer will not, and
will 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 85% of the total
consideration received in such Asset Sale consists of cash or Cash Equivalents.

 

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

 

(a)           the amount (without duplication) of
any Indebtedness (other than Subordinated Indebtedness) of the Issuer or such
Restricted Subsidiary that is expressly assumed by the transferee in such Asset
Sale and with respect to which the Issuer or such Re-

 

55

 

stricted Subsidiary, as the
case may be, is unconditionally released by the holder of such Indebtedness,

 

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

 

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

 

If at any time any non-cash
consideration received by the Issuer or any Restricted Subsidiary, as the case
may be, pursuant to clause (b) above 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 4.17.

 

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:

 

(1)           prepay or repay debt under any Credit
Facility (for the avoidance of doubt, no permanent commitment reduction under
any revolving portion of any such Credit Facility shall be required in
connection with any such prepayment or repayment);

 

(2)           repay any Indebtedness which was
secured by the assets sold in such Asset Sale; and/or

 

(3)           (A) 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 a 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).

 

The amount of Net Available Proceeds not
applied or invested as provided in this paragraph will constitute “Excess Proceeds.”

 

When the aggregate amount of
Excess Proceeds equals or exceeds $10.0 million, the Issuer will be required to
make an offer to purchase from all Holders and, if applicable, redeem (or make
an offer to do so) any Pari Passu Indebtedness of the Issuer the provisions of
which require the Issuer to 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:

 

56

 

(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) 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 redeemed, the maximum principal amount of Notes and Pari Passu
Indebtedness that may be 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
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 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.

 

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 general corporate purposes, subject to the provisions of
this Indenture.

 

Pending the final
application of any such Net Available Proceeds, the Issuer may temporarily
reduce the revolving Indebtedness under the Credit Facility or otherwise invest
such Net Available Proceeds in any manner that is not prohibited by this
Indenture.

 

In the event of the transfer
of substantially all (but not all) of the assets of the Issuer and the
Restricted Subsidiaries as an entirety to a Person in a transaction covered by
and effected in accordance with Section 5, the successor shall be deemed to
have sold for cash at Fair Market Value the assets of the Issuer and the
Restricted Subsidiaries not so transferred for purposes of this Section 4.17,
and the successor shall comply with the provisions of this Section 4.17 with
respect to such deemed sale as if it were an Asset Sale (with such Fair Market
Value being deemed to be Net Available Proceeds for such purpose).

 

Upon the commencement of a
Net Proceeds Offer, the Issuer shall send, by first class mail, a notice to the
Trustee and to each Holder at is registered address.  The notice shall contain all instructions and materials necessary
to enable such Holder to tender Notes pursuant to the Net Proceeds Offer.  Any Net Proceeds Offer shall be made to all
Holders.  The notice, which shall govern
the terms of the Net Proceeds Offer, shall state:

 

57

 

(1)           that the Net Proceeds Offer is being
made pursuant to this Section;

 

(2)           the Payment Amount, the Offered
Price, and the date on which Notes tendered and accepted for payment shall be
purchased, which date shall be at least 30 days and not later than 60 days from
the date such notices is mailed (the “Net Proceeds Payment Date”);

 

(3)           that any Notes not tendered or
accepted for payment shall continue to accrue interest;

 

(4)           that, unless the Issuer defaults in
making such payment, any Notes accepted for payment pursuant to the Net
Proceeds Offer shall cease to accrue interest on and after the Net Proceeds
Payment Date;

 

(5)           that Holders electing to have any
Notes purchased pursuant to any Net Proceeds Offer shall be required to
surrender the Notes, with the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Note completed, or transfer by book-entry
transfer, to the Issuer, a depository, if appointed by the Issuer, or the
Paying Agent at the address specified in the notice at least three days before
the Net Proceeds Payment Date;

 

(6)           that Holders shall be entitled to
withdraw their election if the Issuer, the Depository or the Paying Agent, as
the case may be, receives, not later than the Net Proceeds Payment Date, a
notice setting forth the name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;

 

(7)           that if the aggregate principal
amount of Notes surrendered by Holders exceeds the Payment Amount, the Issuer
shall select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Issuer so that only Notes in
denominations of $1,000, or integral multiples thereof, shall be purchased);
and

 

(8)           that Holders whose Notes were
purchased only in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered (or transferred by
book-entry).

 

On the Net Proceeds Payment
Date, the Issuer shall, to the extent lawful: 
(1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Net Proceeds Offer, subject to pro ration if the aggregate
Notes tendered exceed the Payment Amount allocable to the Notes; (2) deposit
with the Paying Agent U.S. Legal Tender equal to the lesser of the Payment
Amount allocable to the Notes and the amount sufficient to pay the Offered
Price in respect of all Notes or portions thereof so accepted; and (3) deliver
or cause to be delivered to the Trustee the Notes so accepted together with an
Officers’ Certificate stating the aggregate principal amount of Notes or
portions thereof being repurchased by the Issuer.  The Issuer shall publicly announce the results of the Net
Proceeds Offer on the Net Proceeds Payment Date.

 

The Paying Agent shall
promptly mail to each Holder of Notes so tendered the Offered Price for such
Notes, and the Trustee shall promptly authenticate pursuant to an Authen-

 

58

 

tication Order and mail (or cause to be
transferred by book-entry) to each Holder a new Note equal in principal amount
to any unrepurchased portion of the Notes surrendered, if any; provided that each such new Note shall be
in principal amount of $1,000 or an integral multiple thereof.  However, if the Net Proceeds Payment Date is
on or after an interest record date and on or before the related Interest
Payment Date, any accrued and unpaid interest shall be paid to the Person in
whose name a Note is registered at the close of business on such record date,
and no additional interest shall be payable to Holders who tender Notes
pursuant to the Net Proceeds Offer.

 

The Issuer will 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 4.17, the Issuer
shall comply with the applicable securities laws and regulations and will not
be deemed to have breached its obligations under this Section 4.17 by virtue of
this compliance.

 

SECTION 4.18.                                              Limitations on Designation of Unrestricted
Subsidiaries.

 

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 the first paragraph of Section 4.13, 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.

 

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 (i) the terms of the agreement, contract, arrangement or
understanding are no less favorable to the Issuer or the Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates or (ii) such agreement, contract, arrangement or understanding would
be permitted under Section 4.15;

 

(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 In-

 

59

 

terests 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.

 

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 such Subsidiary and any Liens on assets of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of
such time and, if the Indebtedness is not permitted to be incurred under
Section 4.11 or the Lien is not permitted under Section 4.16, as the case may
be.

 

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.

 

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 4.19.                                              Limitations on Sale and Leaseback
Transactions.

 

The Issuer will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, enter
into any Sale and Leaseback Transaction; provided
that the Issuer or any Restricted Subsidiary may enter into a Sale and
Leaseback Transaction if:

 

(1)           the Issuer or such Restricted
Subsidiary could have (a) incurred the Indebtedness attributable to such Sale
and Leaseback Transaction pursuant to Section 4.11 and (b) incurred a Lien to
secure such Indebtedness without equally and ratably securing the Notes
pursuant to Section 4.16;

 

(2)           the gross cash proceeds of such Sale
and Leaseback Transaction are at least equal to the Fair Market Value of the
asset that is the subject of such Sale and Leaseback Transaction; and

 

60

 

(3)           the transfer of assets in such Sale
and Leaseback Transaction is permitted by, and the Issuer or the applicable
Restricted Subsidiary applies the proceeds of such transaction in accordance
with Section 4.17.

 

SECTION 4.20.                                              Limitations
on the Issuance or Sale of Equity Interests of Restricted Subsidiaries.

 

The Issuer will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, sell or
issue any Equity Interests of any Restricted Subsidiary except (1) to the
Issuer, a Restricted Subsidiary or the minority stockholders of any Restricted
Subsidiary, on a pro rata basis,
(2) to the extent such Equity Interests represent directors’ qualifying shares
or shares required by applicable law to be held by a Person other than the
Issuer or a Restricted Subsidiary, or (3) if immediately after giving effect to
such sale or issuance, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary.

 

SECTION 4.21.                                              Additional Note Guarantees.

 

If, after the Issue Date,
(a) the Issuer or any Restricted Subsidiary shall acquire or create another
Subsidiary (other than a Subsidiary that has been designated an Unrestricted
Subsidiary), (b) any Unrestricted Subsidiary is redesignated a Restricted
Subsidiary or (c) the Issuer otherwise elects to have any Restricted Subsidiary
become a Guarantor, then, in each such case, the Issuer shall cause such
Restricted Subsidiary to:

 

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

 

(2)           deliver to the Trustee one or more
Opinions of Counsel that such supplemental indenture (a) has been duly
authorized, executed and delivered by such Restricted Subsidiary and (b) constitutes
a valid and legally binding obligation of such Restricted Subsidiary in
accordance with its terms.

 

SECTION 4.22.                                              Reports.

 

Whether or not required by
the SEC, so long as any Notes are outstanding, the Issuer will furnish to the
Holders of Notes, or file electronically with the SEC through the SEC’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 SEC 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

 

61

 

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

 

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

 

ARTICLE
FIVE

SUCCESSOR CORPORATION

 

SECTION 5.01.                                              Mergers, Consolidations, Etc.

 

(a)           The Issuer will not, directly or indirectly, in a single
transaction or a series of related transactions, (a) consolidate or merge with
or into another Person (other than a merger with an Affiliate solely for the
purpose of and with the effect of changing the Issuer’s jurisdiction of
incorporation to another State of the United States, 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)
or (b) adopt a Plan of Liquidation unless, in either case:

 

(1)           either:

 

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

 

(b)           the Person formed by or surviving
such consolidation or merger or to which such sale, lease, conveyance or other
disposition shall be made (or, in the case of a Plan of Liquidation, any Person
to which assets are transferred) (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 supplemental indenture in form and substance reasonably
satisfactory to the Trustee, all of the obligations of the Issuer under the
Notes, this Indenture and the Registration Rights Agreement;

 

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

 

(3)           immediately after and giving effect
to such transaction and the assumption of the obligations set forth in clause
(1)(b) above and the incurrence of any Indebtedness

 

62

 

to be incurred in connection
therewith, and the use of any net proceeds therefrom on a pro forma basis, (a)
the Consolidated Net Worth of the Issuer or the Successor, as the case may be,
would be at least equal to the Consolidated Net Worth of the Issuer immediately
prior to such transaction and (b) the Issuer or the Successor, as the case may
be, could incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio
Exception.

 

For purposes of this Section 5.01(a), 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.

 

(b)           Except as provided in Section 10.04 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 will be the surviving
or continuing Person; or

 

(b)           the Person formed by or surviving any
such consolidation or merger is another Guarantor or assumes, by supplemental
indenture 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.

 

(c)           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.

 

(d)           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 the foregoing, 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 conveyance, lease
or transfer is made will 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, will be
released from the obligation to pay the principal of and interest on the Notes
or in respect of its Note Guarantee, as the case may be, and all of the
Issuer’s or such Guarantor’s other obligations and covenants under the Notes,
this Indenture and its Note Guarantee, if applicable.

 

63

 

(e)           Notwithstanding the foregoing, 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.

 

ARTICLE
SIX

DEFAULT AND REMEDIES

 

SECTION 6.01.                                              Events of Default.

 

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

 

(1)           failure by the Issuer to pay interest
on any of the Notes when it becomes due and payable and the continuance of any
such failure for 30 days;

 

(2)           failure by the Issuer to pay the
principal on any of the Notes when it becomes due and payable, whether at
Stated Maturity, upon redemption, upon purchase, upon acceleration or
otherwise;

 

(3)           failure by the Issuer to comply with
Section 5.01 or in respect of its obligations to (a) make a Change of Control
Offer as described under Section 4.09 or (b) make an Excess Cash Flow Offer as
described in Section 4.10;

 

(4)           failure by the Issuer 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;

 

(5)           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 of 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,

 

(b)           results in the acceleration of such
Indebtedness prior to its express final maturity or

 

(c)           results in the commencement of
judicial proceedings to foreclose upon, or to exercise remedies under
applicable law or applicable security documents to take ownership of, the
assets securing such Indebtedness, and

 

in each case, the principal
amount of such Indebtedness, together with any other Indebtedness with respect
to which an event described in clause (a), (b) or (c) has occurred and is
continuing, aggregates $5 million or more;

 

64

 

(6)           one or more judgments or orders that
exceed $5 million in the aggregate (net of amounts covered by insurance or
bonded) for the payment of money have been entered by a court or courts of
competent jurisdiction against the Issuer or any Restricted Subsidiary and such
judgment or judgments have not been satisfied, stayed, annulled or rescinded
within 60 days of being entered;

 

(7)           the Issuer or any Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

 

(a)           commences a voluntary case,

 

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

 

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

 

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

 

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

 

(a)           is for relief against the Issuer or
any Significant Subsidiary as debtor in an involuntary case,

 

(b)           appoints a Custodian of the Issuer or
any Significant Subsidiary or a Custodian for all or substantially all of the
assets of the Issuer or any Significant Subsidiary, or

 

(c)           orders the liquidation of the Issuer
or any Significant Subsidiary,

 

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

 

(9)           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).

 

SECTION 6.02.                                              Acceleration.

 

(a)           If an Event of Default (other than an Event of Default
specified in clause (7) or (8) of Section 6.01 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 immediately.  Upon such
declaration of acceleration, the aggregate principal of

 

65

 

and accrued and unpaid interest on the
outstanding Notes shall become immediately due and payable; 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:

 

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

 

(2)           if all existing Events of Default
have been cured or waived except nonpayment of principal and interest that has
become due solely because of this acceleration;

 

(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)           if the Issuer has paid to the Trustee
its reasonable compensation and reimbursed the Trustee of its expenses,
disbursements and advances; and

 

(5)           in the event of a cure or waiver of
an Event of Default of the type set forth in Section 6.01(7) or (8), 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 clause (7) or (8) of Section 6.01 with respect to the Issuer
occurs, all outstanding Notes shall become due and payable without any further
notice or action.

 

SECTION 6.03.                                              Other Remedies.

 

If a 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 interest on, the Notes or
to enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a
proceeding even if it does not possess any of the Notes or does not produce any
of them in the proceeding.  A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon a Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the 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.

 

Subject to Sections 2.09,
6.07 and 9.02, the Holders of a majority in principal amount of the outstanding
Notes (which may include consents obtained in connection with a tender offer or
exchange offer of Notes) by notice to the Trustee may waive an existing Default
and its consequences, except a Default in the payment of principal of, or
interest on, any Note as specified in Section 6.01(1) or (2).  The Issuer shall deliver to the Trustee an
Officers’ Certificate

 

66

 

stating that the requisite percentage of
Holders have consented to such waiver and attaching copies of such
consents.  When a Default is waived, it
is cured and ceases.

 

SECTION 6.05.                                              Control by Majority.

 

The Holders of not less than
a majority in principal amount of the outstanding Notes may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it.  Subject to Section 7.01, however, the
Trustee may refuse to follow any direction that conflicts with any law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of another Holder, or that may involve the Trustee 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 against any loss or expense caused
by taking such action or following such direction.

 

SECTION 6.06.                                              Limitation on Suits.

 

No Holder will have any
right to institute any proceeding with respect to this Indenture or for any
remedy thereunder, unless the Trustee:

 

(1)           has failed to act for a period of 60
days after receiving written notice of a continuing Event of Default by such
Holder and a request to act by Holders of at least 25% in aggregate principal
amount of Notes outstanding;

 

(2)           has been offered indemnity
satisfactory to it in its reasonable judgment; and

 

(3)           has not received from the Holders of
a majority in aggregate principal amount of the outstanding Notes a direction
inconsistent with such request.

 

However, such limitations do
not apply to a suit instituted by a Holder of any Note for enforcement of
payment of the principal of or interest on such Note on or after the due date
therefor (after giving effect to the grace period specified in Section
6.01(1)).

 

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

 

SECTION 6.07.                                              Rights of Holders To Receive Payment.

 

Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of
principal of, and interest on, a Note, on or after the respective due dates
therefor, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
the Holder.

 

67

 

SECTION 6.08.                                              Collection Suit by Trustee.

 

If a Default in payment of
principal or interest specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Issuer or any other obligor on the Notes for the whole
amount of principal and accrued interest and fees remaining unpaid, together
with interest on overdue principal and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest, in each case
at the rate per annum borne by
the Notes and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

 

SECTION 6.09.                                              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
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders allowed in any judicial proceedings relating to
the Issuer, their creditors or their 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, and any Custodian in
any such judicial proceedings 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 agent and counsel, and any other amounts due the
Trustee under Section 7.07.  Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.  The Trustee shall be entitled to participate
as a member of any official committee of creditors in the matters as it deems
necessary or advisable.

 

SECTION 6.10.                                              Priorities.

 

If the Trustee collects any
money or property pursuant to this Article Six, it shall pay out the money or
property in the following order:

 

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

 

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

 

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

 

Fourth:  to the Issuer or, if applicable, the
Guarantors, as their respective interests may appear.

 

68

 

The Trustee, upon prior
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 and expenses,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit
by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a
Holder or Holders of more than 10% in principal amount of the outstanding
Notes.

 

ARTICLE
SEVEN

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 as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

 

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

 

(1)           The Trustee need perform only those
duties as are specifically set forth herein or in the Trust Indenture Act and
no duties, covenants, responsibilities 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 (including
Officers’ Certificates) or opinions (including Opinions of Counsel) furnished
to the Trustee and conforming to the requirements of this Indenture.  However, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.

 

(c)           Notwithstanding anything to the contrary herein, 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 Section 7.01(b).

 

69

 

(2)           The Trustee shall not be liable for
any error of judgment made in good faith by a Responsible 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.

 

(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 to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of
such funds is not assured to it.

 

(e)           Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject
to this Section 7.01.

 

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

 

(g)           In the absence of bad faith, negligence or willful
misconduct on the part of the Trustee, the Trustee shall not be responsible for
the application of any money by any Paying Agent other than the Trustee.

 

SECTION 7.02.                                              Rights of Trustee.

 

Subject to Section 7.01:

 

(a)           The Trustee may rely conclusively on
any resolution, certificate (including any Officers’ Certificate), statement,
instrument, opinion (including any Opinion of Counsel), notice, request,
direction, consent, order, bond, debenture, or other paper or document believed
by it to be genuine and to have been signed or presented by the proper
Person.  The Trustee need not
investigate any fact or matter stated in the document.

 

(b)           Before the Trustee acts or refrains
from acting, it may require an Officers’ Certificate and an Opinion of Counsel,
which shall conform to the provisions of Section 12.05.  The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel.

 

(c)           The Trustee may act through its
attorneys and agents and shall not be responsible for the misconduct or
negligence of any agent (other than an agent who is an employee of the Trustee)
appointed 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 its rights or powers under this Indenture.

 

70

 

(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
accordance with the advice or opinion of such counsel.

 

(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, order or direction of any of the Holders pursuant to
the provisions of this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby.

 

(g)           The Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate (including any Officers’ Certificate), statement, instrument,
opinion (including any Opinion of Counsel), notice, request, direction,
consent, order, bond, debenture, 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 shall determine to make
such further inquiry or investigation, it shall be entitled, upon reasonable
notice to the Issuer, to examine the books, records, and premises of the
Issuer, personally or by agent or attorney at the sole cost of the Issuer.

 

(h)           The Trustee shall not be required to
give any bond or surety in respect of the performance of its powers and duties
hereunder.

 

(i)            The permissive rights of the Trustee
to do things enumerated in this Indenture shall not be construed as duties.

 

(j)            Except with respect to Section 4.01
and 4.06, the Trustee shall have no duty to inquire as to the performance of
the Issuer with respect to the covenants contained in Article Four.  In addition, the Trustee shall not be deemed
to have knowledge of a Default or an Event of Default except (i) any Default or
Event of Default occurring pursuant to Sections 4.01, 6.01(1) or 6.01(2) or
(ii) any Default or Event of Default of which a Responsible Officer of the
Trustee shall have received written notification from the Issuer or any Holder
of Notes, and such notification references the specific Default or Event of
Default, the Notes, and the Indenture.

 

(k)           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 to each agent, custodian and
other Person employed to act hereunder.

 

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
otherwise deal with the Issuer, its Subsidiaries or its respective Affiliates
with the same rights it would have if it were not Trustee.  Any Agent may do the same with like rights.  However, the Trustee must comply with
Sections 7.10 and 7.11.

 

71

 

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 Notes, and it shall not be responsible for any
statement of the Issuer in this Indenture or any document issued in connection
with the sale of Notes or any statement in the Notes other than the Trustee’s
certificate of authentication.  The
Trustee makes no representations with respect to the effectiveness or adequacy
of this Indenture.

 

SECTION 7.05.                                              Notice of Default.

 

If a Default occurs and is
continuing and is known to the Trustee, the Trustee shall mail to each Holder
notice of the uncured Default within 30 days after the Trustee first receives
knowledge of such Default (other than any Default which is or could mature into
an Event of Default within the meaning of Section 6.01(1) or 6.01(2), in which
case such notice shall be mailed within 30 days after such Default
occurs).  Except in the case of a
Default in complying with the provisions of Article Five or upon Events of
Default specified in Sections 6.01(1) or (2), the Trustee may withhold the
notice if and so long as the Board of Directors, the executive committee, or a
trust committee of directors and/or Responsible Officers, of the Trustee in
good faith determines that withholding the notice is in the interest of the
Holders.

 

SECTION 7.06.                                              Reports by Trustee to Holders.

 

Within 60 days after each
April 15, beginning with April 15, 2005, the Trustee shall, to the extent that
any of the events described in Trust Indenture Act § 313(a) occurred within the
previous twelve months, but not otherwise, mail to each Holder a brief report
dated as of such date that complies with Trust Indenture Act § 313(a).  The Trustee also shall comply with Trust
Indenture Act §§ 313(b), 313(c) and 313(d).

 

A copy of each report at the
time of its mailing to Holders shall be mailed to the Issuer and filed with the
SEC and each securities exchange, if any, on which the Notes are listed.

 

The Issuer shall notify the
Trustee if the Notes become listed on any securities exchange or of any
delisting thereof and the Trustee shall comply with Trust Indenture Act §
313(d).

 

SECTION 7.07.                                              Compensation and Indemnity.

 

The Issuer shall pay to the
Trustee from time to time such compensation as the Issuer and the Trustee shall
from time to time agree in writing for its services hereunder.  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 disbursements, expenses and advances (including
reasonable fees and expenses of the Trustee’s agents and counsel) incurred or
made by it in addition to the compensation for its services, except any such
disbursements, expenses and advances as may be attributable to the Trustee’s
negligence, bad faith or willful misconduct.

 

72

 

The Issuer shall indemnify
each of the Trustee and any predecessor Trustee and their agents for, and hold
them harmless against, any and all loss, damage, claims including taxes (other
than taxes based upon, measured by or determined by the income of the Trustee),
liability or expense incurred by them except for such actions to the extent
caused by any negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the acceptance or administration of this
trust including the reasonable costs and expenses of defending themselves
against or investigating any claim or liability in connection with the exercise
or performance of any of the Trustee’s rights, powers or duties hereunder.  The Trustee shall notify the Issuer promptly
of any claim asserted against the Trustee or any of its agents for which it may
seek indemnity.  The Issuer shall defend
the claim and the Trustee shall cooperate in the defense.  The Trustee and its agents subject to the
claim may have separate counsel and the Issuer shall pay the reasonable fees
and expenses of such counsel; provided,
however, that the Issuer will not
be required to pay such fees and expenses if there is no conflict of interest
between the Issuer and the Trustee and its agents subject to the claim in
connection with such defense as reasonably determined by the Trustee.  The Issuer need not pay for any settlement
made without its written consent.  The
Issuer need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through the Trustee’s
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 against all money or property held or collected by the Trustee, in
its capacity as Trustee, except money or property held in trust to pay
principal and interest on particular Notes; provided
that the Issuer shall not be deemed to have granted a Lien pursuant to any
action taken under this paragraph.

 

When the Trustee incurs
expenses or renders services after a Default specified in Section 6.01(7) or
(8) occurs, such expenses and the compensation for such services shall be paid
to the extent allowed under any Bankruptcy Law.

 

Notwithstanding any other
provision in this Indenture, the foregoing provisions of this Section 7.07
shall survive the satisfaction and discharge of this Indenture or the appointment
of a successor Trustee.

 

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 Issuer and the Trustee and may
appoint a successor Trustee.  The Issuer
may remove the Trustee if:

 

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

 

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

 

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

 

(4)           the Trustee becomes incapable of
acting.

 

73

 

If the Trustee resigns or is
removed or if a vacancy exists in the office of Trustee for any reason, the
Issuer shall notify each Holder of such event and shall promptly appoint a
successor Trustee.  Within one year
after the successor Trustee takes office, the Holders of a majority in
principal amount of 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, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.07, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture.  A successor
Trustee shall 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 any court of competent
jurisdiction for the appointment of a successor Trustee at the expense of the
Issuer.

 

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

 

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

 

SECTION 7.09.                                              Successor Trustee by Merger, Etc.

 

If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business to, another corporation, the resulting, surviving or
transferee corporation without any further act shall, if such resulting,
surviving or transferee corporation is otherwise eligible hereunder, be the
successor Trustee; provided that
such corporation shall be otherwise qualified and eligible under this Article
Seven.

 

SECTION 7.10.                                              Eligibility; Disqualification.

 

This Indenture shall always
have a Trustee who satisfies the requirement of Trust Indenture Act §§
310(a)(1), 310(a)(2) and 310(a)(5).  The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition.  The Trustee shall comply with Trust
Indenture Act § 310(b); provided,
however, that there shall be
excluded from the operation of Trust Indenture Act § 310(b)(1) any indenture or
indentures under which other securities, or certificates of interest or
participation in other securities, of the Issuer are outstanding, if the
requirements for such exclusion set forth in Trust Indenture Act § 310(b)(1)
are met.  The provisions of Trust
Indenture Act § 310 shall apply to the Issuer and any other obligor of the
Notes.

 

74

 

SECTION 7.11.                                              Preferential Collection of Claims Against the
Issuer.

 

The Trustee, in its capacity
as Trustee hereunder, shall comply with Trust Indenture Act § 311(a), excluding
any creditor relationship listed in Trust Indenture Act § 311(b).  A Trustee who has resigned or been removed
shall be subject to Trust Indenture Act § 311(a) to the extent indicated.

 

ARTICLE EIGHT

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.01.                                              Termination of the Issuer’s Obligations.

 

The Issuer may terminate its
obligations under the Notes and this Indenture and the obligations of the
Guarantors under the Note Guarantees and this Indenture and this Indenture
shall cease to be of further effect, except those obligations referred to in
the penultimate paragraph of this Section 8.01, if:

 

(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 have
become due and payable, will become due and payable, or may be called for
redemption, within one year or have been called for redemption pursuant to
Section 5 or Section 6 of the Notes and the Issuer has irrevocably deposited or
caused to be deposited with the Trustee funds in trust sufficient to pay and
discharge the entire Indebtedness (including all principal and accrued
interest) on the Notes not theretofore delivered to the Trustee for
cancellation,

 

(b)           the Issuer has paid all 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 Redemption Date, as the case may be.

 

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.

 

In the case of clause (2) of
this Section 8.01, and subject to the next sentence and notwithstanding the
foregoing paragraph, the Issuer’s obligations in Sections 2.05, 2.06, 2.07,
2.08, 4.01, 4.02, 4.03 (as to legal existence of the Issuer only), 7.07, 8.05
and 8.06 shall survive until the Notes are no longer outstanding pursuant to
the last paragraph of Section 2.08. 
After

 

75

 

the Notes are no longer outstanding, the
Issuer’s obligations in Sections 7.07, 8.05 and 8.06 shall survive.

 

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

 

SECTION 8.02.                                              Legal Defeasance and Covenant Defeasance.

 

(a)           The Issuer may, at its option and at any time, elect to
have either paragraph (b) or (c) below be applied to all outstanding Notes upon
compliance with the conditions set forth in Section 8.03.

 

(b)           Upon the Issuer’s exercise under Section 8.02(a) hereof of
the option applicable to this Section 8.02(b), the Issuer and the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.03,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means
that the Issuer and the Guarantors shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes and the Note
Guarantees, which shall thereafter be deemed to be “outstanding” only for the
purposes of Section 8.04 hereof and the other Sections of this Indenture
referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Notes and this Indenture and the Guarantors shall be
deemed to have satisfied all of their obligations under the Note Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Issuer,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder:

 

(i)            the rights of Holders of outstanding
Notes to receive, solely from the trust fund described in Section 8.04 hereof,
and as more fully set forth in such Section 8.04, payments in respect of the
principal of, premium, if any, and interest on such Notes when such payments
are due;

 

(ii)           the Issuer’s obligations with respect
to such Notes under Article Two and Section 4.02 hereof;

 

(iii)          the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Issuer’s obligations in connection
therewith; and

 

(iv)          the provisions of this Article Eight
applicable to Legal Defeasance.

 

Subject
to compliance with this Article Eight, the Issuer may exercise its option under
this Section 8.02(b) notwithstanding the prior exercise of its option under
Section 8.02(c) hereof.

 

(c)           Upon the Issuer’s exercise under paragraph (a) hereof of
the option applicable to this paragraph (c), the Issuer and the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.03
hereof, be released from their respective obligations under

 

76

 

the covenants contained in Sections 4.03
(other than with respect to the legal existence of the Issuer), 4.04, 4.05,
4.07 and 4.09 through 4.22, clause (3) of Section 5.01(a) and Article Eleven
hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.03 are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall
thereafter be deemed not “outstanding” for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
“outstanding” for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes).  For this purpose, Covenant Defeasance means
that, with respect to the outstanding Notes, the Issuer and the Guarantors 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 an Event of
Default under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.  In addition, upon the Issuer’s exercise
under paragraph (a) hereof of the option applicable to this paragraph (c),
subject to the satisfaction of the conditions set forth in Section 8.03 hereof,
clauses (3) (other than with respect to Section 5.01), (5), (6) and (9) of
Section 6.01 hereof shall not constitute Events of Default.

 

SECTION 8.03.                                              Conditions to Legal Defeasance or Covenant
Defeasance.

 

The following shall be the
conditions to the application of either Section 8.02(b) or 8.02(c) hereof to
the outstanding Notes:

 

(1)           the Issuer must irrevocably deposit
with the Trustee, in trust, 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 reinvestment), in the opinion of a nationally recognized
firm of independent public accountants selected by the Issuer, to pay the
principal of and interest on the Notes on the stated date for payment or on the
Redemption Date of the principal or installment of principal of or interest on
the Notes,

 

(2)           in the case of Legal Defeasance, the
Issuer shall have delivered to the Trustee an Opinion of Counsel in the United
States 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 U.S. federal income tax law,

 

in either case to the effect
that, and based thereon this 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 such 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,

 

77

 

(3)           in the case of Covenant Defeasance,
the Issuer shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the Holders
will not recognize income, gain or loss for U.S. federal income tax purposes as
a result of such Covenant 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 the Covenant Defeasance had not occurred,

 

(4)           no Default shall have occurred and be
continuing on the date of such deposit (other than a Default resulting from the
borrowing of funds to be applied to such deposit),

 

(5)           the Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a
Default under this Indenture or a default under 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),

 

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

 

(7)           the Issuer shall have delivered to
the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating
that the conditions 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 8.03 have been complied with.

 

SECTION 8.04.                                              Application of Trust Money.

 

The Trustee or Paying Agent
shall hold in trust U.S. Legal Tender and U.S. Government Obligations deposited
with it pursuant to this Article Eight, and shall apply the deposited U.S.
Legal Tender and the money from U.S. Government Obligations in accordance with
this Indenture to the payment of the principal of and the interest on the
Notes.  The Trustee shall be under no
obligation to invest said U.S. Legal Tender and U.S. Government Obligations,
except as it may agree with the Issuer.

 

The Issuer shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Legal Tender and U.S. Government Obligations
deposited pursuant to Section 8.03 or the principal and interest received in
respect thereof, other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.

 

Anything in this Article
Eight to the contrary notwithstanding, the Trustee shall deliver or pay to the
Issuer from time to time upon the Issuer’s request any U.S. Legal Tender and
U.S. Government Obligations held by it as provided in Section 8.03 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certifica-

 

78

 

tion thereof delivered to the Trustee, are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.

 

SECTION 8.05.                                              Repayment to the Issuer.

 

The Trustee and the Paying
Agent shall pay to the Issuer upon request any money held by them for the
payment of principal or interest that remains unclaimed for two years; provided that the Trustee or such Paying
Agent, before being required to make any payment, may at the expense of the
Issuer cause to be published once in a newspaper of general circulation in the
City of New York or mail to each Holder entitled to such money notice that such
money remains unclaimed and that after a date specified therein which shall be
at least 30 days from the date of such publication or mailing any unclaimed
balance of such money then remaining will be repaid to the Issuer.  After payment to the Issuer, Holders entitled
to such money must look to the Issuer for payment as general creditors unless
an applicable law designates another Person.

 

SECTION 8.06.                                              Reinstatement.

 

If the Trustee or Paying
Agent is unable to apply any U.S. Legal Tender and U.S. Government Obligations
in accordance with this Article Eight 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, or if the
funds deposited with the Trustee to effect Covenant Defeasance are insufficient
to pay the principal of, and interest on, the Notes when due, the Issuer’s
obligations under this Indenture, and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to this Article Eight until such
time as the Trustee or Paying Agent is permitted to apply all such U.S. Legal
Tender and U.S. Government Obligations in accordance with this Article Eight; provided that if the Issuer has made any
payment of interest on, or principal of, any Notes because of the reinstatement
of its obligations, the Issuer shall be subrogated to the rights of the Holders
of such Notes to receive such payment from the U.S. Legal Tender and U.S.
Government Obligations held by the Trustee or Paying Agent.

 

ARTICLE
NINE

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION 9.01.                                              Without Consent of Holders.

 

The Issuer and the Trustee,
together, 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 obligations to the Holders in the case of a merger, consolidation or
sale of all or substantially all of the assets, in accordance with Article
Five;

 

79

 

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

 

(5)           to add any Restricted Subsidiary of
the Issuer as a Guarantor;

 

(6)           to make any change that would not
materially adversely affect the rights of any Holder; or

 

(7)           in the case of this Indenture, to
comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act;

 

provided that the Issuer has delivered to the Trustee
an Opinion of Counsel and an Officers’ Certificate, each stating that such
amendment or supplement complies with the provisions of this Section 9.01.

 

SECTION 9.02.                                              With Consent of Holders.

 

(a)           Subject to Section 6.07, the Issuer and the Trustee,
together, with the written consent (which may include consents obtained in
connection with a tender offer or exchange offer for Notes) of the Holder or
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding may amend or supplement this Indenture, the Notes or the Note
Guarantees, without notice to any other Holders.  Subject to Section 6.07, the Holder or Holders of a majority in
aggregate principal amount of the outstanding Notes may waive compliance with
any provision of this Indenture, the Notes or the Note Guarantees without
notice to any other Holders;

 

(b)           Notwithstanding Section 9.02(a), without the consent of
each Holder affected, no amendment or waiver may:

 

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

 

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

 

(3)           reduce any premium payable upon
optional redemption of the Notes, or change the date on, or the circumstances
under, which any Notes are subject to redemption (other than provisions of
Section 4.09 and Section 4.17, except that if a Change of Control has occurred,
no amendment or other modification of the obligation of the Issuer to make a
Change of Control Offer relating to such Change of Control shall be made
without the consent of each Holder of the Notes affected);

 

(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 affecting the ranking of the Notes or
any Note Guarantee in a manner that adversely affects the Holders;

 

80

 

(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 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 on the Notes on or after the due
date therefor or to institute suit for the enforcement of any payment on the
Notes; or

 

(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 Section 9.01 or
9.02.

 

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

 

(d)           A consent to any amendment, supplement or waiver under
this Indenture by any Holder given in connection with an exchange (in the case
of an exchange offer) or a tender (in the case of a tender offer) of such
Holder’s Notes will not be rendered invalid by such tender or exchange.

 

(e)           After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Issuer shall mail to the Holders affected
thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Issuer to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amendment, supplement or waiver.

 

SECTION 9.03.                                              Compliance with the Trust Indenture Act.

 

From the date on which this
Indenture is qualified under the Trust Indenture Act, every amendment, waiver
or supplement of this Indenture, the Notes or the Note Guarantees shall comply
with the Trust Indenture Act as then in effect.

 

SECTION 9.04.                                              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.  However, any such Holder or subsequent Holder may revoke the
consent as to his Note or portion of his 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

 

81

 

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, which
record date shall be prior to the first solicitation of such consent.  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 120 days after such record date.  The Issuer shall inform the Trustee in
writing of the fixed record date if applicable.

 

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 9.02(b),
in which case, the amendment, supplement or waiver shall bind only each Holder
of a Note 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;
provided that any such waiver
shall not impair or affect the right of any Holder to receive payment of
principal of, and interest on, a Note, on or after the respective due dates
therefor, or to bring suit for the enforcement of any such payment on or after
such respective dates without the consent of such Holder.

 

SECTION 9.05.                                              Notation on or Exchange of Notes.

 

If an amendment, supplement
or waiver changes the terms of a Note, the Issuer may require the Holder of the
Note to deliver it to the Trustee.  The
Issuer shall provide the Trustee with an appropriate notation on the Note about
the changed terms and cause the Trustee to return it to the Holder at the
Issuer’s expense.  Alternatively, if the
Issuer or the Trustee so determines, the Issuer in exchange for the Note shall
issue, and the Trustee shall authenticate, a new Note that reflects the changed
terms.  Failure to make the appropriate
notation or issue a new Note shall not affect the validity and effect of such
amendment, supplement or waiver.

 

SECTION 9.06.                                              Trustee To Sign Amendments, Etc.

 

The Trustee shall execute
any amendment, supplement or waiver authorized pursuant to this Article Nine; provided that 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.  The Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
and an Officers’ Certificate each stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Nine is authorized or
permitted by this Indenture.  Such
Opinion of Counsel shall be at the expense of the Issuer.

 

82

 

ARTICLE
TEN

NOTE GUARANTEE

 

SECTION 10.01.                                        Unconditional Guarantee.

 

Subject to the provisions of
this Article Ten, each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Issuer or any other Guarantors
to the Holders or the Trustee hereunder or thereunder:  (a) (x) the due and punctual payment of the
principal of, premium, if any, and interest on the Notes when and as the same
shall become due and payable, whether at maturity, upon redemption or
repurchase, by acceleration or otherwise, (y) the due and punctual payment of
interest on the overdue principal and (to the extent permitted by law)
interest, if any, on the Notes and (z) the due and punctual payment and
performance of all other obligations of the Issuer and all other obligations of
the other Guarantors (including under the Note Guarantees), in each case, to
the Holders or the Trustee hereunder or thereunder (including amounts due the
Trustee under Section 7.07 hereof), all in accordance with the terms hereof and
thereof (collectively, the “Guarantee
Obligations”); and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, the due and punctual
payment and performance of Guarantee Obligations in accordance with the terms
of the extension or renewal, whether at maturity, upon redemption or
repurchase, by acceleration or otherwise. 
Failing payment when due of any amount so guaranteed, or failing
performance of any other obligation of the Issuer to the Holders under this
Indenture or under the Notes, for whatever reason, each Guarantor shall be
obligated to pay, or to perform or cause the performance of, the same immediately.  A Default under this Indenture or the Notes
shall constitute an event of default under the Note Guarantees, and shall
entitle the Holders of Notes to accelerate the obligations of the Guarantors
thereunder in the same manner and to the same extent as the obligations of the
Issuer.

 

Each of the Guarantors
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof,
any release of any other Guarantor, the recovery of any judgment against the
Issuer, any action to enforce the same, whether or not a Note Guarantee is
affixed to any particular Note, or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor.  To the fullest extent permitted by law, each
of the Guarantors hereby waives the benefit of 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 its Note Guarantee
shall not be discharged except by complete performance of the obligations
contained in the Notes, this Indenture and this Note Guarantee.  This Note Guarantee is a guarantee of
payment and not of collection.  If any
Holder or the Trustee is required by any court or otherwise to return to the
Issuer or to any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Issuer or such Guarantor, any amount
paid by the Issuer or such Guarantor to the Trustee or such Holder, this Note
Guar-

 

83

 

antee, to the extent theretofore discharged,
shall be reinstated in full force and effect. 
Each Guarantor further agrees that, as between it, on the one hand, and
the Holders of Notes and the Trustee, on the other hand, (a) subject to this
Article Ten, the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (b) in the
event of any acceleration of such obligations as provided in Article Six
hereof, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantors for the purpose of this Note
Guarantee.

 

SECTION 10.02.                                        Limitation on Guarantor Liability.

 

Each Subsidiary Guarantor,
and by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal, foreign or state law to the extent applicable to any Note
Guarantee.  To effectuate the foregoing
intention, the Trustee, the Holders and the Subsidiary Guarantors hereby
irrevocably agree that the obligations of such Guarantor under its Note
Guarantee and this Article Ten shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor (including any guarantee under the Credit Agreement)  that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Guarantor under this Article Ten, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.  Each
Subsidiary Guarantor that makes a payment for distribution under its Note
Guarantee is entitled to a contribution from each other Subsidiary Guarantor in
a pro rata amount based on the
adjusted net assets of each Subsidiary Guarantor.

 

SECTION 10.03.                                        Execution and Delivery of Note Guarantee.

 

To further evidence its Note
Guarantee set forth in Section 10.01, each Guarantor hereby agrees that a
notation of such Note Guarantee, substantially in the form of Exhibit E
hereto, shall be endorsed on each Note authenticated and delivered by the
Trustee.  Such Note Guarantee shall be
executed on behalf of each Guarantor by either manual or facsimile signature of
one Officer or other person duly authorized by all necessary corporate action
of each Guarantor who shall have been duly authorized to so execute by all
requisite corporate action.  The
validity and enforceability of any Note Guarantee shall not be affected by the
fact that it is not affixed to any particular Note.

 

Each of the Guarantors
hereby agrees that its Note Guarantee set forth in Section 10.01 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 this Indenture or a Note Guarantee no longer holds that
office at the time the Trustee authenticates the Note on which such Note
Guarantee is endorsed or at any time thereafter, such Guarantor’s Note
Guarantee of such Note shall nevertheless be valid.

 

84

 

The delivery of any Note by
the Trustee, after the authentication thereof hereunder, shall constitute due
delivery of any Note Guarantee set forth in this Indenture on behalf of each
Guarantor.

 

SECTION 10.04.                                        Release of a Subsidiary Guarantor.

 

A Subsidiary Guarantor shall
be released from 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 or any Subsidiary of the Issuer; 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 this Indenture,
upon effectiveness of such designation or when it first ceases to be a
Restricted Subsidiary, respectively.

 

The Trustee shall execute an
appropriate instrument prepared by the Issuer evidencing the release of a
Guarantor from its obligations under its Note Guarantee upon receipt of a
request by the Issuer or such Guarantor accompanied by an Officers’ Certificate
and an Opinion of Counsel certifying as to the compliance with this Section
10.04; provided, however, that the legal counsel delivering
such Opinion of Counsel may rely as to matters of fact on one or more Officers’
Certificates of the Issuer.

 

Except as set forth in
Articles Four and Five and this Section 10.04, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or merger of a
Guarantor with or into the Issuer or another Guarantor or shall prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Issuer or another Guarantor.

 

SECTION 10.05.                                        Waiver of Subrogation.

 

Until this Indenture is
discharged and all of the Notes are discharged and paid in full, each Guarantor
hereby irrevocably waives and agrees not to exercise any claim or other rights
which it may now or hereafter acquire against the Issuer that arise from the existence,
payment, performance or enforcement of the Issuer’s obligations under the Notes
or this Indenture and such Guarantor’s obligations under this Note Guarantee
and this Indenture, in any such instance including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution,
indemnification, and any right to participate in any claim or remedy of the
Holders against the Issuer, whether or not such claim, remedy or right arises
in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Issuer, directly or
indirectly, in cash or other assets or by setoff or in any other manner,
payment or security on account of such claim or other rights.  If any amount shall be paid to any Guarantor
in violation of the preceding sentence and any amounts owing to the Trustee or
the Holders of Notes under the Notes, this Indenture, or any other document or
instrument delivered under or in

 

85

 

connection with such agreements or
instruments, shall not have been paid in full, such amount shall have been
deemed to have been paid to such Guarantor for the benefit of, and held in
trust for the benefit of, the Trustee or the Holders and shall forthwith be
paid to the Trustee for the benefit of itself or such Holders to be credited
and applied to the obligations in favor of the Trustee or the Holders, as the
case may be, whether matured or unmatured, in accordance with the terms of this
Indenture.  Each Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by this Indenture and that the waiver set forth in
this Section 10.05 is knowingly made in contemplation of such benefits.

 

SECTION 10.06.                                        Immediate Payment.

 

Each Guarantor agrees to
make immediate payment to the Trustee on behalf of the Holders of all Guarantee
Obligations owing or payable to the respective Holders upon receipt of a demand
for payment therefor by the Trustee to such Guarantor in writing.

 

SECTION 10.07.                                        No Setoff.

 

Each payment to be made by a
Guarantor hereunder in respect of the Guarantee Obligations shall be payable in
the currency or currencies in which such Guarantee Obligations are denominated,
and, to the fullest extent permitted by law, shall be made without setoff,
counterclaim, reduction or diminution of any kind or nature.

 

SECTION 10.08.                                        Guarantee Obligations Absolute.

 

The obligations of each
Guarantor hereunder are and shall be absolute and unconditional and any monies
or amounts expressed to be owing or payable by each Guarantor hereunder which
may not be recoverable from such Guarantor on the basis of a Note Guarantee
shall be recoverable from such Guarantor as a primary obligor and principal
debtor in respect thereof.

 

SECTION 10.09.                                        Note Guarantee Obligations Continuing.

 

The obligations of each
Guarantor hereunder shall be continuing and shall remain in full force and
effect until all such obligations have been paid and satisfied in full.  Each Guarantor agrees with the Trustee that
it will from time to time deliver to the Trustee suitable acknowledgments of
this continued liability hereunder and under any other instrument or
instruments in such form as counsel to the Trustee may advise and as will prevent
any action brought against it in respect of any default hereunder being barred
by any statute of limitations now or hereafter in force and, in the event of
the failure of a Guarantor so to do, it hereby irrevocably, until this
Indenture has been discharged, appoints the Trustee the attorney and agent of
such Guarantor to make, execute and deliver such written acknowledgment or
acknowledgments or other instruments as may from time to time become necessary
or advisable, in the judgment of the Trustee on the advice of counsel, to fully
maintain and keep in force the liability of such Guarantor hereunder.

 

86

 

SECTION 10.10.                                        Note Guarantee Obligations Not Reduced.

 

The obligations of each
Guarantor hereunder shall not be satisfied, reduced or discharged solely by the
payment of such principal, premium, if any, interest, fees and other monies or
amounts as may at any time prior to discharge of this Indenture pursuant to
Article Eight be or become owing or payable under or by virtue of or otherwise
in connection with the Notes or this Indenture.

 

SECTION 10.11.                                        Note Guarantee Obligations Reinstated.

 

The obligations of each
Guarantor hereunder shall continue to be effective or shall be reinstated, as
the case may be, if at any time any payment which would otherwise have reduced
the obligations of any Guarantor hereunder (whether such payment shall have
been made by or on behalf of the Issuer or by or on behalf of a Guarantor) is
rescinded or reclaimed from any of the Holders upon the insolvency, bankruptcy,
liquidation or reorganization of the Issuer or any Guarantor or otherwise, all
as though such payment had not been made. 
If demand for, or acceleration of the time for, payment by the Issuer or
any other Guarantor is stayed upon the insolvency, bankruptcy, liquidation or
reorganization of the Issuer or such Guarantor, all such Indebtedness otherwise
subject to demand for payment or acceleration shall nonetheless be payable by
each Guarantor as provided herein.

 

SECTION 10.12.                                        Note Guarantee Obligations Not Affected.

 

To the fullest extent
permitted by law, the obligations of each Guarantor hereunder shall not be
affected, impaired or diminished in any way by any act, omission, matter or
thing whatsoever, occurring before, upon or after any demand for payment
hereunder (and whether or not known or consented to by any Guarantor or any of
the Holders) which, but for this provision, might constitute a whole or partial
defense to a claim against any Guarantor hereunder or might operate to release
or otherwise exonerate any Guarantor from any of its obligations hereunder or
otherwise affect such obligations, whether occasioned by default of any of the
Holders or otherwise, including, without limitation:

 

(a)           any limitation of status or power, disability, incapacity
or other circumstance relating to the Issuer or any other Person, including any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, winding-up or other proceeding involving or affecting the Issuer
or any other Person;

 

(b)           any irregularity, defect, unenforceability or invalidity
in respect of any indebtedness or other obligation of the Issuer or any other
Person under this Indenture, the Notes or any other document or instrument;

 

(c)           any failure of the Issuer or any other Guarantor, whether
or not without fault on its part, to perform or comply with any of the
provisions of this Indenture, the Notes or any Note Guarantee, or to give
notice thereof to a Guarantor;

 

87

 

(d)           the taking or enforcing or exercising or the refusal or
neglect to take or enforce or exercise any right or remedy from or against the
Issuer or any other Person or their respective assets or the release or
discharge of any such right or remedy;

 

(e)           the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the Issuer
or any other Person;

 

(f)            any change in the time, manner or place of payment of, or
in any other term of, any of the Notes, or any other amendment, variation,
supplement, replacement or waiver of, or any consent to departure from, any of
the Notes or this Indenture, including, without limitation, any increase or
decrease in the principal amount of or premium, if any, or interest on any of
the Notes;

 

(g)           any change in the ownership, control, name, objects,
businesses, assets, capital structure or constitution of the Issuer or a
Guarantor;

 

(h)           any merger or amalgamation of the Issuer or a Guarantor
with any Person or Persons;

 

(i)            the occurrence of any change in the laws, rules,
regulations or ordinances of any jurisdiction by any present or future action
of any governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of the
Guarantee Obligations or the obligations of a Guarantor under its Note
Guarantee; and

 

(j)            any other circumstance, including release of a Guarantor
pursuant to Section 10.04 (other than by complete, irrevocable payment) that
might otherwise constitute a legal or equitable discharge or defense of the
Issuer under this Indenture or the Notes or of a Guarantor in respect of its
Note Guarantee hereunder.

 

SECTION 10.13.                                        Waiver.

 

Without in any way limiting
the provisions of Section 10.01, each Guarantor hereby waives notice of
acceptance hereof, notice of any liability of any Guarantor hereunder, notice
or proof of reliance by the Holders upon the obligations of any Guarantor hereunder,
and diligence, presentment, demand for payment on the Issuer, protest, notice
of dishonor or non-payment of any of the Guarantee Obligations, or other notice
or formalities to the Issuer or any Guarantor of any kind whatsoever.

 

SECTION 10.14.                                        No Obligation to Take Action Against the
Issuer.

 

Neither the Trustee nor any
other Person shall have any obligation to enforce or exhaust any rights or
remedies against the Issuer or any other Person or any property of the Issuer
or any other Person before the Trustee is entitled to demand payment and
performance by any or all Guarantors of their liabilities and obligations under
their Note Guarantees or under this Indenture.

 

88

 

SECTION 10.15.                                        Dealing with the Issuer and Others.

 

The Holders, without
releasing, discharging, limiting or otherwise affecting in whole or in part the
obligations and liabilities of any Guarantor hereunder and without the consent
of or notice to any Guarantor, may

 

(a)           grant time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the Issuer
or any other Person;

 

(b)           take or abstain from taking security or collateral from
the Issuer or from perfecting security or collateral of the Issuer;

 

(c)           release, discharge, compromise, realize, enforce or
otherwise deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given by the
Issuer or any third party with respect to the obligations or matters
contemplated by this Indenture or the Notes;

 

(d)           accept compromises or arrangements from the Issuer;

 

(e)           apply all monies at any time received from the Issuer or
from any security upon such part of the Guarantee Obligations as the Holders
may see fit or change any such application in whole or in part from time to
time as the Holders may see fit; and

 

(f)            otherwise deal with, or waive or modify their right to
deal with, the Issuer and all other Persons and any security as the Holders or
the Trustee may see fit.

 

SECTION 10.16.                                        Default and Enforcement.

 

If any Guarantor fails to
pay in accordance with Section 10.06 hereof, the Trustee may proceed in its
name as trustee hereunder in the enforcement of the Note Guarantee of any such
Guarantor and such Guarantor’s obligations thereunder and hereunder by any
remedy provided by law, whether by legal proceedings or otherwise, and to
recover from such Guarantor the obligations.

 

SECTION 10.17.                                        Acknowledgment.

 

Each Guarantor hereby acknowledges
communication of the terms of this Indenture and the Notes and consents to and
approves of the same.

 

SECTION 10.18.                                        Costs and Expenses.

 

Each Guarantor shall pay on
demand by the Trustee any and all reasonable costs, fees and expenses
(including, without limitation, reasonable legal fees on a solicitor and client
basis) incurred by the Trustee, its agents, advisors and counsel or any of the
Holders in enforcing any of their rights under any Note Guarantee.

 

89

 

SECTION 10.19.                                        No Merger or Waiver; Cumulative Remedies.

 

No Note Guarantee shall
operate by way of merger of any of the obligations of a Guarantor under any
other agreement, including, without limitation, this Indenture.  No failure to exercise and no delay in
exercising, on the part of the Trustee or the Holders, any right, remedy, power
or privilege hereunder or under this Indenture or the Notes, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder or under this Indenture or the Notes preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege.  The rights, remedies,
powers and privileges in the Note Guarantee and under this Indenture, the Notes
and any other document or instrument between a Guarantor and/or the Issuer and
the Trustee are cumulative and not exclusive of any rights, remedies, powers
and privilege provided by law.

 

SECTION 10.20.                                        Survival of Note Guarantee Obligations.

 

Without prejudice to the
survival of any of the other obligations of each Guarantor hereunder, the
obligations of each Guarantor under Section 10.01 shall survive the payment in
full of the Guarantee Obligations and shall be enforceable against such
Guarantor, to the fullest extent permitted by law, without regard to and
without giving effect to any defense, right of offset or counterclaim available
to or which may be asserted by the Issuer or any Guarantor, other than that the
Indenture has been discharged.

 

SECTION 10.21.                                        Note Guarantee in Addition to Other Guarantee
Obligations.

 

The obligations of each
Guarantor under its Note Guarantee and this Indenture are in addition to and
not in substitution for any other obligations to the Trustee or to any of the
Holders in relation to this Indenture or the Notes and any guarantees or
security at any time held by or for the benefit of them.

 

SECTION 10.22.                                        Severability.

 

Any provision of this
Article Ten which is prohibited or unenforceable in any jurisdiction shall not
invalidate the remaining provisions and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction unless its removal would
substantially defeat the basic intent, spirit and purpose of this Indenture and
this Article Ten.

 

SECTION 10.23.                                        Successors and Assigns.

 

Each Note Guarantee shall be
binding upon and inure to the benefit of each Guarantor and the Trustee and the
other Holders and their respective successors and permitted assigns, except
that no Guarantor may assign any of its obligations hereunder or thereunder.

 

90

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

SECTION 11.01.                                        Trust Indenture Act Controls.

 

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

 

SECTION 11.02.                                        Notices.

 

Any notices or other
communications required or permitted hereunder shall be in writing, and shall
be sufficiently given if made by hand delivery, by telex, by nationally
recognized overnight courier service, by telecopier or registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:

 

if to the Issuer or a
Guarantor:

 

c/o Curative Health
Services, Inc. 

150 Motor Parkway

Hauppauge, New York  11788

Attention:  General Counsel

 

Telephone:            (631) 232-7000

Facsimile:               (631) 233-8106

 

if to the Trustee:

 

Wells Fargo Bank, N.A.

Corporate Trust Services

Sixth and Marquette

MAC N9303-120

Minneapolis, MN 55479

Attention:  Curative Health
Administrator

 

Facsimile:    (612) 667-9825

 

Each of the Issuer and the
Trustee by written notice to each other such Person may designate additional or
different addresses for notices to such Person.  Any notice or communication to the Issuer and the Trustee, shall
be deemed to have been given or made as of the date so delivered if personally
delivered; when replied to; when receipt is acknowledged, if telecopied; 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); and next Business
Day if by nationally recognized overnight courier service.

 

91

 

Any notice or communication
mailed to a Holder shall be mailed to him by first class mail or other equivalent
means at his address as it appears on the registration books of the Registrar
and shall be sufficiently given to him if so mailed within the time prescribed.

 

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

 

SECTION 11.03.                                        Communications by Holders with Other Holders.

 

Holders may communicate
pursuant to Trust Indenture Act § 312(b) with other Holders with respect to
their rights under this Indenture, the Notes or the Note Guarantees.  The Issuer, the Trustee, the Registrar and
any other Person shall have the protection of Trust Indenture Act § 312(c).

 

SECTION 11.04.                                        Certificate and Opinion as to Conditions
Precedent.

 

Upon any request or
application by the Issuer to the Trustee to take any action under this
Indenture, the Issuer shall furnish to the Trustee at the request of the Trustee:

 

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

 

(2)           an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been
complied with.

 

SECTION 11.05.                                        Statements Required in Certificate or Opinion.

 

Each certificate or opinion
with respect to compliance with a condition or covenant provided for in this
Indenture, other than the Officers’ Certificate required by Section 4.06, shall
include:

 

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

 

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

 

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

 

(4)           a statement as to whether or not, in
the opinion of each such Person, such condition or covenant has been complied
with; provided, however, that
with respect to

 

92

 

matters of fact, an Opinion
of Counsel may rely on an Officers’ Certificate or certificates of public
officials.

 

SECTION 11.06.                                        Rules by Paying Agent or Registrar.

 

The Paying Agent or
Registrar may make reasonable rules and set reasonable requirements for their
functions.

 

SECTION 11.07.                                        Legal Holidays.

 

If a payment date is not a
Business Day, payment may be made on the next succeeding day that is a Business
Day.

 

SECTION 11.08.                                        Governing Law.

 

This Indenture, the Notes and the Note Guarantees will 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 or debt agreement of any of the
Issuer or any of its Subsidiaries.  Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.

 

SECTION 11.10.                                        No Recourse Against Others.

 

No director, officer,
employee, incorporator, stockholder, member or manager of the Issuer or any
Guarantor shall have any liability for any obligations of the Issuer under the
Notes or this Indenture or of any Guarantor under its Note Guarantee or this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Holder of Notes by accepting a Note waives and releases all such
liability.  Such waiver and release are
part of the consideration for issuance of the Notes.

 

SECTION 11.11.                                        Successors.

 

All agreements of the Issuer
and the Guarantors in this Indenture, the Notes and the Note Guarantees shall
bind their respective successors.  All
agreements of the Trustee in this Indenture shall bind its successor.

 

SECTION 11.12.                                        Duplicate Originals.

 

All parties may sign any
number of copies of this Indenture. 
Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.

 

SECTION 11.13.                                        Severability.

 

To the extent permitted by
applicable law, in case any one or more of the provisions in this Indenture, in
the Notes or in the Note Guarantees shall be held invalid, illegal or un-

 

93

 

enforceable, in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.

 

94

 

SIGNATURES

 

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

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CURATIVE HEALTH SERVICES,
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas W. Axmacher

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EBIOCARE.COM

  	
   

  
	
   

  	
  APEX THERAPEUTIC CARE,
  INC.

  	
   

  
	
   

  	
  CHS SERVICES, INC.

  	
   

  
	
   

  	
  CURATIVE HEALTH SERVICES OF
  NEW YORK, INC.

  	
   

  
	
   

  	
  CRITICAL CARE SYSTEMS,
  INC.

  	
   

  
	
   

  	
  OPTIMAL CARE PLUS, INC.

  	
   

  
	
   

  	
  MEDCARE, INC.

  	
   

  
	
   

  	
  CURATIVE PHARMACY
  SERVICES, INC.

  	
   

  
	
   

  	
  CURATIVE HEALTH SERVICES
  CO.

  	
   

  
	
   

  	
  CURATIVE HEALTH SERVICES
  III CO.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas W. Axmacher

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HEMOPHILIA ACCESS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William Tella

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INFINITY INFUSION , LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  Curative Health Services, Co., its sole
  member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas W. Axmacher

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S-1

 

	
   

  	
  INFINITY INFUSION II, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  Curative Health Services, Co., its sole
  member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas W. Axmacher

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INFINITY INFUSION CARE,
  LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  Infinity Infusion II, LLC, its sole general
  partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  Curative Health Services, Co., the sole
  member of Infinity Infusion II, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas W. Axmacher

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S-2

 

	
   

  	
  Wells Fargo Bank, N.A.,

  	
   

  
	
   

  	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy Mowdy

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S-3

 

EXHIBIT A

 

[Insert the Global Note Legend, if applicable pursuant to the
provisions of the Indenture]

 

[Insert the Private Placement Legend, if applicable pursuant to the
provisions of the Indenture]

 

CURATIVE
HEALTH SERVICES, INC.

103⁄4%
Senior Notes 2011

 

	
   

  	
  CUSIP
  No.

  
	
  No.

  	
  $

  

 

CURATIVE HEALTH SERVICES,
INC., a Minnesota corporation (the “Issuer”),
for value received promise to pay to
[            ] or
its registered assigns, the principal sum of
                          [or
such other amount as is provided in a schedule attached hereto](a) on May 1,
2011.

 

Interest Payment Dates:  May 1 and November 1, commencing November 1,
2004.

 

Record Dates:  April 15 and October 15.

 

Reference is made to the
further provisions of this Note contained herein, which will for all purposes
have the same effect as if set forth at this place.

 

(a)           This language should
be included only if the Note is issued in global form.

 

A-1

 

IN WITNESS WHEREOF, the
Issuer has caused this Note to be signed manually or by facsimile by its duly
authorized officer.

 

Dated:

 

	
   

  	
  CURATIVE HEALTH SERVICES,
  INC., as Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas W. Axmacher

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

A-2

 

FORM OF TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is one of the 103⁄4%
Senior Notes due 2011 described in the within-mentioned Indenture.

 

Dated:

 

	
   

  	
  Wells Fargo Bank, N.A.,

  	
   

  
	
   

  	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy P. Mowdy

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  	
   

  
					

 

A-3

 

(Reverse
of Note)

 

103⁄4%
Senior Notes due 2011

 

Capitalized terms used
herein shall have the meanings assigned to them in the Indenture referred to
below unless otherwise indicated.

 

SECTION 1.  Interest.  Curative Health Services, Inc., a Minnesota corporation (the “Issuer”), promises to pay interest on the
principal amount of this Note at 103⁄4% per annum from April 23, 2004 until
maturity.  The Issuer will pay interest
semi-annually on May 1 and November 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an “Interest Payment Date”), commencing
November 1, 2004.  Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance.  The Issuer shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand to the extent lawful
at the interest rate applicable to the Notes; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful.  Interest will be computed on the basis of a
360-day year of twelve 30-day months.

 

SECTION 2.  Method of Payment.  The Issuer will pay interest on the Notes to
the Persons who are registered Holders of Notes at the close of business on the
May 1 or November 1 next preceding the Interest Payment Date, even if such
Notes are canceled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.13 of the Indenture with respect
to defaulted interest.  The Notes will
be issued in denominations of $1,000 and integral multiples thereof.  The Issuer shall pay principal, premium, if
any, and interest on the Notes in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts (“U.S. Legal Tender”).  Principal, premium, if any, and interest on
the Notes will be payable at the office or agency of the Issuer maintained for
such purpose except that, at the option of the Issuer, the payment of interest
may be made by check mailed to the Holders of the Notes at their respective
addresses set forth in the register of Holders of Notes; provided that for Holders that have given
wire transfer instructions to the Issuer at least ten Business Days prior to
the applicable payment date, the Issuer will make all payments of principal,
premium and interest by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. 
Until otherwise designated by the Issuer, the Issuer’s office or agency
in New York will be the office of the Trustee maintained for such purpose.

 

SECTION 3.  Paying Agent and Registrar.  Initially, Wells Fargo Bank, N.A., the
Trustee under the Indenture, will act as Paying Agent and Registrar.  The Issuer may change any Paying Agent or
Registrar without notice to any Holder. 
Except as provided in the Indenture, the Issuer or any of their Subsidiaries
may act in any such capacity.

 

SECTION 4.  Indenture.  The Issuer issued the Notes under an Indenture dated as of April
23, 2004 (“Indenture”) by and
among the Issuer, the Guarantors and the Trustee.  The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by

 

A-4

 

reference to the Trust Indenture Act of 1939,
as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “Trust Indenture Act”). 
The Holders are referred to the Indenture and the Trust Indenture Act
for a statement of such terms.

 

SECTION 5.  Optional Redemption.  Except as set forth in Section 6 hereof, the
Notes will not be redeemable at the Issuer’s option prior to May 1, 2008 (the “First Call Date”).  On or after the First Call Date, the Notes
will be subject to redemption at any time at the option of the Issuer, in whole
or in part, upon not less than 30 nor more than 60 days’ notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest thereon, if any, to the applicable
Redemption Date, if redeemed during the twelve-month period beginning on May 1
of the years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  105.375

  	
  %

  
	
  2009

  	
   

  	
  102.688

  	
  %

  
	
  2010

  	
   

  	
  100.000

  	
  %

  

 

SECTION 6.  Redemption with Proceeds from Equity
Offerings.  At any time prior to May
1, 2007, the Issuer may redeem at its option on any one or more occasions up to
35% of the aggregate principal amount of Notes issued under the Indenture with
the net cash proceeds of one or more Qualified Equity Offerings at a redemption
price equal to 110.75% of the principal amount of the Notes to be redeemed,
plus accrued and unpaid interest thereon, if any, to the Redemption Date; provided that (i) at least 65% of the
aggregate principal amount of Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption and (ii) such
redemption shall occur within 90 days of the date of the closing of any such
Qualified Equity Offering.

 

SECTION 7.  Notice of Redemption.  Notice of redemption will be mailed by first
class mail at least 30 days but not more than 60 days before the Redemption
Date to each Holder of Notes to be redeemed at its registered address.  Notes in denominations larger than $1,000
may be redeemed in part.  If any Note is
to be redeemed in part only, the notice of redemption that relates to such Note
shall state the portion of the principal amount thereof to be redeemed.  A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation of the original Note. 
On and after the Redemption Date interest ceases to accrue on Notes or
portions thereof called for redemption.

 

SECTION 8.  No Mandatory Redemption.  For
the avoidance of doubt, an offer to purchase pursuant to Section 9 hereof shall
not be deemed a redemption.  The Issuer
shall not be required to make mandatory redemption payments with respect to the
Notes.

 

SECTION 9.  Repurchase at Option of Holder.

 

(a)           Change of Control. 
Upon the occurrence of a Change of Control, and subject to certain
conditions set forth in the Indenture, the Issuer will be required to offer to
purchase all of the outstanding Notes at a purchase price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, thereon to
the date of repurchase.

 

A-5

 

The Issuer is, subject to
certain conditions and exceptions, obligated to make an offer to purchase Notes
at 100% of their principal amount, plus accrued and unpaid interest, if any,
thereon to the date of repurchase, with certain net cash proceeds of certain
sales or other dispositions of assets in accordance with the Indenture.

 

(b)           Excess Cash Flow. 
If (a) the Issuer has Excess Cash Flow for any fiscal year and (b) the
Consolidated Leverage Ratio as of the end of such fiscal year is 2.5 to 1.0 or
greater, then no later than the date that the Issuer is required to file its
Form-10-K under the Exchange Act for such fiscal year (assuming, for this
purpose, that the Issuer shall be at all times subject to Section 13(a) or
15(d) of the Exchange Act), the Issuer shall make an offer (the “Excess Cash Flow Offer”) to purchase Notes
with an amount equal to 50% of the Excess Cash Flow for such fiscal year, at a
purchase price in cash equal to 100% of the principal amount of the Notes, plus
accrued and unpaid interest thereon to the date fixed for the purchase of the
Notes pursuant to such Excess Cash Flow Offer, in accordance with the terms of
the Indenture.

 

SECTION 10.  Denominations, Transfer, Exchange.  The Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000.  The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Issuer may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.  The Issuer
and the Registrar are not required to transfer or exchange any Note selected
for redemption.  Also, the Issuer and
the Registrar are not required to transfer or exchange any Notes for a period
of 15 days before a selection of Notes to be redeemed.

 

SECTION 11.  Persons Deemed Owners.  The registered Holder of a Note may be
treated as its owner for all purposes.

 

SECTION 12.  Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture
and the Notes may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing Default or compliance 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 and the Notes to, among other things, cure
any ambiguity, defect or inconsistency in the Indenture, provide for
uncertificated Notes in addition to certificated Notes, comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the Trust Indenture Act, or make any change that does not materially
adversely affect the rights of any Holder of a Note.

 

SECTION 13.  Defaults and Remedies.  If a Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes generally may declare all the Notes to be due and payable
immediately.  Notwithstanding the
foregoing, in the case of a Default arising from certain events of bankruptcy
or insolvency as set forth in the Indenture, with respect to the Issuer, all
outstanding Notes will become due and payable without further action or
notice.  Holders of the Notes may not
enforce the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a
majority in prin-

 

A-6

 

cipal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or
power.  The Trustee may withhold from
Holders of the Notes notice of any continuing Default (except a Default relating
to the payment of principal or interest including an accelerated payment or the
failure to make a payment on the Change of Control Payment Date or the Net
Proceeds Payment Date pursuant to a Net Proceeds Offer or a Default in
complying with the provisions of Article Five of the Indenture) if it
determines that withholding notice is in their interest.  The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default and its
consequences under the Indenture except a continuing Default in the payment of
interest on, or the principal of, or the premium on, the Notes.

 

SECTION 14.  Restrictive Covenants.  The Indenture contains certain covenants
that, among other things, limit the ability of the Issuer and its Restricted
Subsidiaries to make restricted payments, to incur indebtedness, to create
liens, to sell assets, to permit restrictions on dividends and other payments
by Restricted Subsidiaries of the Issuer, to consolidate, merge or sell all or
substantially all of its assets or to engage in transactions with
affiliates.  The limitations are subject
to a number of important qualifications and exceptions.  The Issuer must annually report to the
Trustee on compliance with such limitations and other provisions in the
Indenture.

 

SECTION 15.  No Recourse Against Others.  No director, officer, employee,
incorporator, stockholder, member or manager of the Issuer or any Guarantor
shall have any liability for any obligations of the Issuer under the Notes or
the Indenture, or of any Guarantor under its Note Guarantee or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation.  Each Holder of Notes by
accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes.

 

SECTION 16.  Note Guarantees.  This Note will be entitled to the benefits
of certain Note Guarantees made for the benefit of the Holders.  Reference is hereby made to the Indenture
for a statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantors, the Trustee and the Holders.

 

SECTION 17.  Trustee Dealings with the Issuer.  Subject to certain terms, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Issuer, their Subsidiaries or
their respective Affiliates as if it were not the Trustee.

 

SECTION 18.  Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

 

SECTION 19.  Abbreviations.  Customary abbreviations may be used in the
name of a Holder or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), 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).

 

SECTION 20.  Additional Rights of Holders of
Restricted Global Notes and Restricted Definitive Notes.  Pursuant to, but subject to the exceptions
in, the Registration Rights Agreement, the Issuer and the Guarantors will be
obligated to use their commercially reasonable

 

A-7

 

efforts to consummate an exchange offer
pursuant to which the Holder of this Note shall have the right to exchange this
Note for a 103⁄4% Senior Note due 2011 of the Issuer which shall have been
registered under the Securities Act, in like principal amount and having terms
identical in all material respects to this Note (except that such note shall
not be entitled to Additional Interest and shall not contain terms with respect
to transfer restrictions).  The Holders
shall be entitled to receive certain Additional Interest in the event such
exchange offer is not consummated or the Notes are not offered for resale and
upon certain other conditions, all pursuant to and in accordance with the terms
of the Registration Rights Agreement.(a)

 

SECTION 21.  CUSIP and ISIN Numbers.  Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Issuer has
caused CUSIP and ISIN numbers to be printed on the Notes and the Trustee may
use CUSIP or ISIN numbers in notices of redemption as a convenience to
Holders.  No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.

 

SECTION 22.  Governing Law.  This Note
shall be governed by, and construed in accordance with, the laws of the State
of New York.

 

The Issuer will furnish to
any Holder upon written request and without charge a copy of the Indenture.

 

(a)           This Section not to appear on Exchange Notes or Private
Exchange Notes or Additional Notes unless required by the terms of such
Additional Notes.

 

A-8

 

ASSIGNMENT
FORM

 

I or we assign and transfer this Note to

 

(Print or type name, address and zip code of
assignee or transferee)

 

(Insert Social Security or other identifying
number of assignee or transferee)

 

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

 

	
  Dated:

  	
   

  	
   

  	
  Signed: 

  	
   

  
	
   

  	
   

  	
  (Sign exactly as name
  appears on

  the other side of this Note)

  
						

 

	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
  Participant in a
  recognized Signature Guarantee

  Medallion Program (or other signature guarantor program

  reasonably acceptable to the Trustee)

  

 

In connection with any
transfer of this Note occurring prior to the date which is the date following
the second anniversary of the original issuance of this Note, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and is making the transfer pursuant
to one of the following:

 

[Check
One]

 

(1)
o                               to the Issuer or a subsidiary thereof; or

 

(2)
o                               to a person who the transferor reasonably
believes is a “qualified institutional buyer” pursuant to and in compliance
with Rule 144A under the Securities Act of 1933, as amended (the “Securities
Act”); or

 

(3)
o                               to an institutional “accredited investor” (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain representations and
agreements (the form of which letter can be obtained from the Trustee); or

 

(4)
o                               outside the United States to a non-”U.S.
person” as defined in Rule 902 of Regulation S under the Securities Act in
compliance with Rule 904 of Regulation S under the Securities Act; or

 

 

(5) o                               pursuant to the exemption from registration
provided by Rule 144 under the Securities Act or pursuant to another exemption
available under the Securities Act; or

 

(6) o                               pursuant to an effective registration
statement under the Securities Act.

 

and unless the box below is checked, the
undersigned confirms that such Note is not being transferred to an “affiliate”
of the Issuer as defined in Rule 144 under the Securities Act (an “Affiliate”):

 

The transferee is an Affiliate of the Issuer.

 

Unless one of the foregoing
items (1) through (6) is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than
the registered Holder thereof; provided,
however, that if item (3), (4) or
(5) is checked, the Issuer or the Trustee may require, prior to registering any
such transfer of the Notes, in their sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or the Issuer has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act.

 

If none of the foregoing
items (1) through (6) are checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.16 of the Indenture shall have been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
  Signed: 

  	
   

  
	
   

  	
   

  	
  (Sign exactly as name
  appears on the other

  side of this Note)

  

 

	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
	
   

  	
  Participant in a
  recognized Signature Guarantee Medallion

  Program (or other signature guarantor program

  reasonably acceptable to the Trustee)

  

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS
CHECKED

 

The undersigned represents
and warrants that it is purchasing this Note for its own account or an account
with respect to which it exercises sole investment discretion and that it and
any such account is a “qualified institutional buyer” within the meaning of
Rule 144A under the Securities Act and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Issuer as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE:

  	
  To be executed by an
  executive

  officer

  
						

 

2

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have
this Note purchased by the Issuer pursuant to Section 4.09, 4.10 or Section
4.17 of the Indenture, check the appropriate box:

 

	
  Section 4.09 o

  	
   

  	
  Section
  4.10

  	
   

  	
  Section
  4.17 o

  

 

If you want to elect to have
only part of this Note purchased by the Issuer pursuant to Section 4.09, 4.10
or Section 4.17 of the Indenture, state the amount (in denominations of $1,000
and integral multiples thereof): 
$                  

 

	
  Dated:

  	
   

  	
   

  	
  Signed: 

  	
   

  
	
   

  	
   

  	
  (Sign exactly as name

  appears on the other

  side of this Note)

  
						

 

	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
	
   

  	
  Participant in a
  recognized Signature Guarantee

  Medallion Program (or other signature guarantor

  program reasonably acceptable to the Trustee)

  

 

3

 

SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(a)

 

The following exchanges of a
part of this Global Note for an interest in another Global Note or for a
Physical Note, or exchanges of a part of another Global Note or Physical Note
for an interest in this Global Note, have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of
  decrease in

  Principal Amount of

  this Global Note

  	
   

  	
  Amount of
  increase in

  Principal Amount of

  this Global Note

  	
   

  	
  Principal
  Amount of

  this Global Note

  following such decrease

  (or increase)

  	
   

  	
  Signature
  of

  authorized officer of

  Trustee or Note

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(a)           This schedule should be included only if the Note is
issued in global form.

 

4

 

EXHIBIT B

 

FORM
OF LEGENDS

 

Each Global Note and
Physical Note that constitutes a Restricted Security shall bear the following
legend (the “Private Placement Legend”) on the face thereof until after the
second anniversary of the Issue Date, unless otherwise agreed by the Issuer and
the Holder thereof or if such legend is no longer required by Section 2.16(g)
of the Indenture:

 

THE
SECURITY (OR ITS PREDECESSOR) EVIDENCED BY THIS CERTIFICATE WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S.
SECURITIES ACT OF 1933, AND THE SECURITY EVIDENCED BY THIS CERTIFICATE MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION
OR AN APPLICABLE EXEMPTION FROM THE SECURITIES ACT.  EACH PURCHASER OF THE SECURITY EVIDENCED BY THIS CERTIFICATE (1)
BY ITS ACQUISITION OF THE SECURITY REPRESENTS THAT (A) IT IS A “QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED BY THIS
CERTIFICATE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT, AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT.  THE HOLDER OF THE SECURITY EVIDENCED BY THIS
CERTIFICATE AGREES FOR THE BENEFIT OF THE ISSUER AND THE GUARANTORS THAT (X) THIS
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, OR ANOTHER AVAILABLE EXEMPTION
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A PERSON THAT IS NOT
A U.S. PERSON (AS DEFINED IN RULE 902 UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT,
(D) TO AN ACCREDITED INVESTOR (WITHIN THE MEANING OF RULE 501(a)(1), (2), (3),
OR (7) UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) THAT
IS PURCHASING AT LEAST $250,000 OF NOTES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF AN INSTITUTIONAL ACCREDITED INVESTOR (AND BASED UPON AN OPINION OF COUNSEL
IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR ANY OF ITS SUBSIDIARIES OR (3)
UNDER AN EFFECTIVE REGISTRATION

 

B-1

 

STATEMENT AND, IN EACH CASE,
IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (Y) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED BY THIS CERTIFICATE OF THE RESALE RESTRICTIONS DESCRIBED IN (X)
ABOVE.  IN CONNECTION WITH ANY TRANSFER
OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY
OR IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.

 

Each Global Note
authenticated and delivered hereunder 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”), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.

 

TRANSFERS
OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF CEDE & CO. OR TO A

 

B-2

 

SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.

 

Each
Temporary Regulation S Global Note shall also bear the following legend:

 

THIS GLOBAL NOTE IS A
TEMPORARY GLOBAL NOTE FOR PURPOSES OF REGULATION S UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).  NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY
INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER
THE INDENTURE REFERRED TO BELOW.

 

NO BENEFICIAL OWNERS OF THIS
TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR
INTEREST HEREON UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT
TO THE TERMS OF THE INDENTURE.

 

B-3

 

EXHIBIT C

 

Form
of Certificate To Be

Delivered in Connection with

Transfers to Non-QIB Institutional Accredited Investors

 

[              ],
[    ]

 

Wells Fargo Bank, N.A.

Corporate Trust Services

Sixth and Marquette

MAC N9303-120

Minneapolis, MN 55479

T: (612) 316-1445

F: (612) 667-9825

Attention:  Curative Health
Administrator

 

Ladies and Gentlemen:

 

In connection with our
proposed purchase of 103⁄4% Senior Notes due 2011 (the “Notes”) of CURATIVE HEALTH SERVICES, INC.,
a Minnesota corporation (the “Issuer”),
we confirm that:

 

1.             We understand that any subsequent
transfer of the Notes is subject to certain restrictions and conditions set
forth in the Indenture relating to the Notes (the “Indenture”) and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Notes except in compliance with,
such restrictions and conditions and the Securities Act of 1933, as amended
(the “Securities Act”), and all applicable
state securities laws.

 

2.             We understand that the offer and
sale of the Notes have not been registered under the Securities Act, and that
the Notes may not be offered, sold, pledged or otherwise transferred except as
permitted in the following sentence.  We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell, offer, pledge or otherwise
transfer any Notes, we will do so only (i) to the Issuer or any of its
subsidiaries, (ii) inside the United States in a transaction meeting the
requirements of Rule 144A under the Securities Act to a person who we
reasonably believe to be a “qualified institutional buyer” (as defined in Rule
144A under the Securities Act), (iii) inside the United States to an
institutional “accredited investor” (as defined below) that is purchasing at
least $250,000 of Notes for its own account or for the account of an
institutional accredited investor and who, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to the Trustee (as
defined in the Indenture) a signed letter containing certain representations
and agreements relating to the restrictions on transfer of the Notes (the form
of which letter can be obtained from the Trustee), (iv) outside the United
States to a person that is not a U.S. person (as defined in

 

C-1

 

Rule 902 under the Securities Act) in accordance with Regulation S
promulgated under the Securities Act, (v) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available) or
another available exemption under the Securities Act or (vi) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing any of the Notes from us a notice advising
such purchaser that resales of the Notes are restricted as stated herein.

 

3.             We are not acquiring the Notes for
or on behalf of, and will not transfer the Notes to, any pension or welfare
plan (as defined in Section 3 of the Employee Retirement Income Security Act of
1974, as amended) or plan (as defined in Section 4975 of the Internal Revenue
Code of 1986, as amended), except as permitted in the section entitled “Notice
to Investors” of the Offering Memorandum.

 

4.             We understand that, on any proposed
resale of any Notes, we will be required to furnish to the Trustee and the
Issuer such certification, legal opinions and other information as the Trustee
and the Issuer may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. 
We further understand that the Notes purchased by us will bear a legend
to the foregoing effect.

 

5.             We are an institutional “accredited
investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting are
each able to bear the economic risk of our or their investment, as the case may
be.

 

6.             We are acquiring the Notes
purchased by us for our account or for one or more accounts (each of which is
an institutional “accredited investor”) as to each of which we exercise sole
investment discretion.

 

C-2

 

You, as Trustee, the Issuer,
counsel for the Issuer and others 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 proceeding or official inquiry
with respect to the matters covered hereby.

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

C-3

 

EXHIBIT D

 

Form
of Certificate To Be Delivered

in
Connection with Transfers

Pursuant
to Regulation S

 

[               ],
[    ]

 

Wells Fargo Bank, N.A.

Corporate Trust Services

Sixth and Marquette

MAC N9303-120

Minneapolis, MN 55479

T: (612) 316-1445

F: (612) 667-9825

Attention:  Curative Health
Administrator

 

Re:                               Curative Health Services, Inc. (the “Issuer”)

103⁄4% Senior Notes due 2011 (the “Notes”)

 

Ladies and Gentlemen:

 

In connection with our
proposed sale of $[        ] aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act
of 1933, as amended (the “Securities Act”),
and, accordingly, we represent that:

 

(1)           the offer of the Notes was not made
to a person in the United States;

 

(2)           either (a) at the time the buy 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 offshore 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(b)
or Rule 904(b) 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.

 

D-1

 

You, as Trustee, the Issuer,
counsel for the Issuer and others are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. 
Terms used in this certificate have the meanings set forth in Regulation
S.

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of Transferor]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
					

 

D-2

 

EXHIBIT E

 

NOTE
GUARANTEE

 

For value received, each of
the undersigned (including any successor Person under the Indenture) hereby
unconditionally guarantees, jointly and severally, to the extent set forth in
the Indenture (as defined below) to the Holder of this Note the payment of
principal, premium, if any, and interest on this Note in the amounts and at the
times when due and interest on the overdue principal, premium, if any, and
interest, if any, of this Note when due, if lawful, and, to the extent
permitted by law, the payment or performance of all other obligations of the
Issuer under the Indenture or the Notes, to the Holder of this Note and the
Trustee, all in accordance with and subject to the terms and limitations of
this Note, the Indenture, including Article Ten thereof, and this Note
Guarantee.  This Note Guarantee will
become effective in accordance with Article Ten of the Indenture and its terms
shall be evidenced therein.  The
validity and enforceability of any Note Guarantee shall not be affected by the
fact that it is not affixed to any particular Note.

 

Capitalized terms used but
not defined herein shall have the meanings ascribed to them in the Indenture
dated as of April 23, 2004, among Curative Health Services, Inc., a Minnesota
corporation (the “Issuer”), the
Guarantors named therein and Wells Fargo Bank, N.A., as trustee (the “Trustee”), as amended or supplemented (the
“Indenture”).

 

The obligations of the
undersigned to the Holders of Notes and to the Trustee pursuant to this Note
Guarantee and the Indenture are expressly set forth in Article Ten of the
Indenture and reference is hereby made to the Indenture for the precise terms
of the Note Guarantee and all of the other provisions of the Indenture to which
this Note Guarantee relates.

 

No director, officer,
employee, incorporator, stockholder, member or manager of any Guarantor, as
such, shall have any liability for any obligations of such Guarantors under
such Guarantors’ Note Guarantee or the Indenture or for any claim based on, in
respect of, or by reason of, such obligation or its creation.

 

This Note Guarantee shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

This Note Guarantee is
subject to release upon the terms set forth in the Indenture.

 

E-1

 

IN WITNESS WHEREOF, each
Guarantor has caused its Note Guarantee to be duly executed.

 

Date:

 

	
   

  	
  [                     ]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

E-2

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