Document:

Exhibit 4.46

 

RITE AID CORPORATION

 

% Senior Secured Notes due 2016

 

 

INDENTURE

 

Dated as of July   , 2008

 

 

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

 

as Trustee

 

 

TABLE OF CONTENTS

 

ARTICLE I

 

Definitions and Incorporation by Reference

 

	
  SECTION 1.01. Definitions

  	
   

  	
  1

  
	
  SECTION 1.02. Other Definitions

  	
   

  	
  36

  
	
  SECTION 1.03. Incorporation by Reference of Trust Indenture Act

  	
   

  	
  36

  
	
  SECTION 1.04. Rules of Construction

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  	
   

  
	
  The Securities

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01. Amount of Securities; Issuable in Series

  	
   

  	
  37

  
	
  SECTION 2.02. Form and Dating

  	
   

  	
  38

  
	
  SECTION 2.03. Execution and Authentication

  	
   

  	
  39

  
	
  SECTION 2.04. Registrar and Paying Agent

  	
   

  	
  39

  
	
  SECTION 2.05. Paying Agent To Hold Money in Trust

  	
   

  	
  40

  
	
  SECTION 2.06. Holder Lists

  	
   

  	
  40

  
	
  SECTION 2.07. Replacement Securities

  	
   

  	
  40

  
	
  SECTION 2.08. Outstanding Securities

  	
   

  	
  40

  
	
  SECTION 2.09. Temporary Securities

  	
   

  	
  41

  
	
  SECTION 2.10. Cancellation

  	
   

  	
  41

  
	
  SECTION 2.11. Defaulted Interest

  	
   

  	
  41

  
	
  SECTION 2.12. CUSIP Numbers

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  	
   

  
	
  Redemption

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01. Notices to Trustee

  	
   

  	
  42

  
	
  SECTION 3.02. Selection of Securities To Be Redeemed

  	
   

  	
  42

  
	
  SECTION 3.03. Notice of Redemption

  	
   

  	
  42

  
	
  SECTION 3.04. Effect of Notice of Redemption

  	
   

  	
  43

  
	
  SECTION 3.05. Deposit of Redemption Price

  	
   

  	
  43

  
	
  SECTION 3.06. Securities Redeemed in Part

  	
   

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  	
   

  	
   

  
	
  Covenants

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01. Payment of Securities

  	
   

  	
  43

  
	
  SECTION 4.02. SEC Reports

  	
   

  	
  44

  
	
  SECTION 4.03. Limitation on Debt

  	
   

  	
  44

  
	
  SECTION 4.04. Limitation on Restricted Payments

  	
   

  	
  48

  

 

i

 

	
  SECTION 4.05. Limitation on Liens

  	
   

  	
  51

  
	
  SECTION 4.06. Limitation on Asset Sales and Specified Collateral
  Dispositions

  	
   

  	
  51

  
	
  SECTION 4.07. Limitation on Restrictions on Distributions from
  Restricted Subsidiaries

  	
   

  	
  55

  
	
  SECTION 4.08. Limitation on Transactions with Affiliates

  	
   

  	
  56

  
	
  SECTION 4.09. Guarantees by Subsidiaries

  	
   

  	
  58

  
	
  SECTION 4.10. Limitation on Sale and Leaseback Transactions

  	
   

  	
  59

  
	
  SECTION 4.11. Designation of Restricted and Unrestricted
  Subsidiaries

  	
   

  	
  60

  
	
  SECTION 4.12. Additional Security Documents

  	
   

  	
  61

  
	
  SECTION 4.13. Change of Control

  	
   

  	
  61

  
	
  SECTION 4.14. Further Instruments and Acts

  	
   

  	
  63

  
	
  SECTION 4.15. Covenant Suspension

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  	
   

  	
   

  
	
  Successor Company

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01. When Company May Merge or Transfer Assets

  	
   

  	
  64

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  	
   

  
	
  Defaults and Remedies

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01. Events of Default

  	
   

  	
  66

  
	
  SECTION 6.02. Acceleration

  	
   

  	
  68

  
	
  SECTION 6.03. Other Remedies

  	
   

  	
  69

  
	
  SECTION 6.04. Waiver of Past Defaults

  	
   

  	
  69

  
	
  SECTION 6.05. Control by Majority

  	
   

  	
  69

  
	
  SECTION 6.06. Limitation on Suits

  	
   

  	
  70

  
	
  SECTION 6.07. Rights of Holders to Receive Payment

  	
   

  	
  70

  
	
  SECTION 6.08. Collection Suit by Trustee

  	
   

  	
  70

  
	
  SECTION 6.09. Trustee May File Proofs of Claim

  	
   

  	
  70

  
	
  SECTION 6.10. Priorities

  	
   

  	
  71

  
	
  SECTION 6.11. Undertaking for Costs

  	
   

  	
  71

  
	
  SECTION 6.12. Waiver of Stay or Extension Laws

  	
   

  	
  71

  
	
  SECTION 6.13. Enforcement of Remedies

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  	
   

  	
   

  
	
  Trustee

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01. Duties of Trustee

  	
   

  	
  72

  
	
  SECTION 7.02. Rights of Trustee

  	
   

  	
  73

  
	
  SECTION 7.03. Individual Rights of Trustee

  	
   

  	
  74

  
	
  SECTION 7.04. Trustee’s Disclaimer

  	
   

  	
  74

  
	
  SECTION 7.05. Notice of Defaults

  	
   

  	
  74

  
	
  SECTION 7.06. Reports by Trustee to Holders

  	
   

  	
  74

  

 

ii

 

	
  SECTION 7.07. Compensation and Indemnity

  	
   

  	
  75

  
	
  SECTION 7.08. Replacement of Trustee

  	
   

  	
  75

  
	
  SECTION 7.09. Successor Trustee by Merger

  	
   

  	
  76

  
	
  SECTION 7.10. Eligibility; Disqualification

  	
   

  	
  77

  
	
  SECTION 7.11. Preferential Collection of Claims Against Company

  	
   

  	
  77

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  	
   

  	
   

  
	
  Discharge of Indenture; Defeasance

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01. Discharge of Liability on Securities; Defeasance

  	
   

  	
  77

  
	
  SECTION 8.02. Conditions to Defeasance

  	
   

  	
  78

  
	
  SECTION 8.03. Application of Trust Money

  	
   

  	
  79

  
	
  SECTION 8.04. Repayment to Company

  	
   

  	
  79

  
	
  SECTION 8.05. Indemnity for Government Obligations

  	
   

  	
  80

  
	
  SECTION 8.06. Reinstatement

  	
   

  	
  80

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  	
   

  	
   

  
	
  Amendments

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01. Without Consent of Holders

  	
   

  	
  80

  
	
  SECTION 9.02. With Consent of Holders

  	
   

  	
  81

  
	
  SECTION 9.03. Compliance with Trust Indenture Act

  	
   

  	
  86

  
	
  SECTION 9.04. Revocation and Effect of Consents and Waivers

  	
   

  	
  86

  
	
  SECTION 9.05. Notation on or Exchange of Securities

  	
   

  	
  86

  
	
  SECTION 9.06. Trustee To Sign Amendments

  	
   

  	
  86

  
	
  SECTION 9.07. Payment for Consent

  	
   

  	
  86

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01. Trust Indenture Act Controls

  	
   

  	
  87

  
	
  SECTION 10.02. Notices

  	
   

  	
  87

  
	
  SECTION 10.03. Communication by Holders with Other Holders

  	
   

  	
  88

  
	
  SECTION 10.04. Certificate and Opinion as to Conditions
  Precedent

  	
   

  	
  88

  
	
  SECTION 10.05. Statements Required in Certificate or Opinion

  	
   

  	
  88

  
	
  SECTION 10.06. When Securities Disregarded

  	
   

  	
  88

  
	
  SECTION 10.07. Rules by Trustee, Paying Agent and Registrar

  	
   

  	
  89

  
	
  SECTION 10.08. Legal Holidays

  	
   

  	
  89

  
	
  SECTION 10.09. Governing Law

  	
   

  	
  89

  
	
  SECTION 10.10. No Recourse Against Others

  	
   

  	
  89

  
	
  SECTION 10.11. Successors

  	
   

  	
  89

  
	
  SECTION 10.12. Multiple Originals

  	
   

  	
  89

  
	
  SECTION 10.13. Table of Contents; Headings

  	
   

  	
  89

  
	
  SECTION 10.14. Waiver of Jury Trial

  	
   

  	
  89

  

 

iii

 

	
  SECTION 10.15. Force Majeure

  	
   

  	
  90

  

 

Exhibit 1 - Form of Security

 

iv

 

CROSS-REFERENCE TABLE

 

	
  TIA

  	
   

  	
   

  	
   

  	
  Indenture

  
	
  Section

  	
   

  	
   

  	
   

  	
  Section

  
	
  310

  	
   

  	
  (a)(1)

  	
   

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  7.08;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  N.A.

  
	
  311

  	
   

  	
  (a)

  	
   

  	
   

  	
  7.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  7.11

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  N.A.

  
	
  312

  	
   

  	
  (a)

  	
   

  	
   

  	
  2.06

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  10.03

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  10.03

  
	
  313

  	
   

  	
  (a)

  	
   

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (b)(1)

  	
   

  	
   

  	
  7.06;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (b)(2)

  	
   

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  7.06;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (d)

  	
   

  	
   

  	
  7.06

  
	
  314

  	
   

  	
  (a)

  	
   

  	
   

  	
  4.02;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  4.09;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7.06;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  4.09;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7.02;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
   

  	
  7.02

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
   

  	
  7.02

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (d)

  	
   

  	
   

  	
  1.03;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7.02

  
	
   

  	
   

  	
  (e)

  	
   

  	
   

  	
  10.05

  
	
   

  	
   

  	
  (f)

  	
   

  	
   

  	
  4.14

  
	
  315

  	
   

  	
  (a)

  	
   

  	
   

  	
  7.01

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  7.05;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.02

  
	
   

  	
   

  	
  (c)

  	
   

  	
   

  	
  7.01

  
	
   

  	
   

  	
  (d)

  	
   

  	
   

  	
  7.01

  
	
   

  	
   

  	
  (e)

  	
   

  	
   

  	
  6.11

  
	
  316

  	
   

  	
  (a)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (last sentence)

  	
   

  	
   

  	
  10.06

  
	
   

  	
   

  	
  (a)(1)(A)

  	
   

  	
   

  	
  6.05

  

 

v

 

	
  TIA

  	
   

  	
   

  	
   

  	
  Indenture

  
	
  Section

  	
   

  	
   

  	
   

  	
  Section

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
   

  	
  6.04

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  6.07

  
	
  317

  	
   

  	
  (a)(1)

  	
   

  	
   

  	
  6.08

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
   

  	
  6.09

  
	
   

  	
   

  	
  (b)

  	
   

  	
   

  	
  2.05

  
	
  318

  	
   

  	
  (a)

  	
   

  	
   

  	
  10.01

  

 

N.A. Means Not Applicable.

 

Note:  This Cross-Reference Table shall not, for any
purposes, be deemed to be part of this Indenture.

 

vi

 

INDENTURE dated as of      , 2008, among RITE AID CORPORATION, a
Delaware corporation (the “Company”), each of the SUBSIDIARY GUARANTORS named
in Schedule A hereto and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national
banking association, as Trustee (the “Trustee”).

 

Each party agrees as follows
for the benefit of the other party and for the equal and ratable benefit of the
Holders of the Company’s     % Senior Secured Notes due
2016, to be issued, from time to time, in one or more series as provided in
this Indenture (the “Securities”):

 

ARTICLE I

 

Definitions and Incorporation
by Reference

 

SECTION 1.01.  Definitions.

 

“Additional Assets”
means:

 

(a) any Property (other than cash, cash equivalents and
securities) to be owned by the Company or any Restricted Subsidiary and used in
a Related Business; or

 

(b) Capital Stock of a Person that becomes a Restricted Subsidiary
as a result of the acquisition of such Capital Stock by the Company or another
Restricted Subsidiary from any Person other than the Company or an Affiliate of
the Company; provided, however, that, in the case of this clause
(b), such Restricted Subsidiary is primarily engaged in a Related Business.

 

“Additional Senior Debt”
means any other Debt of the Company Guaranteed by the Subsidiary Guarantors
pursuant to the Senior Subsidiary Guarantee Agreement with such Guarantees
secured by the Senior Collateral on a pari passu basis with the Senior
Bank Obligations; provided, however, that such Debt is permitted
to be incurred, secured and guaranteed on such basis by this Indenture and the
Second Priority Collateral Documents.

 

“Additional Senior Debt
Documents” means, with respect to any series, issue or class of Additional
Senior Debt, the promissory notes, indentures, Collateral Documents or other
operative agreements evidencing or governing such Debt, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

 

 

“Additional Senior Debt
Facility” means the indenture or other governing agreement with respect to
any Additional Senior Debt, as the same may be amended, restated, supplemented
or otherwise modified from time to time.

 

“Additional Senior Debt
Obligations” means, with respect to any series, issue or class of
Additional Senior Debt, (a) all principal of and interest (including,
without limitation, any interest which accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company, whether or not allowed or allowable as a claim
in any such proceeding) payable with respect to such Additional Senior Debt, (b) all
other amounts payable by the Company to the related Additional Senior Debt
Parties under the related Additional Senior Debt Documents and (c) any
renewals, extensions or Refinancings of the foregoing.

 

“Additional Senior Debt
Parties” means, with respect to any series, issue or class of Additional
Senior Debt, the holders of such indebtedness from time to time, any trustee or
agent therefore under any related Additional Senior Debt Documents and the
beneficiaries of each indemnification obligation undertaken by the Company or
any Obligor under any related Additional Senior Debt Documents, but shall not
include the Obligors or any controlled Affiliates thereof.

 

“Affiliate” of any
specified Person means:

 

(a) any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person; or

 

(b) any other Person who is a director or executive officer of:

 

(1) such specified Person;

 

(2) any Subsidiary of such specified Person; or

 

(3) any Person described in clause (a) above.

 

For the purposes of this
definition, “control” when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

 

For purposes of this
definition, The Jean Coutu Group (PJC), Inc. and its Affiliates shall be “Affiliates”
of the Company so long as The Jean Coutu Group (PJC), Inc. beneficially
owns more than 10% of the Voting Stock of the Company.

 

“Asset Sale” means any
sale, lease, transfer, issuance or other disposition (or series of related
sales, leases, transfers, issuances or dispositions) by the Company or any
Restricted Subsidiary, including any disposition by means of a merger,
consolidation 

 

2

 

or similar
transaction (each referred to for the purposes of this definition as a “disposition”),
of:

 

(a) any shares of Capital Stock of a Restricted Subsidiary (other
than directors’ qualifying shares); or

 

(b) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such Restricted
Subsidiary,

 

in the case of either clause (a) or
clause (b) above, whether in a single transaction or a series of related
transactions, (i) that have a Fair Market Value in excess of $15.0 million
or (ii) for aggregate consideration in excess of $15.0 million, other
than, in the case of clause (a) or (b) above:

 

(1) any disposition by a Restricted Subsidiary to the Company or
by the Company or a Restricted Subsidiary to a Wholly Owned Restricted
Subsidiary;

 

(2) any disposition that constitutes a Permitted Investment or
Restricted Payment permitted by Section 4.04;

 

(3) any disposition effected in compliance with Section 5.01(a);

 

(4) a sale of accounts receivable and related assets of the type
specified in the definition of “Qualified Receivables Transaction” to a
Receivables Entity;

 

(5) a transfer of accounts receivable and related assets of the
type specified in the definition of “Qualified Receivables Transaction” (or a
fractional undivided interest therein) by a Receivables Entity in connection
with a Qualified Receivables Transaction; or

 

(6) a sale by the Company or a Restricted Subsidiary of Property
by way of a Sale and Leaseback Transaction but only if (A) such Property
was owned by the Company or a Restricted Subsidiary on or after the Issue Date,
(B) the requirements of clause (a) of Section 4.10 are satisfied
with respect to such Sale and Leaseback Transaction, (C) the requirements
of clauses (a), (b) and (c) of the first paragraph of Section 4.06
are satisfied as though such Sale and Leaseback Transaction constituted an
Asset Sale and (D) the aggregate Fair Market Value of such Property, when
added to the Fair Market Value of all other sales of Property pursuant to this
clause (6) since the Issue Date, does not exceed $150 million.

 

“Attributable Debt” in
respect of a Sale and Leaseback Transaction means, at any date of
determination:

 

3

 

(a) if such Sale and Leaseback Transaction is a Capital Lease
Obligation, the amount of Debt represented thereby according to the definition
of “Capital Lease Obligation,” and

 

(b) in all other instances, the greater of:

 

(1) the Fair Market Value of the Property subject to such Sale and
Leaseback Transaction; and

 

(2) the present value (discounted at the interest rate borne by
the Securities, compounded annually) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in such Sale
and Leaseback Transaction (in each case including any period for which such
lease has been extended).

 

“Average
Life” means, as of any date of determination, with respect to any Debt or
Preferred Stock, the quotient obtained by dividing:

 

(a) the sum of the product of the numbers of years (rounded to the
nearest one-twelfth of one year) from the date of determination to the dates of
each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount
of such payment by

 

(b) the sum of all such payments.

 

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

 

“Board of Directors”
means the board of directors of the Company or any duly authorized and constituted
committee thereof.

 

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

 

“Business Day” means any
day other than a Saturday, a Sunday or a day on which banking institutions in
The City of New York, New York are authorized or obligated by law, regulation,
executive order or governmental decree to close.

 

“Capital Lease Obligations”
means any obligation under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP; and the amount of Debt
represented by such obligation shall be the capitalized amount of such
obligations determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be terminated by
the lessee without 

 

4

 

payment of a
penalty. For purposes of Section 4.05, a Capital Lease Obligation shall be
deemed secured by a Lien on the Property being leased.

 

“Capital Stock” means,
with respect to any Person, any shares or other equivalents (however
designated) of any class of corporate stock or partnership interests or any
other participations, rights, warrants, options or other interests in the
nature of an equity interest in such Person, including Preferred Stock, but
excluding any debt security convertible or exchangeable into such equity
interest.

 

“Capital Stock Sale Proceeds”
means the aggregate cash proceeds received by the Company from the issuance or
sale (other than to a Subsidiary of the Company or an employee stock ownership
plan or trust established by the Company or any such Subsidiary for the benefit
of their employees) by the Company of its Capital Stock (other than
Disqualified Stock) after February 12, 2003, net of attorneys’ fees,
accountants’ fees, underwriters’ or placement agents’ fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.

 

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

 

(a) if any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act or any successor provisions to
either of the foregoing), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act (other than one or more Permitted Holders), becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 40% or more of the total voting power of the Voting Stock of the
Company (for purposes of this clause (a), such person or group shall be deemed
to beneficially own any Voting Stock of a corporation held by any other
corporation (the “parent corporation”) so long as such person or group
beneficially owns, directly or indirectly, in the aggregate a majority of the
total voting power of the Voting Stock of such parent corporation); or

 

(b) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets of
the Company and the Restricted Subsidiaries, considered as a whole (other than
a disposition of such assets as an entirety or virtually as an entirety to a
Wholly Owned Restricted Subsidiary) shall have occurred, or the Company merges,
consolidates or amalgamates with or into any other Person or any other Person
merges, consolidates or amalgamates with or into the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the Company
is reclassified into or exchanged for cash, securities or other Property, other
than any such transaction where:

 

(1) the outstanding Voting Stock of the Company is reclassified into
or exchanged for other Voting Stock of the Company or for Voting Stock of the
surviving corporation; and

 

5

 

(2) the holders of the Voting Stock of the Company immediately
prior to such transaction own, directly or indirectly, not less than a majority
of the Voting Stock of the Company or the surviving corporation immediately
after such transaction and in substantially the same proportion as before the
transaction; or

 

(c) during any period of two consecutive years commencing after
the Issue Date, individuals who at the beginning of such period constituted the
Board of Directors (together with any new directors whose election or
appointment by such Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of not less than
three-fourths of the directors 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 then in office; or

 

(d) the shareholders of the Company shall have approved any plan
of liquidation or dissolution of the Company.

 

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

 

“Collateral”  means all the collateral described in the
Collateral Documents.

 

“Collateral Disposition”
means (a) any sale, transfer or other disposition of Collateral (including
any property or assets that would constitute Collateral but for the release of
the Senior Lien and the Second Priority Lien with respect thereto in connection
with such sale, transfer or other disposition), or (b) any casualty or
other insured damage or Condemnation with respect to Collateral.

 

“Collateral Documents”
means (a) the Senior Collateral Documents and (b) the Second Priority
Collateral Documents.

 

“Collateral Subsidiary
Guarantor” means any Subsidiary of the Company that is a party to the
Senior Subsidiary Guarantee Agreement or the Second Priority Subsidiary
Guarantee Agreement.

 

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

 

“Commodity Price Protection
Agreement” means, in respect of a Person, any forward contract, commodity
swap agreement, commodity option agreement or other similar agreement or
arrangement designed to protect such Person against fluctuations in commodity
prices.

 

6

 

“Company” means the
Person named as the “Company” in the first paragraph of this Indenture until a successor
Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Company” shall mean such successor Person and, for
purposes of any provision contained herein and expressly required by the TIA,
each other obligor on the indenture securities.

 

“Condemnation” means any
action or proceeding for the taking of any assets of the Company or its
Subsidiaries, or any part thereof or interest therein, for public or
quasi-public use under the power of eminent domain, by reason of any similar
public improvement or condemnation proceeding.

 

“Consolidated Interest
Coverage Ratio” means, as of any date of determination, the ratio of:

 

(a) the aggregate amount of EBITDA for the most recent four
consecutive fiscal quarters for which internal financial statements are
available prior to such determination date to

 

(b) Consolidated Interest Expense for such four fiscal quarters;

 

provided, however, that:

 

(1) if

 

(A) since the beginning of such period the Company or any
Restricted Subsidiary has Incurred any Debt that remains outstanding or Repaid
any Debt; or

 

(B) the transaction giving rise to the need
to calculate the Consolidated Interest Coverage Ratio is an Incurrence or
Repayment of Debt,

 

Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Incurrence or Repayment as if such
Debt was Incurred or Repaid on the first day of such period, provided that, in
the event of any such Repayment of Debt, EBITDA for such period shall be
calculated as if the Company or such Restricted Subsidiary had not earned any
interest income actually earned during such period in respect of the funds used
to Repay such Debt, and

 

(2) if

 

(A) since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Sale or an
Investment (by merger or otherwise) in any Restricted Subsidiary (or any Person
which becomes a Restricted Subsidiary) or an acquisition of Property which
constitutes all or substantially all of an operating unit of a business;

 

7

 

(B) the transaction giving rise to the need to calculate the
Consolidated Interest Coverage Ratio is such an Asset Sale, Investment or
acquisition; or

 

(C) since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made such an Asset Sale, Investment or acquisition, EBITDA for such period
shall be calculated after giving pro forma effect to such Asset Sale,
Investment or acquisition as if such Asset Sale, Investment or acquisition
occurred on the first day of such period.

 

If any Debt bears a floating
rate of interest and is being given pro forma effect, the interest expense
payable with respect to such Debt shall be calculated as if the base interest
rate in effect for such floating rate of interest on the date of determination
had been the applicable base interest rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Debt if such Interest
Rate Agreement has a remaining term in excess of 12 months). In the event the
Capital Stock of any Restricted Subsidiary is sold during the period, the
Company shall be deemed, for purposes of clause (1) above, to have Repaid
during such period the Debt of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable for
such Debt after such sale.

 

“Consolidated Interest
Expense” means, for any period, the total interest expense of the Company
and its consolidated Restricted Subsidiaries (excluding the non-cash interest
expense related to (x) litigation reserves, (y) closed store
liability reserves and (z) self-insurance reserves), plus, to the extent
not included in such total interest expense, and to the extent Incurred by the
Company or its Restricted Subsidiaries, and without duplication:

 

(a) interest expense attributable to Capital Lease Obligations;

 

(b) amortization of debt discount and debt issuance cost,
including commitment fees;

 

(c) capitalized interest;

 

(d) non-cash interest expense other than expenses under clauses
(x), (y) and (z) above;

 

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

 

(f) net costs associated with Hedging Obligations (including
amortization of fees but excluding costs associated with forward contracts for
inventory in the ordinary course of business);

 

8

 

(g) Disqualified Stock Dividends;

 

(h) Preferred Stock Dividends;

 

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

 

(j) interest accruing on any Debt of any other Person to the
extent such Debt is Guaranteed by the Company or any Restricted Subsidiary; and

 

(k) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or trust
to pay interest or fees to any Person (other than the Company) in connection
with Debt Incurred by such plan or trust;

 

provided,
however, that any program fees or liquidity fees on unused amounts
related to any Qualified Receivables Transaction shall not be included in
Consolidated Interest Expense unless otherwise required by GAAP.

 

“Consolidated Net Income”
means, for any period, the net income (loss) of the Company and its
consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income:

 

(a) any net income (loss) of any Person (other than the Company)
if such Person is not a Restricted Subsidiary, except that:

 

(1) subject to the exclusion contained in clause (d) below,
the Company’s equity in the net income of any such Person for such period shall
be included in such Consolidated Net Income up to the aggregate amount of cash
distributed by such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution to a Restricted Subsidiary, to the limitations
contained in clause (c) below); and

 

(2) the Company’s equity in a net loss of any such Person other
than an Unrestricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;

 

(b) [Intentionally omitted];

 

(c) any net income (loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on
the payment of dividends or the making of distributions, directly or
indirectly, to the Company, except that:

 

(1) subject to the exclusion contained in clause (d) below,
the Company’s equity in the net income of any such Restricted Subsidiary for
such period shall be included in such Consolidated Net Income up to the 

 

9

 

aggregate amount
of cash distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another Restricted
Subsidiary, to the limitation contained in this clause); and

 

(2) the Company’s equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income;

 

(d) any gain or loss realized upon the sale or other disposition
of any Property of the Company or any of its consolidated Subsidiaries
(including pursuant to any Sale and Leaseback Transaction) that is not sold or
otherwise disposed of in the ordinary course of business;

 

(e) any extraordinary gain or loss;

 

(f) the cumulative effect of a change in accounting principles;

 

(g) any non-cash compensation expense realized for grants of
performance shares, stock options or other rights to officers, directors and
employees of the Company or any Restricted Subsidiary, provided that such
shares, options or other rights can be redeemed at the option of the holder
only for Capital Stock of the Company (other than Disqualified Stock);

 

(h) store closing costs;

 

(i) non-cash charges or credits that relate to use of the last-in-first-out
method of accounting for inventory; and

 

(j) loss on debt modifications.

 

Notwithstanding the foregoing,
for purposes of Section 4.04 only, there shall be excluded from
Consolidated Net Income any dividends, repayments of loans or advances or other
transfers of assets from Unrestricted Subsidiaries to the Company or a
Restricted Subsidiary to the extent such dividends, repayments or transfers
increase the amount of Restricted Payments permitted by Section 4.04
pursuant to clause (c)(4) thereof.

 

“Corporate Trust Office”
means the principal office of the Trustee at which at any time its corporate
trust business shall be administered, which office at the date hereof is
located at 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602,
Attention: Corporate Trust Administration, or such other address as the Trustee
may designate from time to time by notice to the Holders and the Company, or
the principal corporate trust office of any successor Trustee (or such other
address as such successor Trustee may designate from time to time by notice to
the Holders and the Company).

 

“corporation” means a
corporation, association, company, limited liability company, joint-stock
company, partnership or business trust.

 

10

 

“Credit Facilities”
means, with respect to the Company or any Restricted Subsidiary, one or more
debt or commercial paper facilities with banks or other institutional lenders
(including the Senior Credit Facilities), providing for revolving credit loans,
term loans, receivables or inventory financing (including through the sale of
receivables or inventory to such lenders or to special purpose, bankruptcy
remote entities formed to borrow from such lenders against such receivables or
inventory), or trade letters of credit, in each case together with Refinancings
thereof on any basis so long as such Refinancing constitutes Debt.

 

“Currency Exchange
Protection Agreement” means, in respect of a Person, any foreign exchange
contract, currency swap agreement, currency option or other similar agreement
or arrangement designed to protect such Person against fluctuations in currency
exchange rates.

 

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

 

“Debt” means, with
respect to any Person on any date of determination (without duplication):

 

(a) the principal of and premium (if any) in respect of:

 

(1) debt of such Person for money borrowed; and

 

(2) debt evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable;

 

(b) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale and Leaseback Transactions entered into by
such Person;

 

(c) all obligations of such Person issued or assumed as the
deferred purchase price of Property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business);

 

(d) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker’s acceptance or similar credit
transaction (other than obligations with respect to letters of credit securing
obligations (other than obligations described in (a) through (c) above)
entered into in the ordinary course of business of such Person to the extent
such letters of credit are not drawn upon or, if and to the extent drawn upon,
such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit);

 

(e) the amount of all obligations of such Person with respect to
the Repayment of any Disqualified Stock or, with respect to any Subsidiary of
such Person, any Preferred Stock (but excluding, in each case, any accrued
dividends);

 

11

 

(f) all obligations of the type referred to in clauses (a) through
(e) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;

 

(g) all obligations of the type referred to in clauses (a) through
(f) of other Persons secured by any Lien on any Property of such Person
(whether or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of such Property or the
amount of the obligation so secured; and

 

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

 

The amount of Debt of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon
the occurrence of the contingency giving rise to the obligation, of any
contingent obligations at such date. The amount of Debt represented by a
Hedging Obligation shall be equal to:

 

(1) zero if such Hedging Obligation has been Incurred pursuant to
clause (g) or (h) of the second paragraph of Section 4.03; or

 

(2) the notional amount of such Hedging Obligation if not Incurred
pursuant to such clauses.

 

“Debt Issuances” means,
with respect to the Company or any Restricted Subsidiary, one or more issuances
of Debt evidenced by notes, debentures, bonds or other similar securities or
instruments.

 

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

 

“Depositary” means, with
respect to any Securities, a clearing agency that is registered as such under
the Exchange Act and is designated by the Company to act as Depositary for such
Securities (or any successor securities clearing agency so registered).

 

“Disqualified Stock”
means, with respect to any Person, any Capital Stock that by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable, in either case at the option of the holder thereof) or otherwise:

 

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

 

(b) is or may become redeemable or repurchaseable at the option of
the holder thereof, in whole or in part; or

 

12

 

(c) is convertible or exchangeable at the option of the holder
thereof for Debt or Disqualified Stock;

 

on or prior to, in the case of
clause (a), (b) or (c), the first anniversary of the Stated Maturity of
the Securities.

 

“Disqualified Stock
Dividends” means all dividends with respect to Disqualified Stock of the
Company held by Persons other than a Wholly Owned Restricted Subsidiary. The
amount of any such dividend shall be equal to the quotient of such dividend
divided by the difference between one and the maximum statutory federal income
tax rate (expressed as a decimal number between 1 and 0) then applicable to the
Company.

 

“EBITDA” means, for any
period, an amount equal to, for the Company and its consolidated Restricted
Subsidiaries:

 

(a) the sum of Consolidated Net Income for such period, plus the
following to the extent reducing Consolidated Net Income for such period:

 

(1) the provision for taxes based on income or profits or utilized
in computing net loss;

 

(2) Consolidated Interest Expense and non-cash interest expense
related to litigation reserves, closed store liability reserves and
self-insurance reserves, to the extent excluded from Consolidated Interest
Expense;

 

(3) depreciation;

 

(4) amortization of intangibles;

 

(5) non-cash impairment charges;

 

(6) any expenses or charges (other than depreciation or
amortization expense) related to any Equity Offering, Permitted Investment,
acquisition, disposition, recapitalization or the Incurrence of Debt permitted
to be Incurred by the Indenture (including a refinancing thereof) (whether or
not successful), including (i) such fees, expenses or charges related to
the offering of Credit Facilities, Qualified Receivables Transactions or Debt
Issuances and other Debt and (ii) any amendment or other modification of
Credit Facilities, Qualified Receivables Transactions or Debt Issuances and, in
each case, deducted (and not added back) in computing Consolidated Net Income;

 

(7) the amount of any restructuring charges, integration costs or
other business optimization expenses or reserves deducted (and not added back)
in such period in computing Consolidated Net Income, including any one-time
costs (including costs related to the closure and/or consolidation of 

 

13

 

stores)
incurred in connection with acquisitions on or after June 4, 2007;

 

(8) the amount of net cost savings projected by the Company in
good faith to be realized as a result of specified actions taken or initiated
during or prior to such period (calculated on a pro forma
basis as though such cost savings had been realized on the first day of such
period), net of the amount of actual benefits realized during such period from
such actions; provided that (x) such cost savings are reasonably
identifiable and factually supportable, (y) such actions are taken no
later than 36 months after June 4, 2007 and (z) the aggregate amount of
cost savings added pursuant to this clause (8) shall not exceed $150.0
million for any four consecutive quarter period (which adjustments may be
incremental to pro forma cost savings
adjustments made pursuant to the definition of “Consolidated Interest Coverage
Ratio”); and

 

(9) any other non-cash items (other than any such non-cash item to
the extent that it represents an accrual of or reserve for cash expenditures in
any future period), minus

 

(b) all non-cash items increasing Consolidated Net Income for such
period (other than any such non-cash item to the extent that it will result in
the receipt of cash payments in any future period).

 

Notwithstanding the foregoing
clause (a), the provision for taxes and the depreciation, amortization and
non-cash items of a Restricted Subsidiary shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted
at the date of determination to be dividended to the Company 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 shareholders.

 

“8.125% Notes” means the
Company’s 8.125% Senior Secured Notes due 2010 issued under the Indenture dated
as of April 22, 2003, as supplemented, among the Company, the Subsidiary
Guarantors and The Bank of New York Trust Company, N.A., as successor trustee, and
outstanding on the Issue Date.

 

“Equipment Financing
Transaction” means any arrangement (together with any Refinancing thereof)
with any Person pursuant to which the Company or any Restricted Subsidiary
Incurs Debt secured by a Lien on equipment or equipment related property of the
Company or any Restricted Subsidiary.

 

“Equity Offering” means (a) an
underwritten offering of common stock of the Company by the Company pursuant to
an effective registration statement under the Securities Act or (b) so
long as the Company’s common stock is, at the time, listed or 

 

14

 

quoted on a
national securities exchange (as such term is defined in the Exchange Act), an
offering of common stock by the Company in a transaction exempt from or not
subject to the registration requirements of the Securities Act.

 

“Event of Default” has
the meaning set forth under Section 6.01.

 

“Exchange Act” means the
Securities Exchange Act of 1934.

 

“Expansion Capital
Expenditure” means any capital expenditure incurred by the Company or any
Restricted Subsidiary in developing, relocating, integrating, remodeling and
refurbishing a warehouse, distribution center, store or other facility (other
than ordinary course maintenance) for carrying on the business of the Company
and its Restricted Subsidiaries that the Board of Directors determines in good
faith will enhance the income generating ability of the warehouse, distribution
center, store or other facility.

 

“Fair Market Value”
means, with respect to any Property, the price that could be negotiated in an
arm’s-length free market transaction, for cash, between a willing seller and a
willing buyer, neither of whom is under undue pressure or compulsion to
complete the transaction. Pressure or compulsion shall not include sales of
Property conducted in compliance with the requirements of a regulatory
authority in connection with an acquisition or merger permitted by the
Indenture. Fair Market Value shall be determined, except as otherwise provided:

 

(a) if such Property has a Fair Market Value equal to or less than
$25.0 million, by any Officer of the Company; or

 

(b) if such Property has a Fair Market Value in excess of $25.0
million, by a majority of the Board of Directors and evidenced by a Board Resolution,
dated within 30 days of the relevant transaction, delivered to the Trustee.

 

“Foreign Subsidiary”
means any Subsidiary of the Company which (a) is organized under the laws
of any jurisdiction outside of the United States, (b) is organized under the
laws of Puerto Rico or the U.S. Virgin Islands, (c) has substantially all
its operations outside of the United States, (d) has substantially all its
operations in Puerto Rico or the U.S. Virgin Islands, or (e) does not own
any material assets other than Capital Stock of one or more Subsidiaries of the
type described in (a) through (d) above.

 

“GAAP” means United
States generally accepted accounting principles as in effect on February 12,
2003, including those set forth:

 

(a) in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants;

 

(b) in the statements and pronouncements of the Financial
Accounting Standards Board;

 

(c) in such other statements by such other entity as approved by a
significant segment of the accounting profession; and

 

15

 

(d) the rules and regulations of the Commission governing the
inclusion of financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
Commission.

 

“Guarantee” means any
obligation, contingent or otherwise, of any Person directly or indirectly
guaranteeing any Debt of any other Person and any obligation, direct or
indirect, contingent or otherwise, of such Person:

 

(a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt of such other Person (whether arising by
virtue of partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise); or

 

(b) entered into for the purpose of assuring in any other manner
the obligee against loss in respect thereof (in whole or in part);

 

provided,
however, that the term “Guarantee” shall not include:

 

(1) endorsements for collection or deposit in the ordinary course
of business; or

 

(2) a contractual commitment by one Person to invest in another
Person for so long as such Investment is reasonably expected to constitute a
Permitted Investment under clause (b) of the definition of “Permitted
Investment.”

 

The term “Guarantee”
used as a verb has a corresponding meaning. The term “Guarantor” shall
mean any Person Guaranteeing any obligation.

 

“Hedging Obligation” of
any Person means any obligation of such Person pursuant to any Interest Rate
Agreement, Currency Exchange Protection Agreement, Commodity Price Protection
Agreement or any other similar agreement or arrangement.

 

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

 

“Incur” means, with
respect to any Debt or other obligation of any Person, to create, issue, incur
(by merger, conversion, exchange or otherwise), extend, assume, Guarantee or
become liable in respect of such Debt or other obligation or the recording, as
required pursuant to GAAP or otherwise, of any such Debt or obligation on the
balance sheet of such Person (and “Incurrence” and “Incurred”
shall have meanings correlative to the foregoing); provided, however,
that a change in GAAP that results in an obligation of such Person that exists
at such time, and is not theretofore classified as Debt, becoming Debt shall
not be deemed an Incurrence of such Debt; provided  further, however,
that any Debt or other obligations of a Person existing at the time such Person

 

16

 

becomes a
Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall
be deemed to be Incurred by such Subsidiary at the time it becomes a
Subsidiary; and provided  further, however, that solely for
purposes of determining compliance with Section 4.03, amortization of debt
discount shall not be deemed to be the Incurrence of Debt, provided that
in the case of Debt sold at a discount, the amount of such Debt Incurred shall
at all times be the aggregate principal amount at Stated Maturity.

 

“Indenture” means this
instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof including, for all purposes
of this instrument and any such supplemental indenture, the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this instrument
and any such supplemental indenture, respectively.

 

“Independent Financial
Advisor” means an investment banking firm of national standing or any third
party appraiser of national standing, provided that such firm or
appraiser is not an Affiliate of the Company.

 

“Intercreditor Agreement”
means the Amended and Restated Collateral Trust and Intercreditor Agreement,
dated as of June 27, 2001, as amended and restated as of May 28,
2003, as amended as of September 22, 2004, as amended as of September 30,
2005, as amended as of November 8, 2006, as amended as of June 4,
2007, among the Company, the Subsidiary Guarantors, the Second Priority
Collateral Trustee, the Senior Collateral Agent and each Second Priority
Representative, as the same may be amended, restated, supplemented or otherwise
modified from time to time.

 

“Interest Rate Agreement”
means, for any Person, any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement or other similar agreement designed
to protect against fluctuations in interest rates.

 

“Investment” by any
Person means any direct or indirect loan (other than advances to customers in
the ordinary course of business that are recorded as accounts receivable on the
balance sheet of such Person), advance or other extension of credit or capital
contribution (by means of transfers of cash or other Property to others or
payments for Property or services for the account or use of others, or
otherwise) to, or Incurrence of a Guarantee of any obligation of, or purchase
or acquisition of Capital Stock, bonds, notes, debentures or other securities
or evidence of Debt issued by, any other Person. For purposes of
Sections 4.04 and 4.11, and the definition of “Restricted Payment”, “Investment”
shall include the portion (proportionate to the Company’s equity interest in
such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary
of the Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent “Investment” in an Unrestricted Subsidiary of an amount (if
positive) equal to:

 

(a) the Company’s “Investment” in such Subsidiary at the time of
such redesignation; less

 

17

 

(b) the portion (proportionate to the Company’s equity interest in
such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary
at the time of such redesignation.

 

In determining the amount of
any Investment made by transfer of any Property other than cash, such Property
shall be valued at its Fair Market Value at the time of such Investment.

 

“Investment Grade Rating”
means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and
BBB- (or the equivalent) by S&P, without regard to outlook.

 

“Issue Date” means the
date on which the Original Securities are initially issued.

 

“Lien” means, with
respect to any Property of any Person, any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, lien,
charge, easement (other than any easement not materially impairing usefulness
or marketability), encumbrance, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever on or
with respect to such Property (including any Capital Lease Obligation,
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing or any Sale and Leaseback
Transaction).

 

“Moody’s” means Moody’s
Investors Service, Inc. or any successor to the rating agency business
thereof.

 

“Net Available Cash”
from any Asset Sale means cash payments received therefrom (including any cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring Person of Debt or other obligations relating to the Property that is
the subject of such Asset Sale or received in any other non-cash form), in each
case net of:

 

(a) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, provincial, foreign
and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Sale;

 

(b) all payments made on any Debt that is secured by any Property
subject to such Asset Sale, in accordance with the terms of any Lien upon or
other security agreement of any kind with respect to such Property, or which
must by its terms, or in order to obtain a necessary consent to such Asset
Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale;

 

(c) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Sale; and

 

18

 

(d) the deduction of appropriate amounts provided by the seller as
a reserve, in accordance with GAAP, against any liabilities associated with the
Property disposed in such Asset Sale and retained by the Company or any
Restricted Subsidiary after such Asset Sale.

 

“Obligors” means the
Company, the Subsidiary Guarantors and any other Person who is liable for any
of the Secured Obligations.

 

“Officer” means the
Chief Executive Officer, the President, the Chief Financial Officer, the Chief
Accounting Officer, Treasurer, the Vice President of Financial Accounting or
any Executive Vice President of the Company.

 

“Officers’ Certificate”
means a certificate signed by two Officers of the Company, at least one of whom
shall be the principal executive officer or principal financial officer of the
Company, and delivered to the Trustee.

 

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

 

“Original Securities”
has the meaning specified in Section 2.01.

 

“Permitted Holder” means
(a) Leonard Green & Partners L.P. or any of its Affiliates and
(b), The Jean Coutu Group (PJC) Inc. or any of its Affiliates.

 

“Permitted Investment”
means any Investment by the Company or a Restricted Subsidiary in:

 

(a) (1) the Company, (2) any Restricted Subsidiary or (3) any
Person that will, upon the making of such Investment, become a Restricted
Subsidiary;

 

(b) any Person if as a result of such Investment such Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its Property to, the Company or a Restricted Subsidiary;

 

(c) cash and Temporary Cash Investments;

 

(d) receivables owing to the Company or a 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 Company
or such Restricted Subsidiary deems reasonable under the circumstances;

 

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

 

(f) loans and advances to employees made in the ordinary course of
business in accordance with applicable law consistent with past practices of
the 

 

19

 

Company or
such Restricted Subsidiary, as the case may be, provided that such loans
and advances do not exceed $25.0 million at any one time outstanding;

 

(g) stock, obligations or other securities received in settlement
of debts created in the ordinary course of business and owing to the Company or
a Restricted Subsidiary or in satisfaction of judgments;

 

(h) any Person to the extent such Investment represents the
non-cash portion of the consideration received in connection with an Asset Sale
consummated in compliance with Section 4.06;

 

(i) Hedging Obligations permitted under clause (g), (h) or (i) of
the second paragraph of Section 4.03;

 

(j) any Person if the Investments are outstanding on the Issue
Date and not otherwise described in clauses (a) through (i) above;

 

(k) Investments in Unrestricted Subsidiaries or joint venture
entities (including purchasing cooperatives) that do not exceed $15.0 million
outstanding at any one time in the aggregate;

 

(l) other Investments that do not exceed $10.0 million outstanding
at any one time in the aggregate;

 

(m) Investments in any entity, formed by the Company or a
Restricted Subsidiary, organized under Section 501(c)(3) of the Code,
that do not exceed an aggregate amount of $10.0 million in any fiscal year; and

 

(n) any assets, Capital Stock or other securities to the extent
acquired in exchange for shares of Capital Stock of the Company (other than
Disqualified Stock).

 

“Permitted
Liens” means:

 

(a) Liens to secure Debt permitted to be Incurred under
clause (a), (b), (d), (l) or (s) (with respect to clause (d)) of
the second paragraph of Section 4.03; provided, however,
that:

 

(1) if such Debt is Incurred pursuant to such clause (b) (other
than pursuant to a Sale and Leaseback Transaction, a Capital Lease Obligation
or by a Receivables Entity in a Qualified Receivables Transaction) or clause
(l), a second priority Lien (subject to Permitted Liens) upon the Property (if
such Property does not otherwise constitute Second Priority Collateral at such
time) subject to such Lien is concurrently granted as security for the
Securities such that such Property also constitutes Second Priority Collateral
subject to the Second Priority Collateral Documents, except to the extent such
Property constitutes cash or cash equivalents 

 

20

 

securing only
letter of credit obligations under Credit Facilities following a default under
such Credit Facilities; and

 

(2) if such Debt is Incurred pursuant to such clause (d) or (s) (with
respect to clause (d)), a second priority Lien (subject to Permitted Liens)
upon the Property subject to such Lien is concurrently granted as security for
the Securities such that such Property constitutes Second Priority Collateral
subject to the Second Priority Lien and the Securities are secured by such Lien
equally and ratably (or prior to) such Debt pursuant to the Second Priority
Collateral Documents;

 

(b) Liens to secure Debt permitted to be Incurred under clause
(e), (q) or (r) of the second paragraph of Section 4.03, provided
that any such Lien may not extend to any Property of the Company or any
Restricted Subsidiary, other than the Property acquired, developed, constructed
or leased with the proceeds of such Debt and any improvements or additions to
such Property;

 

(c) Liens for taxes, assessments or governmental charges or levies
on the Property of the Company or any Restricted Subsidiary if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision that shall be required in conformity with GAAP shall have
been made therefor;

 

(d) Liens imposed by law, such as carriers’, warehousemen’s and
mechanics’ Liens and other similar Liens, on the Property of the Company or any
Restricted Subsidiary arising in the ordinary course of business and securing
payment of obligations that are not more than 60 days past due or are being
contested in good faith and by appropriate proceedings;

 

(e) Liens on the Property of the Company or any Restricted
Subsidiary Incurred in the ordinary course of business to secure performance of
obligations with respect to statutory or regulatory requirements, performance
or return-of-money bonds, surety bonds or other obligations of a like nature
and Incurred in a manner consistent with industry practice, in each case which
are not Incurred in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of Property
and which do not in the aggregate impair in any material respect the use of
Property in the operation of the business of the Company and the Restricted
Subsidiaries taken as a whole;

 

(f) Liens on Property at the time the Company or any Restricted
Subsidiary acquired such Property, including any acquisition by means of a
merger or consolidation with or into the Company or any Restricted Subsidiary; provided,
however, that any such Lien may not extend to any other Property of the
Company or any Restricted Subsidiary; provided  further, however,
that such Liens shall not have been Incurred in anticipation of or in
connection with the 

 

21

 

transaction or
series of transactions pursuant to which such Property was acquired by the
Company or any Restricted Subsidiary;

 

(g) Liens on the Property of a Person at the time such Person
becomes a Restricted Subsidiary; provided, however, that any such
Lien may not extend to any other Property of the Company or any other
Restricted Subsidiary that is not a direct Subsidiary of such Person; provided
further, however, that any such Lien was not Incurred in
anticipation of or in connection with the transaction or series of transactions
pursuant to which such Person became a Restricted Subsidiary;

 

(h) pledges or deposits by the Company or any Restricted
Subsidiary under workmen’s compensation laws, unemployment insurance laws or
similar legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Debt) or leases to which the Company
or any Restricted Subsidiary is party, or deposits to secure public or
statutory obligations of the Company or any Restricted Subsidiary, or deposits
for the payment of rent, in each case Incurred in the ordinary course of
business;

 

(i) utility easements, building restrictions and such other
encumbrances or charges against real Property as are of a nature generally
existing with respect to properties of a similar character;

 

(j) Liens arising out of judgments or awards against the Company
or a Restricted Subsidiary with respect to which the Company or the Restricted
Subsidiary shall then be proceeding with an appeal or other proceeding for
review and which do not give rise to an Event of Default;

 

(k) leases or subleases of real property granted by the Company or
a Restricted Subsidiary to any other Person in the ordinary course of business
and not materially impairing the use of the real property in the operation of
the business of the Company or the Restricted Subsidiary;

 

(l) licenses of intellectual property in the ordinary course of
business;

 

(m) Liens existing on the Issue Date not otherwise described in
clauses (a) through (l) above;

 

(n) Liens on the Property of the Company or any Restricted
Subsidiary to secure any Refinancing, in whole or in part, of any Debt secured
by Liens referred to in clause (a) (but only to the extent it relates to
clause (a) or (d) referred to therein), (b) (other than Liens
securing Debt Incurred pursuant to clause (r) referred to therein),
(f), (g), or (m) above; provided, however, that (1) in
the case of clause (a) or (b) above, the proviso to such clause
remains satisfied and (2) any such Lien shall be limited to all or part of
the same Property that secured the original Lien (together with improvements
and accessions to such Property) and the aggregate principal amount of Debt
that is secured by such Lien shall not be increased to an amount greater than
the sum of:

 

22

 

(A) the outstanding principal amount, or, if greater, the
committed amount, of the Debt secured by Liens described under clause (b) (except
as referred to above), (f), (g), or (m) above, as the case may be, at the
time the original Lien became a Permitted Lien under this Indenture; and

 

(B) an amount necessary to pay any fees and expenses, including
premiums and defeasance costs, incurred by the Company or such Restricted
Subsidiary in connection with such Refinancing; and

 

(o) Liens not otherwise permitted by clauses (a) through (n) above
encumbering assets that have an aggregate Fair Market Value not in excess of
$5.0 million.

 

“Permitted Refinancing Debt”
means any Debt that Refinances any other Debt, including any successive
Refinancings, so long as:

 

(a) such Debt is in an aggregate principal amount (or if Incurred
with original issue discount, an aggregate issue price) not in excess of the
sum of:

 

(1) the aggregate principal amount (or if Incurred with original
issue discount, the aggregate accreted value) then outstanding of the Debt
being Refinanced; and

 

(2) an amount necessary to pay any fees and expenses, including
premiums and defeasance costs, related to such Refinancing;

 

(b) the Average Life of such Debt is equal to or greater than the
Average Life of the Debt being Refinanced;

 

(c) the Stated Maturity of such Debt is no earlier than the Stated
Maturity of the Debt being Refinanced; and

 

(d) the new Debt shall not be senior in right of payment to the
Debt that is being Refinanced;

 

provided,
however, that Permitted Refinancing Debt shall not include: (x) Debt
of a Subsidiary that is not a Subsidiary Guarantor that Refinances Debt of the
Company or a Subsidiary Guarantor, or (y) Debt of the Company or a
Restricted Subsidiary that Refinances Debt of an Unrestricted Subsidiary.

 

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

 

23

 

“Preferred Stock” means any Capital
Stock of a Person, however designated, which entitles the holder thereof to a
preference with respect to the payment of dividends, or as to the distribution
of assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of any other class of Capital Stock issued by such Person.

 

“Preferred Stock Dividends” means all
dividends with respect to Preferred Stock of Restricted Subsidiaries held by
Persons other than the Company or a Wholly Owned Restricted Subsidiary. The
amount of any such dividend shall be equal to the quotient of such dividend
divided by the difference between one and the maximum statutory federal income
rate (expressed as a decimal number between 1 and 0) then applicable to the
issuer of such Preferred Stock.

 

“pro forma” means, unless the context
otherwise requires, with respect to any calculation made or required to be made
pursuant to the terms hereof, a calculation performed in accordance with Article 11
of Regulation S-X promulgated under the Securities Act, as interpreted in good
faith by the Board of Directors after consultation with the independent
certified public accountants of the Company, or otherwise a calculation made in
good faith by the Board of Directors after consultation with the independent
certified public accountants of the Company, as the case may be.

 

“Property” means, with respect to any
Person, any interest of such Person in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible, including Capital Stock in,
and other securities of, any other Person. For purposes of any calculation
required pursuant to this Indenture, the value of any Property shall be its
Fair Market Value.

 

“Prospectus Supplement” means the
prospectus supplement dated
                  ,
2008 to the prospectus dated June 26, 2008, relating to the offering and sale of
the Securities.

 

“Public Debt” means obligations of the
Company or of a Subsidiary Guarantor evidenced by bonds, debentures, notes and
similar instruments issued in a manner and pursuant to documentation customary
in the market for obligations publicly traded or traded in the high yield bond
or other private placement or similar market primarily among financial
institutions (other than any such obligations that are traded primarily among
commercial banks).

 

“Purchase Money Debt” means Debt
Incurred to finance the acquisition, development, construction or lease by the
Company or a Restricted Subsidiary of Property, including additions and improvements
thereto, where the maturity of such Debt does not exceed the anticipated useful
life of the Property being financed; provided, however, that such
Debt is Incurred within 24 months after the completion of the acquisition,
development, construction or lease of such Property by the Company or such
Restricted Subsidiary.

 

“Qualified Consideration” means, with
respect to any Asset Sale (or any other transaction or series of related
transactions required to comply with clause (b) of the first paragraph of Section 4.06),
any one or more of (a) cash or cash equivalents, (b) notes or
obligations that are converted into cash (to the extent of the cash received)
within 180 days of such Asset Sale, (c) equity securities listed on a
national securities exchange (as 

 

24

 

such term is defined in the
Exchange Act) and converted into cash (to the extent of the cash received)
within 180 days of such Asset Sale, (d) the assumption by the purchaser of
liabilities of the Company or any Restricted Subsidiary (other than liabilities
that are by their terms subordinated to the Securities) as a result of which
the Company and the Restricted Subsidiaries are no longer obligated with
respect to such liabilities, (e) Additional Assets or (f) other
Property, provided that the aggregate Fair Market Value of all Property
received since the Issue Date by the Company and its Restricted Subsidiaries
pursuant to Asset Sales (or such other transactions) that is used to determine
Qualified Consideration pursuant to this clause (f) does not exceed the
greater of $100.0 million and 5% of Total Assets.

 

“Qualified Receivables Transaction”
means any transaction or series of transactions that may be entered into by the
Company or any of its Subsidiaries pursuant to which the Company or any of its
Subsidiaries may sell, convey or otherwise transfer to:

 

(a) a
Receivables Entity (in the case of a transfer by the Company or any of its
Subsidiaries); and

 

(b) any
other Person (in the case of a transfer by a Receivables Entity),

 

or
may grant a security interest in, any accounts receivable (whether now existing
or arising in the future) of the Company or any of its Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing
those accounts receivable, all contracts and all Guarantees or other
obligations in respect of those accounts receivable, proceeds of those accounts
receivable and other assets which are customarily transferred or in respect of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable; provided
that:

 

(1) if
the transaction involves a transfer of accounts receivable with Fair Market
Value equal to or greater than $25.0 million, the Board of Directors shall have
determined in good faith that the Qualified Receivables Transaction is
economically fair and reasonable to the Company and the Receivables Entity;

 

(2) all
sales of accounts receivable and related
assets to or by the Receivables Entity are made at Fair Market Value; and

 

(3) the
financing terms, covenants, termination events and other provisions thereof
shall be market terms (as determined in good faith by the Board of Directors).

 

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

 

“Real Estate Financing Transaction”
means any arrangement with any Person pursuant to which the Company or any
Restricted Subsidiary Incurs Debt secured 

 

25

 

by a Lien on real property
of the Company or any Restricted Subsidiary and related personal property
together with any Refinancings thereof.

 

“Receivables Entity” means a Wholly
Owned Subsidiary of the Company (or another Person formed for the purposes of
engaging in a Qualified Receivables Transaction with the Company in which the
Company or any Subsidiary of the Company makes an Investment and to which the
Company or any Subsidiary of the Company transfers accounts receivable and
related assets) which engages in no activities other than in connection with
the financing of accounts receivable of the Company and its Subsidiaries, all
proceeds thereof and all rights (contractual or other), collateral and other
assets relating thereto, and any business or activities incidental or related
to that business, and (with respect to any Receivables Entity formed after the
Issue Date) which is designated by the Board of Directors (as provided below)
as a Receivables Entity and:

 

(a) no
portion of the Debt or any other obligations (contingent or otherwise) of
which:

 

(1) is
Guaranteed by the Company or any Subsidiary of the Company (excluding
Guarantees of obligations (other than the principal of, and interest on, Debt)
pursuant to Standard Securitization Undertakings);

 

(2) is
recourse to or obligates the Company or any Subsidiary of the Company in any
way other than pursuant to Standard Securitization Undertakings; or

 

(3) subjects
any property or asset of the Company or any Subsidiary of the Company, directly
or indirectly, contingently or otherwise, to the satisfaction thereof, other
than pursuant to Standard Securitization Undertakings;

 

(b) with
which neither the Company nor any Subsidiary of the Company has any material contract, agreement, arrangement or understanding
other than on terms which the Company reasonably believes to be no less
favorable to the Company or the Subsidiary than those that might be obtained at
the time from Persons that are not Affiliates of the Company; and

 

(c) to
which neither the Company nor any Subsidiary of the Company has any obligation
to maintain or preserve the entity’s financial condition or cause the entity to
achieve certain levels of operating results other than pursuant to Standard
Securitization Undertakings.

 

Any designation of this kind by the Board of
Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to the designation and an
Officers’ Certificate certifying that the designation complied with the
foregoing conditions.  For the avoidance
of doubt, Rite Aid Funding I and Rite Aid Funding II are designated
Receivables Entities without any further action on the part of the Company.

 

26

 

“Receivables Facility” means the
Receivables Financing Agreement dated as of September 21, 2004 (as such
may be further amended, modified, supplemented or Refinanced from time to
time),  among Rite Aid Funding II, the
Investors named therein, the Banks named therein, Citicorp North America Inc.,
as Program Agent, Rite Aid Headquarters Funding Inc., as Collection Agent, the
Originators named therein and JPMorgan Chase Bank, as trustee. For the
avoidance of doubt, the Receivables Facility, as in effect on the Issue Date,
constitutes a Qualified Receivables Transaction without any further action on
behalf of the Company.

 

“Refinance” means, in respect of any
Debt, to refinance, extend, renew, refund, repay, prepay, repurchase, redeem,
defease or retire, or to issue other Debt, in exchange or replacement for, such
Debt. “Refinanced” and “Refinancing” shall have correlative
meanings.

 

“Related Business” means any business
that is related, ancillary or complementary to the businesses of the Company
and the Restricted Subsidiaries on the Issue Date.

 

“Repay” means, in respect of any Debt,
to repay, prepay, repurchase, redeem, legally defease or otherwise retire such
Debt. “Repayment” and “Repaid” shall have correlative meanings.
For purposes of Section 4.06 and the definition of “Consolidated Interest
Coverage Ratio,” Debt shall be considered to have been Repaid only to the
extent the related loan commitment, if any, shall have been permanently reduced
in connection therewith.

 

“Representatives” means each of the
Senior Collateral Agent and the Second Priority Representatives.

 

“Restricted Payment” means:

 

(a) any
dividend or distribution (whether made in cash, securities or other Property)
declared or paid on or with respect to any shares of Capital Stock of the
Company or any Restricted Subsidiary (including any payment in connection with
any merger or consolidation with or into the Company or any Restricted
Subsidiary), except for any dividend or distribution that is made solely to the
Company or a Restricted Subsidiary (and, if such Restricted Subsidiary is not a
Wholly Owned Restricted Subsidiary, to the other shareholders of such
Restricted Subsidiary on a pro rata basis or on a basis that results in the
receipt by the Company or a Restricted Subsidiary of dividends or distributions
of greater value than it would receive on a pro rata basis) or any dividend or
distribution payable solely in shares of Capital Stock (other than Disqualified
Stock) of the Company;

 

(b) the
purchase, repurchase, redemption, acquisition or retirement for value of any
Capital Stock of the Company or any Restricted Subsidiary (other than from the
Company or a Restricted Subsidiary);

 

(c) the
purchase, repurchase, redemption, acquisition or retirement for value, prior to
the date for any scheduled maturity, sinking fund or amortization or other installment
payment, of any Subordinated Obligation (other than the purchase, repurchase or
other acquisition of any Subordinated Obligation 

 

27

 

purchased in anticipation of
satisfying a scheduled maturity, sinking fund or amortization or other
installment obligation, in each case due within one year of the date of
acquisition);

 

(d) any
Investment (other than Permitted Investments) in any Person; or

 

(e) the
issuance, sale or other disposition of Capital Stock of any Restricted
Subsidiary to a Person other than the Company or another Restricted Subsidiary
if the result thereof is that such Restricted Subsidiary shall cease to be a
Restricted Subsidiary, in which event the amount of such “Restricted Payment”
shall be the Fair Market Value of the remaining interest, if any, in such
former Restricted Subsidiary held by the Company and the other Restricted
Subsidiaries.

 

Notwithstanding the foregoing, no payment or
other transaction permitted by clause (c) or (f) of the second
paragraph of Section 4.08 will be considered a Restricted Payment.

 

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

 

“S&P” means Standard &
Poor’s Ratings Service or any successor to the rating agency business thereof.

 

“Sale and Leaseback Transaction” means
any direct or indirect arrangement relating to Property now owned or hereafter
acquired whereby the Company or a Restricted Subsidiary transfers such Property
to another Person and the Company or a Restricted Subsidiary leases it from
such Person.

 

“Second Priority Collateral” means all
the “Second Priority Collateral” as defined in any Second Priority Collateral
Documents and shall also include the mortgaged properties described in the
Senior Credit Facility and the proceeds thereof.

 

“Second Priority Collateral Documents”
means the Second Priority Subsidiary Security Agreement, the Second Priority
Subsidiary Guarantee Agreement, the Second Priority Indemnity, Subrogation and
Contribution Agreement, the Intercreditor Agreement and each of the mortgages,
security agreements and other instruments and documents executed and delivered
by any Subsidiary Guarantor pursuant to any of the foregoing for purposes of
providing collateral security or credit support for any Second Priority Debt
Obligation or obligation under the Second Priority Subsidiary Guarantee
Agreement (including, in each case, any schedules, exhibits or annexes
thereto), in each case as the same may be amended, restated, supplemented or
otherwise modified from time to time.

 

“Second Priority Collateral Trustee”
means Wilmington Trust Company, in its capacity as collateral trustee under the
Intercreditor Agreement and the Second Priority Collateral Documents, and its
successors.

 

“Second Priority Debt” means the
Securities, the 7.5% Notes due 2017 and any other Debt of the Company
Guaranteed by the Subsidiary Guarantors pursuant to 

 

28

 

the Second Priority
Subsidiary Guarantee Agreement with such Guarantee secured on a pari  passu
basis by the Second Priority Collateral; provided, however, that
such Debt is permitted to be incurred, secured and guaranteed on such basis by
each Senior Debt Document and each Second Priority Debt Document.

 

“Second Priority Debt Documents” means
(a) with respect to the Securities, this Indenture and the Securities and (b) with
respect to any other series, issue or class of Second Priority Debt, the
promissory notes, indentures, Collateral Documents or other operative
agreements evidencing or governing such Debt, in each case as the same may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Second Priority Debt Facility” means
the indenture or other governing agreement with respect to any Second Priority
Debt.

 

“Second Priority Debt Obligations”
means, with respect to any series, issue or class of Second Priority Debt, (a) all
principal of and interest (including, without limitation, any interest which
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of the Company, whether or not
allowed or allowable as a claim in any such proceeding) payable with respect to
such Second Priority Debt, (b) all other amounts payable by the Company to
the related Second Priority Debt Parties under the related Second Priority Debt
Documents and (c) any renewals, extensions or Refinancings thereof of the
foregoing.

 

“Second Priority Debt Parties” means,
with respect to any series, issue or class of Second Priority Debt, the holders
of such indebtedness from time to time, any trustee or agent therefor under any
related Second Priority Debt Documents and the beneficiaries of each
indemnification obligation undertaken by the Company or any Obligor under any
related Second Priority Debt Documents, but shall not include the Obligors or
any controlled Affiliates thereof (unless any such Obligor or controlled
Affiliate is a holder of such Second Priority Debt, a trustee or agent therefor
or beneficiary of such an indemnification obligation named as such in a Second
Priority Debt Document).

 

“Second Priority Indemnity, Subrogation
and Contribution Agreement” means the Second Priority Indemnity,
Subrogation and Contribution Agreement, dated as of June 27, 2001, as
amended and restated as of May 28, 2003, among the Company, the Subsidiary
Guarantors and the Second Priority Collateral Trustee, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Second Priority Instructing Group”
means Second Priority Representatives with respect to Second Priority Debt
Facilities under which at least a majority of the then aggregate amount of
Second Priority Debt Obligations are outstanding.

 

“Second Priority Lien” means the liens
on the Second Priority Collateral in favor of the Second Priority Debt Parties
under the Second Priority Collateral Documents.

 

29

 

“Second Priority Representative”
means, in respect of a Second Priority Debt Facility, the Trustee and the
trustee, administrative agent, security agent or similar agent under each other
Second Priority Debt Facility, as the case may be, and each of their successors
in such capacities.

 

“Second Priority Subsidiary Guarantee
Agreement” means the Second Priority Subsidiary Guarantee Agreement, dated
as of June 27, 2001, as amended and restated as of May 28, 2003, made
by the Subsidiary Guarantors (including any additional Subsidiary Guarantor
becoming party thereto after May 28, 2003) in favor of the Second Priority
Collateral Trustee for the benefit of the Second Priority Debt Parties, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.

 

“Second Priority Subsidiary Security
Agreement” means the Second Priority Subsidiary Security Agreement, dated
as of June 27, 2001, as amended and restated as of May 28, 2003, made
by the Subsidiary Guarantors (including any additional Subsidiary Guarantor
becoming party thereto after May 28, 2003) in favor of the Second Priority
Collateral Trustee for the benefit of the Second Priority Debt Parties, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.

 

“Secured Debt” means indebtedness for
money borrowed which is secured by a mortgage, pledge, lien, security interest
or encumbrance on property of the Company or any Restricted Subsidiary, but
shall not include guarantees arising in connection with the sale, discount,
guarantee or pledge of notes, chattel mortgages, leases, accounts receivable,
trade acceptances and other paper arising, in the ordinary course of business,
out of installment or conditional sales to or by, or transactions involving
title retention with, distributors, dealers or other customers, of merchandise,
equipment or services.

 

“Secured Obligations” means the Senior
Obligations, the Second Priority Debt Obligations and any other Debt or
obligations related to such Debt that is secured by a Lien on any Collateral.

 

“Securities” means the Securities, as
designated in the first paragraph of this Indenture.

 

“Securities Act” means the Securities
Act of 1933, as it may be amended and any successor act thereto.

 

“Senior Bank” means a “Bank” as
defined in the Senior Credit Facility.

 

“Senior Bank Obligations” means (a) the
principal of each loan made under the Senior Credit Facility, (b) all
reimbursement and cash collateralization obligations in respect of letters of
credit issued under the Senior Credit Facility, (c) all monetary
obligations of the Company or any Subsidiary under each Senior Hedging
Agreement (as defined in the Senior Credit Facility) entered into (1) prior
to September 30, 2005 with any counterparty that was a Senior Bank (or an
Affiliate thereof) on September 30, 2005 or (2) on or after September 30,
2005 with any 

 

30

 

counterparty that was a
Senior Bank (or an Affiliate thereof) at the time such Senior Hedging Agreement
was entered into, (d) all interest on the loans, letter of credit reimbursement
and other obligations under the Senior Credit Facility or such Senior Hedging
Agreements (including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Company or any Subsidiary
Guarantor, whether or not allowed or allowable as a claim in such proceeding), (e) all
other amounts payable by the Company under the Senior Debt Documents and (f) all
increases, renewals, extensions and Refinancings of the foregoing.

 

“Senior Bank Parties” means each party
to the Senior Credit Facility from time to time other than any Obligor, each
counterparty to a Senior Interest Rate Agreement, the beneficiaries of each
indemnification obligation undertaken by the Company or any other Obligor under
any Senior Debt Document, and the successors and permitted assigns of each of
the foregoing.

 

“Senior Collateral” means all the “Senior
Collateral” as defined in any Senior Collateral Document and shall also include
the mortgaged properties described in the Senior Credit Facility and the
proceeds thereof.

 

“Senior Collateral Agent” means
Citicorp North America, Inc., in its capacity as senior collateral
processing agent under the Senior Collateral Documents, and its successors.

 

“Senior Collateral Documents” means
the Senior Mortgages, the Senior Subsidiary Security Agreement, the Senior
Subsidiary Guarantee Agreement, the Senior Indemnity, Subrogation and
Contribution Agreement, the Intercreditor Agreement and each of the mortgages,
security agreements and other instruments and documents executed and delivered
by any Subsidiary Guarantor pursuant to any of the foregoing or pursuant to the
Senior Credit Facility or any Additional Senior Debt Facility or for purposes
of providing collateral security or credit support for any Senior Bank
Obligation or Additional Senior Debt Obligation or obligation under the Senior
Subsidiary Guarantee Agreement (including, in each case, any schedules,
exhibits or annexes thereto), as the same may be amended, restated,
supplemented or otherwise modified from time to time.

 

“Senior Credit Facility” means the
Senior Credit Agreement dated as of June 27, 2001, as amended and restated
as of August 4, 2003, as amended and restated as of September 22,
2004, as amended and restated as of September 30, 2005, as amended and
restated as of November 8, 2006, as amended and restated as of June 4,
2007 (as may be further amended, modified, supplemented or Refinanced from time
to time), among the Company, the Lenders as defined therein from time to time
party thereto, Citicorp North America, Inc., as administrative agent and
collateral processing agent, Bank of 

 

31

 

America, N.A., as
syndication agent, and JPMorgan Chase Bank, N.A., Wells Fargo Foothill, LLC,
and General Electric Capital Corporation, as co-documentation agents.

 

“Senior Debt Documents” means (a) the
Senior Credit Facility, each “Loan Document” as defined in the Senior Credit
Facility, each Senior Interest Rate Agreement and the Senior Collateral
Documents and (b) any Additional Senior Debt Documents.

 

“Senior Facilities” means the Senior
Credit Facility and any Additional Senior Debt Facilities.

 

“Senior Indemnity, Subrogation and Contribution
Agreement” means the Senior Indemnity, Subrogation and Contribution
Agreement, dated as of June 27, 2001, as amended and restated as of May 28,
2003, as further amended and restated as of September 22, 2004, among the
Company, the Subsidiary Guarantors (including Subsidiary Guarantors becoming
party thereto after June 27, 2001) and the Senior Collateral Agent, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.

 

“Senior Lien” means the liens on the
Senior Collateral in favor of the Senior Bank Parties under the Senior
Collateral Documents.

 

“Senior Mortgages” means the
mortgages, deeds of trust, leasehold mortgages, assignments of leases and
rents, modifications and other security documents delivered pursuant to the
Senior Credit Facility.

 

“Senior Obligations” means the Senior
Bank Obligations and any Additional Senior Debt Obligations.

 

“Senior Secured Parties” means the
Senior Bank Parties and any Additional Senior Debt Parties.

 

“Senior Subsidiary Guarantee Agreement”
means the Senior Subsidiary Guarantee Agreement, made by the Subsidiary
Guarantors (including Subsidiary Guarantors that become parties thereto after June 27,
2001) in favor of the Senior Collateral Agent for the benefit of the Senior
Secured Parties, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

 

“Senior Subsidiary Security Agreement”
means the Senior Subsidiary Security Agreement, made by the Subsidiary
Guarantors (including Subsidiary Guarantors that become parties thereto after June 27,
2001) in favor of the Senior Collateral Agent for the benefit of the Senior
Secured Parties, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

 

“7.5% Notes due 2017” means the
Company’s 7.5% Senior Secured Notes due 2017, issued under the indenture dated
as of February 21, 2007, among the Company, the Subsidiary Guarantors, The
Bank of New York Trust Company, N.A., as trustee, and outstanding on the Issue
Date.

 

32

 

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

 

“Specified Collateral Disposition”
means any Collateral Disposition (other than a Collateral Disposition occurring
following the occurrence of a Triggering Event) in respect of which all or a
portion of the resulting proceeds are required by the terms of any Second
Priority Debt Obligations to be used or allocated to Repay such Second Priority
Debt Obligations.

 

“Standard Securitization Undertakings”
means representations, warranties, covenants and indemnities entered into by
the Company or any Subsidiary of the Company which are customary in an accounts
receivable securitization transaction involving a comparable company, including
those in the Receivables Facility as in effect on the Issue Date.

 

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

 

“Subordinated Obligation” means any
Debt of the Company or any Subsidiary Guarantor (whether outstanding on the
Issue Date or thereafter Incurred) that is subordinate or junior in right of
payment to the Securities or the applicable Subsidiary Guarantee pursuant to a
written agreement to that effect.

 

“Subsidiary” means, in respect of any
Person, any corporation, company (including any limited liability company),
association, partnership, joint venture or other business entity of which a
majority of the total voting power of the Voting Stock is at the time owned or
controlled, directly or indirectly, by:

 

(a) such
Person;

 

(b) such
Person and one or more Subsidiaries of such Person; or

 

(c) one
or more Subsidiaries of such Person.

 

“Subsidiary Guarantee” means a
Guarantee by a Subsidiary Guarantor of the Company’s obligations with respect
to the Securities pursuant to the Second Priority Subsidiary Guarantee
Agreement or otherwise on the terms set forth in this Indenture.

 

“Subsidiary Guarantor” means each
Subsidiary that is a party to the Second Priority Subsidiary Guarantee
Agreement as of the Issue Date and any other Person that Guarantees the
Securities pursuant to Section 4.09.

 

33

 

“Temporary Cash
Investments” means any of the following:

 

(a) Investments
in U.S. Government Obligations maturing within 365 days of the date of
acquisition thereof;

 

(b) Investments
in time deposit accounts, certificates of deposit, money market deposits
maturing within 90 days of the date of acquisition thereof issued by a bank or
trust company organized under the laws of the United States of America or any
state thereof having capital, surplus and undivided profits aggregating in
excess of $500 million and whose long-term debt is rated “A-3” or “A-” or
higher according to Moody’s or S&P (or such similar equivalent rating by at
least one “nationally recognized statistical rating organization” (as defined
in Rule 436 under the Securities Act));

 

(c) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (a) entered into with:

 

(1) a
bank meeting the qualifications described in clause (b) above; or

 

(2) any
primary government securities dealer reporting to the Market Reports Division
of the Federal Reserve Bank of New York;

 

(d) Investments
in commercial paper, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America with
a rating at the time as of which any Investment therein is made of “P-1” (or
higher) according to Moody’s or “A-1” (or higher) according to S&P (or such
similar equivalent rating by at least one “nationally recognized statistical
rating organization” (as defined in Rule 436 under the Securities Act));

 

(e) direct
obligations (or certificates representing an ownership interest in such
obligations) of any state of the United States of America (including any agency
or instrumentality thereof) for the payment of which the full faith and credit
of such state is pledged and which are not callable or redeemable at the issuer’s
option, provided that:

 

(1) the
long-term debt of such state is rated “A-3” or “A-” or higher according to
Moody’s or S&P (or such similar equivalent rating by at least one “nationally
recognized statistical rating organization” (as defined in Rule 436 under
the Securities Act)); and

 

(2) such
obligations mature within 180 days of the date of acquisition thereof; and

 

(f) money
market funds at least 95% of the assets of which constitute Temporary Cash
Equivalents of the kinds described in clauses (a) through (e) of this
definition.

 

34

 

“Total Assets” means the total assets
of the Company and the Restricted Subsidiaries on a consolidated basis
determined in accordance with GAAP as shown on the most recent consolidated
balance sheet of the Company.

 

“Triggering Event” at any time has the
meaning set forth in the Intercreditor Agreement.

 

“Trust Indenture Act” or “TIA”
means the Trust Indenture Act of 1939 as in force at the date as of which this
Indenture was executed, except as provided in Section 9.03; provided,
however, that in the event the Trust Indenture Act of 1939 is amended
after such date, “Trust Indenture Act” means, to the extent required by any
such amendment, the Trust Indenture Act of 1939 as so amended.

 

“Trustee” means the Person named as
the “Trustee” in the first paragraph of this Indenture until a successor
Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean such successor Trustee.

 

“Trust Officer” means any officer
within the Corporate Trust department of the Trustee (or any successor group of
the Trustee) with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

 

“Uniform Commercial Code” means the
New York Uniform Commercial Code as in effect from time to time.

 

“Unrestricted Subsidiary”
means:

 

(a) any
Subsidiary of the Company that is designated after the Issue Date as an
Unrestricted Subsidiary as permitted or required pursuant to Section 4.11
and is not thereafter redesignated as a Restricted Subsidiary as permitted
pursuant thereto; and

 

(b) any
Subsidiary of an Unrestricted Subsidiary.

 

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

 

“Voting Stock” of any Person means all
classes of Capital Stock or other interests (including partnership interests)
of such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof.

 

35

 

“Wholly Owned Restricted Subsidiary”
means, at any time, a Restricted Subsidiary all the Voting Stock of which
(except directors’ qualifying shares) is at such time owned, directly or
indirectly, by the Company and its other Wholly Owned Subsidiaries.

 

SECTION 1.02.  Other Definitions.

 

	
  Term

  	
   

  	
  Defined in 

  Section

  	
   

  
	
  “Affiliate
  Transaction” 

  	
   

  	
  4.08

  	
   

  
	
  “Asset
  Sales Prepayment Offer”

  	
   

  	
  4.06

  	
   

  
	
  “Bankruptcy
  Law”

  	
   

  	
  6.01

  	
   

  
	
  “Change
  of Control Offer”

  	
   

  	
  4.13

  	
   

  
	
  “Change
  of Control Payment Date”

  	
   

  	
  4.13

  	
   

  
	
  “Change
  of Control Purchase Price”

  	
   

  	
  4.13

  	
   

  
	
  “covenant
  defeasance option”

  	
   

  	
  8.01

  	
   

  
	
  “Custodian”

  	
   

  	
  6.01

  	
   

  
	
  “Global
  Security”

  	
   

  	
  Appendix A

  	
   

  
	
  “legal
  defeasance option”

  	
   

  	
  8.01

  	
   

  
	
  “Legal
  Holiday”

  	
   

  	
  10.08

  	
   

  
	
  “Offer
  Amount”

  	
   

  	
  4.06

  	
   

  
	
  “Offer
  Period”

  	
   

  	
  4.06

  	
   

  
	
  “OID”

  	
   

  	
  2.01

  	
   

  
	
  “Original
  Securities”

  	
   

  	
  2.01

  	
   

  
	
  “Paying
  Agent”

  	
   

  	
  2.04

  	
   

  
	
  “Registrar”

  	
   

  	
  2.04

  	
   

  
	
  “Reversion
  Date”

  	
   

  	
  4.15(b)

  	
   

  
	
  “Securities
  Custodian”

  	
   

  	
  Appendix A

  	
   

  
	
  “Shelf
  Registration statement

  	
   

  	
  Appendix A

  	
   

  
	
  “Surviving
  Person”

  	
   

  	
  5.01

  	
   

  
	
  “Suspension
  Period”

  	
   

  	
  4.15(b)

  	
   

  

 

SECTION 1.03.  Incorporation by Reference of Trust
Indenture Act.  This Indenture is
subject to the mandatory provisions of the TIA, which are incorporated by
reference in and made a part of this Indenture. 
The following TIA terms have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities.

 

36

 

“indenture security holder” means a Holder.

 

“indenture to be qualified” means this
Indenture.

 

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

 

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

 

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

 

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) “including”
means including without limitation;

 

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

 

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

 

(7) the
principal amount of any noninterest bearing or other discount security at any
date shall be the principal amount thereof that would be shown on a balance
sheet of the issuer dated such date prepared in accordance with GAAP; and

 

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

 

ARTICLE II

The Securities

 

SECTION 2.01.  Amount of Securities; Issuable in Series.  The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is
unlimited.  All Securities shall be
identical in all respects other than issue 

 

37

 

prices and issuance dates.  The Securities may be issued in one or more
series; provided, however, that any Securities issued with
original issue discount (“OID”) for Federal income tax purposes shall not be
issued as part of the same series as any Securities that are issued with a
different amount of OID or are not issued with OID.  All Securities of any one series shall be
substantially identical except as to denomination.

 

Subject to Section 2.03, the Trustee
shall authenticate Securities for original issue on the Issue Date in the
aggregate principal amount of $                (the “Original Securities”).  With respect to any Securities issued after
the Issue Date (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, Original
Securities pursuant to Section 2.07, 2.08, 2.09 or 3.06), there shall be
established in or pursuant to a Board Resolution, and subject to Section 2.03,
set forth, or determined in the manner provided in an Officers’ Certificate, or
established in one or more indentures supplemental hereto, prior to the
issuance of such Securities:

 

(1) whether
such Securities shall be issued as part of a new or existing series of
Securities and, if issued as part of a new series, the title of such Securities
(which shall distinguish the Securities of the series from Securities of any
other series);

 

(2) the
aggregate principal amount of such Securities to be authenticated and delivered
under this Indenture, which may be issued for an unlimited aggregate principal
amount (except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the same
series pursuant to Section 2.07, 2.08, 2.09 or 3.06 and except for
Securities which, pursuant to Section 2.03, are deemed never to have been
authenticated and delivered hereunder);

 

(3) the
issue price and issuance date of such Securities, including the date from which
interest payable with respect to such Securities shall accrue; and

 

(4) if
applicable, that such Securities shall be issuable in whole or in part in the
form of one or more Global Securities and, in such case, the respective
depositories for such Global Securities; the form of any legend or legends that
shall be borne by any such Global Security in addition to or in lieu of that
set forth in Exhibit 1 and any circumstances in which any such Global
Security may be exchanged in whole or in part for Securities registered; and
any transfer of such Global Security in whole or in part may be registered in
the name or names of Persons other than the depository for such Global Security
or a nominee thereof.

 

SECTION 2.02.  Form and Dating.  The Securities of each series and the Trustee’s
certificate of authentication shall be substantially in the form of Exhibit 1
which is hereby incorporated in and expressly made a part of this
Indenture.  The Securities of each series
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage, provided
that any such notation, legend or endorsement is in a form reasonably 

 

38

 

acceptable to the Company.  Each Security shall be dated the date of its
authentication.  The terms of the
Securities of each series set forth in Exhibit 1 are part of the terms of
this Indenture.

 

SECTION 2.03.  Execution and Authentication.  An Officer (and for purposes of this Section 2.03,
the term Officer shall include any Vice President of the Company authorized by
the Board of Directors) shall sign the Securities for the Company by manual or
facsimile signature.

 

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

 

At any time and from time to time after the
execution and delivery of this Indenture, the Company may deliver Securities of
any series executed by the Company to the Trustee for authentication, together
with a written order of the Company in the form of an Officers’ Certificate for
the authentication and delivery of such Securities, and the Trustee in accordance
with such written order of the Company shall authenticate and deliver such
Securities.

 

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

 

The Trustee may appoint an authenticating
agent reasonably acceptable to the Company to authenticate the Securities.  Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so.  Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.

 

SECTION 2.04.  Registrar and Paying Agent.  The Company shall maintain an office or
agency in the city of New York where Securities may be presented for
registration of transfer or for exchange (the “Registrar”) and an office or
agency in the city of New York where Securities may be presented for payment
(the “Paying Agent”).  The Registrar
shall keep a register of the Securities and of their transfer and
exchange.  The Company may have one or
more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any
additional paying agent.

 

The Company shall enter into an appropriate
agency agreement with any Registrar, Paying Agent or co-registrar not a party
to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions
of this Indenture that relate to such agent. 
The Company shall notify the Trustee of the name and address of any such
agent.  If the Company fails to maintain
a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07.  The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar,
co-registrar or transfer agent.

 

39

 

The Company initially appoints the Trustee as
Registrar and Paying Agent in connection with the Securities.

 

SECTION 2.05.  Paying Agent To Hold Money in Trust.  Prior to each due date of the principal and
interest on any Security, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal and interest when so becoming due.  The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Holders or the Trustee all money held by the Paying
Agent for the payment of principal of or interest on the Securities and shall
notify the Trustee of any default by the Company in making any such
payment.  If the Company or a Wholly
Owned Subsidiary acts as Paying Agent, it shall segregate the money held by it
as Paying Agent and hold it as a separate trust fund.  The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent.  Upon
complying with this Section 2.05, the Paying Agent shall have no further
liability for the money delivered to the Trustee.

 

SECTION 2.06.  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 Company shall furnish to the Trustee, in
writing at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of Holders.

 

SECTION 2.07.  Replacement Securities.  If a mutilated Security is surrendered to the
Registrar or if the Holder of a Security claims that such Security has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security if the requirements of Section 8-405
of the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee. 
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced.  The Company and the Trustee
may charge the Holder for their expenses in replacing a Security.

 

Every replacement Security is an additional
obligation of the Company.

 

SECTION 2.08.  Outstanding Securities.  Securities outstanding at any time are all
Securities authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section 2.08
as not outstanding.  A Security does not
cease to be outstanding because the Company or an Affiliate of the Company
holds the Security.

 

If a Security is replaced pursuant to Section 2.07,
it ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser.

 

40

 

If the Paying Agent segregates and holds in
trust, in accordance with this Indenture, on a redemption date or maturity date
money sufficient to pay all principal and interest payable on that date with
respect to the Securities (or portions thereof) to be redeemed or maturing, as the
case may be, then on and after that date such Securities (or portions thereof)
cease to be outstanding and interest on them ceases to accrue.

 

SECTION 2.09.  Temporary Securities.  Until definitive Securities are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Securities.  Temporary Securities shall
be substantially in the form of definitive Securities but may have variations
that the Company considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Securities and deliver
them in exchange for temporary Securities.

 

SECTION 2.10.  Cancellation.  The Company at any time may deliver
Securities to the Trustee for cancellation. 
The Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment.  The Trustee and no one else
shall cancel and dispose of (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancellation and deliver a certificate of such disposal to
the Company upon its request therefor unless the Company directs the Trustee to
deliver canceled Securities to the Company. 
The Company may not issue new Securities to replace Securities it has
redeemed, paid or delivered to the Trustee for cancellation.

 

SECTION 2.11.  Defaulted Interest.  If the Company defaults in a payment of
interest on the Securities, the Company shall pay the defaulted interest (plus
interest payable with respect to such defaulted interest to the extent lawful)
in any lawful manner.  The Company may
pay the defaulted interest to the persons who are Holders on a subsequent
special record date.  The Company shall
fix or cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each Holder a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.

 

SECTION 2.12.  CUSIP Numbers.  The Company in issuing the Securities may use
“CUSIP” numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP”
numbers in notices of redemption as a convenience to Holders; provided, however,
that neither the Company nor the Trustee shall have any responsibility for any
defect in the “CUSIP” number that appears on any Security, check, advice of
payment or redemption notice, and any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Securities,
and any such redemption shall not be affected by any defect in or omission of
such numbers.

 

41

 

ARTICLE III

Redemption

 

SECTION 3.01.  Notices to Trustee.  If the Company elects to redeem Securities
pursuant to paragraph 5 of the Securities, it shall notify the Trustee in
writing of the redemption date, the principal amount of Securities to be
redeemed and that such redemption is being made pursuant to such
paragraph 5 of the Securities.

 

The Company shall give each notice to the
Trustee provided for in this Section 3.01 at least 45 days before the
redemption date unless the Trustee consents to a shorter period.  Such notice shall be accompanied by an
Officers’ Certificate from the Company to the effect that such redemption will
comply with the conditions herein.

 

SECTION 3.02.  Selection of Securities To Be Redeemed.  If fewer than all the Securities are to be
redeemed pursuant to paragraph 5 of the Securities, the Trustee shall select
the Securities to be redeemed pro rata or by lot or by a method that complies
with applicable legal and securities exchange requirements, if any, and that
the Trustee considers fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar
circumstances.  The Trustee shall make
the selection from outstanding Securities not previously called for
redemption.  The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000.  Securities and
portions of them the Trustee selects shall be in amounts of $1,000 or a whole
multiple of $1,000.  Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.  The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.

 

SECTION 3.03.  Notice of Redemption.  At least 30 days but not more than 60
days before a date for redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder’s registered address.

 

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

 

(1) the
redemption date;

 

(2) the
redemption price;

 

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

 

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

 

(5) if
fewer than all the outstanding Securities are to be redeemed, the
identification and principal amounts of the particular Securities to be
redeemed;

 

42

 

(6) that,
unless the Company defaults in making such redemption payment, interest on
Securities (or portion thereof) called for redemption ceases to accrue on and after
the redemption date, and the only remaining right of the Holders is to receive
payment of the redemption price upon surrender to the Paying Agent; and

 

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

 

At the Company’s request, the Trustee shall
give the notice of redemption in the Company’s name and at the Company’s
expense.  In such event, the Company
shall provide the Trustee with the information required by this Section 3.03
at least 40 days before the redemption date and at least five days prior
to the Trustee giving the notice of redemption.

 

SECTION 3.04.  Effect of Notice of Redemption.  Once notice of redemption is mailed,
Securities called for redemption become due and payable on the redemption date
and at the redemption price stated in the notice.  Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price stated in the notice, plus
accrued interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related interest payment date that is on or prior to the date of
redemption).  Failure to give notice or
any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.

 

SECTION 3.05.  Deposit of Redemption Price.  Prior to or on the redemption date, the
Company shall deposit with the Paying Agent (or, if the Company or a Wholly
Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest, if any (subject
to the right of Holders of record on the relevant record date to receive
interest due on the related interest payment date that is on or prior to the
date of redemption), on all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption that have been
delivered by the Company to the Trustee for cancellation.

 

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

 

ARTICLE IV

 

Covenants

 

SECTION 4.01.  Payment of Securities.  The Company shall promptly pay the principal
of and interest on the Securities on the dates and in the manner provided in
the Securities and in this Indenture.  Principal
and interest shall be considered paid on the 

 

43

 

date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay
all principal and interest then due.

 

The Company shall pay interest on overdue
principal at the rate per annum specified therefor in the Securities, and it
shall pay interest on overdue installments of interest at the rate borne by the
Securities, to the extent lawful.

 

SECTION 4.02.  SEC Reports.  Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the Commission and provide the
Trustee with such annual and quarterly reports and such information, documents
and other reports as are specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections,
such information, documents and reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections; provided, however, that the Company shall not be
so obligated to file such information, documents and reports with the
Commission if the Commission does not permit such filings; provided  further,
however, that the Company shall be required also to provide to Holders
any such information, documents or reports that are not so filed. The Company
shall also comply with the other provisions of TIA § 314(a). Notwithstanding
anything herein to the contrary, the Company will not be deemed to have failed
to comply with any of its obligations hereunder for purposes of clause (d) of
Section 6.01 until 120 days after the date any report hereunder is
due.  Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the Trustee’s
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

SECTION 4.03.  Limitation on Debt.  The Company shall not, and shall not permit
any Restricted Subsidiary to, Incur, directly or indirectly, any Debt unless,
after giving effect to the application of the proceeds thereof, no Default or
Event of Default would occur as a consequence of such Incurrence and no Default
or Event of Default would be continuing following such Incurrence and
application of proceeds and either:

 

(1) such
Debt is Debt of the Company or a Subsidiary Guarantor and after giving effect
to the Incurrence of such Debt and the application of the proceeds thereof, the
Consolidated Interest Coverage Ratio would be greater than 2.00 to 1.00; or

 

(2) such
Debt is Permitted Debt.

 

The term “Permitted Debt” is defined
to include the following:

 

(a) the
Securities issued on the Issue Date and Debt of Subsidiary Guarantors,
including any future Guarantor, evidenced by guarantees relating to the
Securities issued on the Issue Date;

 

44

 

(b) Debt
of the Company or a Subsidiary Guarantor (including Guarantees thereof) (1) under
any Credit Facilities, (2) Incurred pursuant to a Real Estate Financing
Transaction, a Sale and Leaseback Transaction or an Equipment Financing
Transaction, (3) Incurred in respect of Capital Lease Obligations, (4) Incurred
pursuant to Debt Issuances or (5) Incurred by a Receivables Entity,
whether or not a Subsidiary Guarantor, in a Qualified Receivables Transaction
that is not recourse to the Company or any other Restricted Subsidiary (except
for Standard Securitization Undertakings), provided that the aggregate
principal amount of all such Debt in clauses (1) through (5) hereof
at any one time outstanding shall not exceed the greater of (A) $3,500
million, which amount shall be permanently reduced by the amount of Net
Available Cash used to Repay Debt under the Credit Facilities, and not
subsequently reinvested in Additional Assets or used to purchase Securities or
Repay other Debt, pursuant to Section 4.06 and (B) the sum of the
amount equal to (i) 60% of the book value of the inventory (determined
using the first-in-first-out method of accounting) of the Company and the
Restricted Subsidiaries and (ii) 85% of the book value of the accounts
receivables of the Company and the Restricted Subsidiaries, including any
Receivables Entity that is a Restricted Subsidiary;

 

(c) [Intentionally
omitted];

 

(d) Debt
of the Company outstanding on the Issue Date and evidenced by the 7.5% Notes
due 2017 and of Subsidiary Guarantors, including any future Guarantor,
evidenced by guarantees relating to the 7.5% Notes due 2017;

 

(e) Debt
Incurred after the Issue Date in respect of Purchase Money Debt, provided
that the aggregate principal amount of such Debt does not exceed 80% of the
Fair Market Value (on the date of the Incurrence thereof) of the Property
acquired, constructed, developed or leased, including additions and improvements
thereto;

 

(f) Debt
of the Company owing to and held by any consolidated Restricted Subsidiary and
Debt of a Restricted Subsidiary owing to and held by the Company or any
consolidated Restricted Subsidiary; provided, however, that any
subsequent issue or transfer of Capital Stock or other event that results in
any such consolidated Restricted Subsidiary ceasing to be a consolidated
Restricted Subsidiary or any subsequent transfer of any such Debt (except to
the Company or a consolidated Restricted Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Debt by the issuer thereof;

 

(g) Debt
under Interest Rate Agreements entered into by the Company or a Restricted
Subsidiary for the purpose of limiting interest rate risk of the financial
management of the Company or such Restricted Subsidiary and not for speculative
purposes, provided that the obligations under such agreements are
directly related to payment obligations on Debt otherwise permitted by the
terms of this Section 4.03;

 

45

 

(h) Debt
under Currency Exchange Protection
Agreements entered into by the Company or a Restricted Subsidiary for
the purpose of limiting currency exchange rate risks directly related to
transactions entered into by the Company or such Restricted Subsidiary and not
for speculative purposes;

 

(i) Debt
under Commodity Price Protection Agreements entered into by the Company or a
Restricted Subsidiary in the financial management of the Company or that Restricted
Subsidiary and not for speculative purposes;

 

(j) Debt
in connection with one or more standby letters of credit, banker’s acceptance,
performance or surety bonds or completion guarantees issued by the Company or a
Restricted Subsidiary or pursuant to self-insurance obligations and not in
connection with the borrowing of money or the obtaining of advances or credit;

 

(k) Debt
outstanding on the Issue Date not otherwise described in clauses (a) through
(j) above or clause (q) below;

 

(l) other
Debt of the Company or a Subsidiary Guarantor (including Guarantees thereof) in
an aggregate principal amount outstanding at any one time not to exceed $600
million;

 

(m) Debt
of a Restricted Subsidiary outstanding on the date on which that Restricted
Subsidiary was acquired by the Company or otherwise became a Restricted
Subsidiary (other than Debt Incurred as consideration in, or to provide all or
any portion of the funds or credit support utilized to consummate, the
transaction or series of transactions pursuant to which that Restricted
Subsidiary became a Subsidiary of the Company or was otherwise acquired by the
Company), provided that at the time that Restricted Subsidiary was
acquired by the Company or otherwise became a Restricted Subsidiary and after
giving effect to the Incurrence of that Debt, the Company would have been able
to Incur $1.00 of additional Debt pursuant to clause (1) of the first
paragraph of this Section 4.03;

 

(n) Debt
arising from the honoring by a bank or other financial institution of a check
or draft or other similar instrument inadvertently drawn against insufficient
funds, provided that such Debt is extinguished within five Business Days
of its Incurrence;

 

(o) endorsements
of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business;

 

(p) [Intentionally
omitted];

 

(q) Debt
in respect of Sale and Leaseback Transactions or Real Estate Financing
Transactions involving only real property (and the related personal property)
owned by the Company or a Subsidiary Guarantor on or after the Issue Date in an
aggregate principal amount outstanding at any one time not to exceed 

 

46

 

$150.0 million, provided
that such Sale and Leaseback Transactions or Real Estate Financing Transactions
may involve Property other than real property (and the related personal
property) owned on or after the Issue Date to the extent the portion of the
Debt related to such Property is permitted by another provision of this Section 4.03
at the time of Incurrence;

 

(r) Debt
in respect of Sale and Leaseback Transactions that are not Capital Lease
Obligations Incurred to finance the acquisition, construction and development
of Property after the Issue Date, including additions and improvements thereto,
provided that any reclassification of such Debt as a Capital Lease
Obligation shall be deemed an Incurrence of such Debt;

 

(s) Permitted
Refinancing Debt Incurred in respect of Debt Incurred pursuant to clause (1) of
the first paragraph of this Section 4.03 and clauses (a), (d), (e),
(k), (m) and (q) above; and

 

(t) Debt
arising from agreements of the Company or any Restricted Subsidiary providing
for indemnification, adjustment of purchase price or similar obligations, in
each case, Incurred or assumed in connection with the disposition of any
business, assets or a Subsidiary, other than Guarantees of Debt incurred by any
Person acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition; provided, however,
that (1) such Debt is not reflected on the balance sheet of the Company or
any Restricted Subsidiary (contingent obligations referred to in a footnote or
footnotes to financial statements and not otherwise reflected on the balance
sheet will not be deemed to be reflected on such balance sheet for purposes of
this clause (1)) and (2) the maximum assumable liability in respect
of such Debt will at no time exceed the gross proceeds including non-cash
proceeds (the fair market value of such non-cash proceeds being measured at the
time received and without giving effect to any subsequent changes in value)
actually received by the Company or such Restricted Subsidiary in connection
with such disposition.

 

Notwithstanding anything to the contrary
contained in this Section 4.03, the Company shall not permit any
Restricted Subsidiary that is not a Subsidiary Guarantor to Incur any Debt
pursuant to this Section 4.03 if the proceeds thereof are used, directly
or indirectly, to Refinance any Debt of the Company or any Subsidiary
Guarantor.  In addition, the Company
shall not, and shall not permit any Subsidiary Guarantor to, Incur, directly or
indirectly, any Senior Obligation that is subordinate or junior in right of
payment (without regard to any security interest) to any other Debt of the
Company or any Subsidiary Guarantor.

 

For purposes of determining compliance with
this Section 4.03, (1) in the event that an item of Debt meets the
criteria of more than one of the types of Debt described herein, the Company,
in its sole discretion, will classify such item of Debt at the time of
Incurrence and only be required to include the amount and type of such Debt in
one of the above clauses, (2) the Company will be entitled at the time of
such Incurrence to divide and classify an item of Debt in more than one of the
types of Debt 

 

47

 

described herein and (3) with
respect to Debt permitted under clause (k) of this Section 4.03 in
respect of Sale and Leaseback Transactions that are not Capital Lease
Obligations on the Issue Date, any reclassification of such Debt as a Capital
Lease Obligation shall not be deemed an Incurrence of such Debt; provided,
however, that (A) $205 million of the Securities will be deemed to
have been Incurred pursuant to clause (b) of the second paragraph of this Section 4.03
and any Permitted Refinancing Debt in respect of such portion of the Securities
that is Secured Debt will be deemed to be Incurred pursuant to either clause (b) or
(l) of the second paragraph of this Section 4.03, (B) all
outstanding Debt evidenced by the 8.125% Notes will be deemed to have been
Incurred pursuant to clause (b) of the second paragraph of this Section 4.03,
(C) all outstanding Debt evidenced by the Receivables Facility will be
deemed to have been Incurred pursuant to clause (b) of the second
paragraph of this Section 4.03, (D) [intentionally omitted], (E) all
outstanding Debt under the Senior Credit Facility immediately following the
Issue Date will be deemed to have been Incurred pursuant to clause (b) of
the second paragraph of this Section 4.03, (F) any Permitted Debt
that is not Secured Debt may later be reclassified as having been Incurred
pursuant to clause (1) of the first paragraph of this Section 4.03,
to the extent such Debt could be Incurred pursuant to such clause at the time
of such reclassification, and (G) any Permitted Debt may later be
reclassified as having been Incurred pursuant to any other clause in the
definition of Permitted Debt to the extent such Debt could be Incurred pursuant
to such clause at the time of such reclassification.

 

SECTION 4.04.  Limitation on Restricted Payments.  The Company shall not make, and shall not
permit any Restricted Subsidiary to make, directly or indirectly, any
Restricted Payment if at the time of, and after giving effect to, such proposed
Restricted Payment:

 

(a) a
Default or Event of Default shall have occurred and be continuing;

 

(b) the
Company could not Incur at least $1.00 of additional Debt pursuant to clause (1) of
the first paragraph of Section 4.03; or

 

(c) the
aggregate amount of such Restricted Payment and all other Restricted Payments
declared or made since February 12, 2003 (the amount of any Restricted
Payment, if made other than in cash, to be based upon Fair Market Value) would
exceed an amount equal to the sum of:

 

(1) 50%
of the aggregate amount of Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the first fiscal
quarter that commenced after February 12, 2003 to the end of the most
recent fiscal quarter for which financial statements have been filed with the
Commission (or, if the aggregate amount of Consolidated Net Income for such
period shall be a deficit, minus 100% of such deficit); plus

 

(2) 100%
of Capital Stock Sale Proceeds; plus

 

(3) the
sum of:

 

48

 

(A) 
the aggregate net cash proceeds received by the Company or any Restricted
Subsidiary from the issuance or sale after February 12, 2003 of
convertible or exchangeable Debt that has been converted into or exchanged for
Capital Stock (other than Disqualified Stock) of the Company; and

 

(B) the
aggregate amount by which Debt (other than Subordinated Obligations) of the
Company or any Restricted Subsidiary is reduced on the Company’s consolidated
balance sheet after February 12, 2003 upon the conversion or exchange of
any Debt (other than convertible or exchangeable debt issued or sold after February 12,
2003) for Capital Stock (other than Disqualified Stock) of the Company;

 

excluding, in the case of clause (A) or
(B):

 

(x) any such Debt issued or sold to the
Company or a Subsidiary of the Company or an employee stock ownership plan or
trust established by the Company or any such Subsidiary for the benefit of
their employees; and

 

(y) the aggregate amount of any cash or
other Property distributed by the Company or any Restricted Subsidiary upon any
such conversion or exchange;

 

plus

 

(4) an
amount equal to the sum of:

 

(A) the
net reduction in Investments in any Person other than the Company or a
Restricted Subsidiary resulting from dividends, repayments of loans or advances
or other transfers of Property made after February 12, 2003, in each case
to the Company or any Restricted Subsidiary from such Person less the cost of
the disposition of such Investments; and

 

(B) the
portion (proportionate to the Company’s equity interest in such Unrestricted
Subsidiary) of the Fair Market Value of the net assets of an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary (provided that such designation occurs after February 12,
2003);

 

provided, however,
that the foregoing sum shall not exceed, in the case of any Person, the amount
of Investments previously made (and treated as a Restricted Payment) by the
Company or any Restricted Subsidiary in such Person.

 

Notwithstanding the foregoing limitation, the
Company may:

 

49

 

(a) pay
dividends on its Capital Stock within 60 days of the declaration thereof if, on
said declaration date, such dividends could have been paid in compliance with
this Indenture; provided, however, that at the time of such
payment of such dividend, no other Default or Event of Default shall have
occurred and be continuing (or result therefrom); provided further, however,
that, if declared on or after February 12, 2003, such dividend shall be
included in the calculation of the amount of Restricted Payments;

 

(b) purchase,
repurchase, redeem, legally defease, acquire or retire for value Capital Stock
of the Company or Subordinated Obligations on or after February 12, 2003
in exchange for, or out of the proceeds of the substantially concurrent sale
of, Capital Stock of the Company (other than Disqualified Stock and other than
Capital Stock issued or sold to a Subsidiary of the Company or an employee
stock ownership plan or trust established by the Company or any such Subsidiary
for the benefit of their employees); provided, however, that:

 

(1) such
purchase, repurchase, redemption, legal defeasance, acquisition or retirement
shall be excluded in the calculation of the amount of Restricted Payments; and

 

(2) the
Capital Stock Sale Proceeds from such exchange or sale shall be excluded from
the calculation pursuant to clause (c)(2) above;

 

(c) purchase,
repurchase, redeem, legally defease, acquire or retire for value any
Subordinated Obligations on or after February 12, 2003 in exchange for, or
out of the proceeds of the substantially concurrent sale of, Permitted
Refinancing Debt; provided, however, that such purchase,
repurchase, redemption, legal defeasance, acquisition or retirement shall be
excluded in the calculation of the amount of Restricted Payments;

 

(d) [intentionally
omitted];

 

(e) so
long as no Default or Event of Default has occurred and is continuing the
repurchase or other acquisition on or after February 12, 2003 of shares
of, or options to purchase shares of, Capital Stock of the Company or any of
its Subsidiaries from employees, former employees, directors or former
directors of the Company or any of its Subsidiaries (or permitted transferees
of such employees, former employees, directors or former directors), pursuant
to the terms of the agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors under which such
individuals purchase or sell or are granted the option to purchase or sell,
shares of such Capital Stock; provided, however, that the
aggregate amount of such repurchases and other acquisitions shall not exceed
$15.0 million; provided further, however, that such
repurchases and other acquisitions shall be included in the calculation of the
amount of Restricted Payments;

 

50

 

(f) make
payments not to exceed $2.5 million in the aggregate to enable the Company to
make payments to holders of its Capital Stock in lieu of the issuance of
fractional shares of its Capital Stock on or after February 12, 2003; provided,
however, that such payments shall be included in the calculation of the
amount of Restricted Payments; and

 

(g) make
any other Restricted Payments on or after February 12, 2003 not to exceed
an aggregate amount of $40.0 million; provided, however, that
such payments shall be included in the calculation of the amount of Restricted
Payments.

 

SECTION 4.05.  Limitation on Liens.  The Company shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, Incur or suffer to exist,
any Lien (other than Permitted Liens) upon any of its Property (including
Capital Stock of a Restricted Subsidiary), whether owned on the Issue Date or
thereafter acquired, or any interest therein or any income or profits
therefrom.  If the Company or any
Subsidiary Guarantor creates any additional Lien upon any Property to secure
any Secured Obligations, it must concurrently grant a second priority Lien
(subject to Permitted Liens) upon such Property as security for the Securities
or Subsidiary Guarantees of the Securities such that the Property subject to
such Lien becomes Second Priority Collateral subject to the Second Priority
Liens, except to the extent such Property constitutes cash or cash
equivalents required to secure only letter of credit obligations under Credit
Facilities following a default under such Credit Facilities.

 

Notwithstanding anything in the preceding
paragraph, (1) the aggregate principal amount of Senior Obligations
constituting Debt and any other Debt secured by a Lien on the Collateral that
shares in the distribution of proceeds of Collateral prior to the Securities,
at any one time outstanding shall not exceed the sum of the aggregate amount of
Debt that at such time may be outstanding at any one time under clause (b) of
Section 4.03 and $200 million; and (2) the Company shall not,
and shall not permit any of its Subsidiaries to, create or suffer to exist any
Lien upon any of the Collateral (including Collateral consisting of Capital
Stock or Debt of any Subsidiary of the Company) now owned or hereafter acquired
by it securing any Public Debt unless the holders of such Public Debt share in
the distribution of proceeds from the foreclosure on Collateral either (A) on
an equal and ratable basis with the holders of the Senior Obligations or (B) on
an equal and ratable basis with the Holders (and any other obligations that
share on an equal and ratable basis with the Holders).

 

SECTION 4.06.  Limitation on Asset Sales and Specified
Collateral Dispositions.  The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Sale unless:

 

(a) the
Company or such Restricted Subsidiary receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value of the Property subject
to such Asset Sale;

 

51

 

(b) at
least 75% of the consideration paid to the Company or such Restricted
Subsidiary in connection with such Asset Sale is in the form of Qualified Consideration;
and

 

(c) the
Company delivers an Officers’ Certificate to the Trustee certifying that such
Asset Sale complies with the foregoing clauses (a) and (b).

 

The Net Available Cash (or any portion
thereof) from Asset Sales and Specified Collateral Dispositions may be applied
by the Company or a Restricted Subsidiary, to the extent the Company or such
Restricted Subsidiary elects (or is required by the terms of any Debt):

 

(a) to
Repay the Secured Obligations or any other Debt of the Company or any Restricted
Subsidiary secured by a Lien on Property of the Company or any Restricted
Subsidiary of the Company (excluding, in any such case, any Debt owed to the
Company or an Affiliate of the Company); provided, however, that
to the extent the proceeds from a Specified Collateral Disposition will be
allocated pursuant to the terms of any other Second Priority Debt Obligations
to Repay or provide for the Repayment of such Second Priority Debt Obligations,
a pro rata portion of such proceeds must, to the extent not inconsistent with
the terms of such other Second Priority Debt Obligations, be allocated to Repay
the Securities pursuant to an Asset Sales Prepayment Offer and the full amount
of such allocated portion (1) will be deemed Excess Proceeds and (2) will,
upon such Asset Sales Prepayment Offer, be deemed Allocable Excess Proceeds; or

 

(b) to
reinvest in Additional Assets or Expansion Capital Expenditures (including by
means of an Investment in Additional Assets or Expansion Capital Expenditures
by a Restricted Subsidiary with Net Available Cash received by the Company or
another Restricted Subsidiary); provided, however, that (1) the
Net Available Cash (or any portion thereof) from Asset Sales from the Company
to any Subsidiary must be reinvested in Additional Assets or Expansion Capital
Expenditures of the Company and (2) if the assets that were the subject of
such Asset Sale constituted Collateral, then such Net Available Cash must be
reinvested in Additional Assets that are pledged at the time as Collateral to
secure the Securities or Subsidiary Guarantees of the Securities, subject to
the Collateral Documents, or in Expansion Capital Expenditures to improve
assets that constitute Collateral securing the Securities or Subsidiary
Guarantees of the Securities at the time.

 

Pending application of Net Available Cash
pursuant to this Section 4.06, which shall not be required in respect of
an Asset Sale that is not a Specified Collateral Disposition if the Net
Available Cash from such Asset Sale is less than $1 million, such Net Available
Cash shall be invested in Temporary Cash Investments or applied to temporarily
reduce revolving credit indebtedness.  If
the Net Available Cash from an Asset Sale that is not a Specified Collateral
Disposition equals or exceeds $1 million, any Net Available Cash from such
Asset Sale not applied in accordance with the preceding paragraph within 270
days from the date of the receipt of such Net Available Cash or that 

 

52

 

is not segregated from the
general funds of the Company for investment in identified Additional Assets in
respect of a project that shall have been commenced, and for which binding
contractual commitments have been entered into, prior to the end of such
270-day period and that shall not have been completed or abandoned shall
constitute “Excess Proceeds”; provided, however, that the
amount of any Net Available Cash that ceases to be so segregated as
contemplated above and any Net Available Cash that is segregated in respect of
a project that is abandoned or completed shall also constitute “Excess Proceeds”
at the time any such Net Available Cash ceases to be so segregated or at the
time the relevant project is so abandoned or completed, as applicable; provided
further, however, that the amount of any Net Available Cash that
continues to be segregated for investment and that is not actually reinvested
within 24 months from the date of the receipt of such Net Available Cash shall
also constitute “Excess Proceeds”.

 

When the aggregate amount of Excess Proceeds
exceeds $50.0 million (taking into account income earned on such Excess
Proceeds, if any), the Company will be required to make an offer to purchase
(the “Asset Sales Prepayment Offer”) the Securities which offer shall be in the
amount of the Allocable Excess Proceeds, on a pro rata basis according to
principal amount at maturity, at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
purchase date (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date), in
accordance with the procedures (including prorating in the event of
oversubscription) set forth herein.  To
the extent that any portion of the amount of Net Available Cash remains after
compliance with the preceding sentence and provided that all Holders have been
given the opportunity to tender their Securities for purchase in accordance
with this Indenture, the Company or such Restricted Subsidiary may use such
remaining amount for any purpose permitted by this Indenture and the amount of
Excess Proceeds will be reset to zero.

 

The term “Allocable Excess Proceeds”
will mean the product of:

 

(a) the
Excess Proceeds; and

 

(b) a
fraction,

 

(1) the
numerator of which is the aggregate principal amount of the Securities
outstanding on the date of the Asset Sales Prepayment Offer; and

 

(2) the
denominator of which is the sum of the aggregate principal amount of the
Securities outstanding on the date of the Asset Sales Prepayment Offer and the
aggregate principal amount of other Debt of the Company outstanding on the date
of the Asset Sales Prepayment Offer that is pari  passu in right
of payment with the Securities and subject to terms and conditions in respect
of Asset Sales similar in all material respects to this covenant and requiring
the Company to make an offer to purchase such Debt or otherwise repay such Debt
at substantially the same time as the Asset Sales Prepayment Offer.

 

53

 

Within five Business Days after the Company
is obligated to make an Asset Sales Prepayment Offer as described in the
preceding paragraph, the Company shall send a written notice, by first-class
mail, to the Holders, accompanied by such information regarding the Company and
its Subsidiaries as the Company in good faith believes will enable such Holders
to make an informed decision with respect to such Asset Sales Prepayment
Offer.  Such notice shall state, among
other things, the purchase price and the purchase date (the “Purchase Date”),
which shall be, subject to any contrary requirements of applicable law, a
Business Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed.

 

Not later than the date upon which written
notice of an Asset Sales Prepayment Offer is delivered to the Trustee as
provided above, the Company shall deliver to the Trustee an Officers’
Certificate as to (a) the amount of the Asset Sales Prepayment Offer (the “Offer
Amount”), (b) the allocation of the Net Available Cash from the Asset
Sales pursuant to which such Prepayment Offer is being made and (c) the
compliance of such allocation with the provisions of clause (b) of the
second paragraph of this Section 4.06. 
On or before the Purchase Date, the Company shall also irrevocably
deposit with the Trustee or with the Paying Agent (or, if the Company or a
Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust)
in Temporary Cash Investments (other than in those enumerated in such clause (b) of
the definition of Temporary Cash Investments), maturing on the last day prior
to the Purchase Date or on the Purchase Date if funds are immediately available
by open of business, an amount equal to the Offer Amount to be held for payment
in accordance with the provisions of this Section 4.06.  Upon the expiration of the period for which
the Prepayment Offer remains open (the “Offer Period”), the Company shall
deliver to the Trustee for cancellation the Securities or portions thereof that
have been properly tendered to and are to be accepted by the Company.  The Trustee or the Paying Agent shall, on the
Purchase Date, mail or deliver payment to each tendering Holder in the amount
of the purchase price.  In the event that
the aggregate purchase price of the Securities delivered by the Company to the
Trustee is less than the Offer Amount, the Trustee or the Paying Agent shall
deliver the excess to the Company immediately after the expiration of the Offer
Period for application in accordance with this Section 4.06.

 

Holders electing to have a Security purchased
shall be required to surrender the Security, with an appropriate form duly
completed, to the Company or its agent at the address specified in the notice
at least three Business Days prior to the Purchase Date.  Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day
prior to the Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security that
was delivered for purchase by the Holder and a statement that such Holder is
withdrawing its election to have such Security purchased.  If at the expiration of the Offer Period the
aggregate principal amount of Securities surrendered by Holders exceeds the
Offer Amount, the Company shall select the Securities to be purchased on a pro
rata basis for all Securities (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000,
or integral multiples thereof, shall be purchased).  Holders whose Securities are purchased 

 

54

 

only in part shall be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.

 

At the time the Company delivers Securities
to the Trustee that are to be accepted for purchase, the Company shall also
deliver an Officers’ Certificate stating that such Securities are to be
accepted by the Company pursuant to and in accordance with the terms of this Section 4.06.  A Security shall be deemed to have been
accepted for purchase at the time the Trustee or the Paying Agent mails or
delivers payment therefor to the surrendering Holder.

 

The Company will comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange
Act and any other securities laws or regulations in connection with the
repurchase of Securities pursuant to this Section 4.06.  To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.06,
the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section 4.06
by virtue thereof.

 

SECTION 4.07.  Limitation on Restrictions on
Distributions from Restricted Subsidiaries. 
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist any
consensual restriction on the right of any Restricted Subsidiary to:

 

(a) pay
dividends, in cash or otherwise, or make any other distributions on or in
respect of its Capital Stock, or pay any Debt or other obligation owed, to the
Company or any other Restricted Subsidiary;

 

(b) make
any loans or advances to the Company or any other Restricted Subsidiary; or

 

(c) transfer
any of its Property to the Company or any other Restricted Subsidiary.

 

The foregoing limitations will not apply:

 

(1) with
respect to clauses (a), (b) and (c), to restrictions:

 

(A) in
effect on the Issue Date;

 

(B) relating
to Debt of a Restricted Subsidiary and existing at the time it became a
Restricted Subsidiary if such restriction was not created in connection with or
in anticipation of the transaction or series of transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by
the Company;

 

(C) that
result from the Refinancing of Debt Incurred pursuant to an agreement referred
to in clause (1)(A) or (B) above or in clause (2)(A) or (B) below,
provided such restriction is no less favorable to 

 

55

 

the Holders in any material
respect, as reasonably determined by the Board of Directors (as evidenced by a
Board Resolution), than those under the agreement evidencing the Debt so
Refinanced;

 

(D) resulting
from the Incurrence of any Debt permitted pursuant to Section 4.03, provided
that (i) the restriction is no less favorable to the Holders in any
material respect, as reasonably determined by the Board of Directors (as
evidenced by a Board Resolution), than the restrictions of the same type
contained in this Indenture and (ii) the Board of Directors determines (as
evidenced by a Board Resolution) in good faith that such restrictions will not
impair the ability of the Company to make payments of principal and interest on
the Securities when due;

 

(E) existing
by reason of applicable law; or

 

(F) any
contractual requirements incurred with respect to Qualified Receivables
Transactions relating exclusively to a Receivables Entity that, in the good
faith determination of the Board of Directors, are customary for Qualified
Receivables Transactions; and

 

(2) with
respect to clause (c) only, to restrictions:

 

(A) relating
to Debt that is permitted to be Incurred and secured pursuant to
Sections 4.03 and 4.05 that limit the right of the debtor to dispose of
the Property securing such Debt;

 

(B) encumbering
Property at the time such Property was acquired by the Company or any
Restricted Subsidiary, so long as such restriction relates solely to the
Property so acquired and was not created in connection with or in anticipation
of such acquisition;

 

(C) resulting
from customary provisions restricting subletting or assignment of leases or
customary provisions in other agreements that restrict assignment of such
agreements or rights thereunder; or

 

(D) customary
restrictions contained in agreements relating to the sale or other disposition
of Property limiting the transfer of such Property pending the closing of such
sale.

 

SECTION 4.08.  Limitation on Transactions with Affiliates.  The Company shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, conduct any business or
enter into or suffer to exist any transaction or series of transactions
(including the purchase, sale, transfer, assignment, lease, conveyance or
exchange of any Property or the rendering of any service) with, or for the
benefit of, any Affiliate of the Company (an “Affiliate Transaction”), unless:

 

56

 

(a) the
terms of such Affiliate Transaction are:

 

(1) set
forth in writing;

 

(2) in
the best interest of the Company or such Restricted Subsidiary, as the case may
be; and

 

(3) no
less favorable to the Company or such Restricted Subsidiary, as the case may
be, than those that could be obtained in a comparable arm’s-length transaction
with a Person that is not an Affiliate of the Company;

 

(b) if
such Affiliate Transaction involves aggregate payments or value to the
Affiliate in excess of $25.0 million in any 12-month period, the Board of
Directors (including a majority of the disinterested members of the Board of
Directors) approves such Affiliate Transaction and, in its good faith judgment,
believes that such Affiliate Transaction complies with clauses (a)(2) and (3) of
this Section 4.08 as evidenced by a Board Resolution promptly delivered to
the Trustee; and

 

(c) if
such Affiliate Transaction involves aggregate payments or value to the
Affiliate in excess of $75.0 million in any 12-month period, the Company
obtains a written opinion from an Independent Financial Advisor to the effect
that the consideration to be paid or received in connection with such Affiliate
Transaction is fair, from a financial point of view, to the Company and the
Restricted Subsidiaries, taken as a whole.

 

Notwithstanding the foregoing limitation, the
Company or any Restricted Subsidiary may enter into or suffer to exist the
following:

 

(a) any
transaction or series of transactions between the Company and one or more
Restricted Subsidiaries or between two or more Restricted Subsidiaries, provided
that no more than 5% of the total voting power of the Voting Stock (on a fully
diluted basis) of any such Restricted Subsidiary is owned by an Affiliate of
the Company (other than a Restricted Subsidiary);

 

(b) any
Restricted Payment permitted to be made pursuant to Section 4.04 or any
Permitted Investment (other than pursuant to clauses (a)(3), (b), (g), (h),
(i), (k) or (l) of the definition of “Permitted Investment”);

 

(c) the
payment of compensation (including amounts paid pursuant to employee benefit
plans) for the personal services of and related indemnities provided to
officers, directors, consultants and employees of the Company or any of the
Restricted Subsidiaries, so long as the Board of Directors in good faith shall
have approved the terms thereof and deemed the services theretofore or
thereafter to be performed for such compensation to be fair consideration
therefor;

 

57

 

(d) loans
and advances to employees made in the ordinary course of business in accordance
with applicable law and consistent with the past practices of the Company or
such Restricted Subsidiary, as the case may be, provided that such loans
and advances do not exceed $25.0 million in the aggregate at any one time
outstanding;

 

(e) any
transaction effected as part of a Qualified Receivables Transaction or any
transaction involving the transfer of accounts receivable of the type specified
in the definition of “Credit Facilities” and permitted under clause (b) of
Section 4.03;

 

(f) payments
of customary fees by the Company or any of its Restricted Subsidiaries to
Leonard Green & Partners L.P. or any of its Affiliates made for any
corporate advisory services or financial advisory, financing, underwriting or
placement services or in respect of other investment banking activities
including, without limitation, in connection with acquisitions or divestitures,
which are approved by a majority of the Board of Directors in good faith;

 

(g) if
such Affiliate Transaction is with any Person solely in its capacity as a
holder of Debt or Capital Stock of the Company or any of its Restricted Subsidiaries,
where such Person is treated no more favorably than any other holder of such
Debt or Capital Stock of the Company or any of its Restricted Subsidiaries; and

 

(h) any
agreement as in effect on the Issue Date or any amendment thereto (so long as
such amendment is not disadvantageous to the Holders in any material respect)
or any transaction contemplated thereby.

 

SECTION 4.09.  Guarantees by Subsidiaries.  (a) The Company shall cause each
Subsidiary that becomes or is a Collateral Subsidiary Guarantor or an obligor
with respect to any of the Secured Obligations (except a Foreign Subsidiary
that becomes an obligor solely in respect of Debt or other obligations of
itself or another Foreign Subsidiary), in each case, to become a Subsidiary
Guarantor by becoming a party to this Indenture, the Second Priority Subsidiary
Guarantee Agreement and the Intercreditor Agreement, if such Subsidiary is not
already a Subsidiary Guarantor party thereto, and delivering evidence thereof
to the Trustee at the time such Person becomes a Collateral Subsidiary
Guarantor or such an obligor.

 

(b) The Company shall not permit any
Restricted Subsidiary that is not a Subsidiary Guarantor to Guarantee the
payment of any Debt or Capital Stock of the Company (other than Guarantees permitted
pursuant to clauses (j) or (o) of Section 4.03), except
that a Restricted Subsidiary that is not a Subsidiary Guarantor may Guarantee
Debt of the Company, provided that:

 

(1) such
Debt and the Debt represented by such Guarantee is permitted by Section 4.03;

 

58

 

(2) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Guarantee of payment of the
Securities by such Restricted Subsidiary and such Guarantee of Debt of the
Company:

 

(A) unless
such Debt is a Subordinated Obligation, shall be pari  passu (or subordinate) in right of
payment to and on substantially the same terms as (or less favorable to such
Debt than) such Restricted Subsidiary’s Guarantee with respect to the
Securities; and

 

(B) if
such Debt is a Subordinated Obligation, shall be subordinated in right of
payment to such Restricted Subsidiary’s Guarantee with respect to the
Securities to at least the same extent as such Debt is subordinated to the
Securities.

 

(c) Upon any Subsidiary becoming a
Subsidiary Guarantor as described above, such Subsidiary shall deliver to the
Trustee an Opinion of Counsel to the effect that:

 

(1) such
Guarantee of the Securities has been duly executed and authorized; and

 

(2) such
Guarantee of the Securities constitutes a valid, binding and enforceable
obligation of such Subsidiary, except insofar as enforcement thereof may be
limited by bankruptcy, insolvency or similar laws (including all laws relating
to fraudulent transfers) and except insofar as enforcement thereof is subject
to general principles of equity.

 

In addition, no Subsidiary Guarantor shall
Guarantee, directly or indirectly, (1) any Debt of the Company that is
subordinate or junior in right of payment (without regard to any security
interest) to any other Debt of the Company unless such Guarantee is expressly
subordinate in right of payment to the Subsidiary Guarantee of such Subsidiary
Guarantor or (2) any Debt of the Company other than Senior Obligations
unless such Guarantee is expressly subordinate in right of payment (without
regard to any security interest) to or ranks pari passu with, the Subsidiary Guarantee of such Subsidiary
Guarantor.

 

SECTION 4.10.  Limitation on Sale and Leaseback
Transactions.  The Company shall not,
and shall not permit any Restricted Subsidiary to, enter into any Sale and
Leaseback Transaction with respect to any Property unless:

 

(a) the
Company or such Restricted Subsidiary would be entitled to:

 

(1) Incur
Debt in an amount equal to the Attributable Debt with respect to such Sale and
Leaseback Transaction pursuant to Section 4.03; and

 

59

 

(2) create
a Lien on such Property securing such Attributable Debt without also securing
the Securities or the applicable Subsidiary Guarantee pursuant to Section 4.05;
and

 

(b) such
Sale and Leaseback Transaction is effected in compliance with Section 4.06,
provided that such Sale and Leaseback Transaction constitutes an Asset
Sale.

 

SECTION 4.11.  Designation of Restricted and Unrestricted
Subsidiaries.  The Board of Directors
may designate any Subsidiary of the Company to be an Unrestricted Subsidiary
if:

 

(a) the
Subsidiary to be so designated does not own any Capital Stock or Debt of, or
own or hold any Lien on any Property of, the Company or any other Restricted
Subsidiary and is not required to be a Subsidiary Guarantor pursuant to this
Indenture; and

 

(b) either:

 

(1) the
Subsidiary to be so designated has total assets of $1,000 or less; or

 

(2) such
designation is effective immediately upon such entity becoming a Subsidiary of
the Company.

 

Unless so designated as an Unrestricted
Subsidiary, any Person that becomes a Subsidiary of the Company will be
classified as a Restricted Subsidiary; provided, however, that
such Subsidiary shall not be designated a Restricted Subsidiary and shall be
automatically classified as an Unrestricted Subsidiary if either of the
requirements set forth in clauses (x) and (y) of the second
immediately following paragraph will not be satisfied after giving pro forma
effect to such classification as a Restricted Subsidiary or if such Person is a
Subsidiary of an Unrestricted Subsidiary.

 

Except as provided in the first sentence of
the preceding paragraph, no Restricted Subsidiary may be redesignated as an
Unrestricted Subsidiary.  In addition,
neither the Company nor any Restricted Subsidiary shall at any time be directly
or indirectly liable for any Debt that provides that the holder thereof may
(with the passage of time or notice or both) declare a default thereon or cause
the payment thereof to be accelerated or payable prior to its Stated Maturity
upon the occurrence of a default with respect to any Debt, Lien or other
obligation of any Unrestricted Subsidiary (including any right to take
enforcement action against such Unrestricted Subsidiary).

 

The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary if, immediately after
giving pro forma effect to such designation, (x) the Company could Incur
at least $1.00 of additional Debt pursuant to clause (1) of the first
paragraph of Section 4.03 and (y) no Default or Event of Default
shall have occurred and be continuing or would result therefrom.

 

60

 

Any such designation or redesignation by the
Board of Directors will be evidenced to the Trustee by filing with the Trustee
a Board Resolution giving effect to such designation or redesignation and an
Officers’ Certificate that:

 

(a) certifies
that such designation or redesignation complies with the foregoing provisions;
and

 

(b) gives
the effective date of such designation or redesignation,

 

such filing with the Trustee to occur within
45 days after the end of the fiscal quarter of the Company in which such
designation or redesignation is made (or, in the case of a designation or
redesignation made during the last fiscal quarter of the Company’s fiscal year,
within 90 days after the end of such fiscal year).

 

SECTION 4.12.  Additional Security Documents.  From and after the Issue Date, if the Company
or any Subsidiary of the Company executes and delivers in respect of any
Property of such Person any mortgages, deeds of trust, security agreements,
pledge agreements or similar instruments to secure Debt or other obligations
that at the time constitute Secured Obligations (except for a Foreign
Subsidiary that does so solely in respect of Debt or other obligations of
itself or another Foreign Subsidiary), then the Company shall, or shall cause
such Subsidiary to, execute and deliver substantially identical mortgages,
deeds of trust, security agreements, pledge agreements or similar instruments
in order to vest in the Second Priority Collateral Trustee a perfected second
priority security interest, subject only to Permitted Liens and the
Intercreditor Agreement, in such Property for the benefit of the Second
Priority Collateral Trustee on behalf of the holders of the Securities, among
others, and thereupon all provisions of this Indenture relating to the
Collateral will be deemed to relate to such Property to the same extent and
with the same force and effect.

 

SECTION 4.13.  Change of Control.  (a)  Upon the occurrence of a Change of
Control, each Holder shall have the right to require the Company to repurchase
all or any part of such Holder’s Securities pursuant to the offer described
below (the “Change of Control Offer”) at a purchase price (the “Change of
Control Purchase Price”) equal to 101.0% of the principal amount thereof, plus
accrued and unpaid interest, if any, to, but not including, the purchase date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date).  If the purchase date is on or after a record
date and on or before the relevant interest payment date, the accrued and
unpaid interest, if any, will be paid to the person or entity in whose name the
Security is registered at the close of business on that record date, and no
additional interest will be payable to Holders whose Securities shall be
subject to purchase.

 

(b) Within
30 days following any Change of Control, the Company shall (1) cause a
notice of the Change of Control Offer to be sent at least once to the Dow Jones
News Service or similar business news service in the United States and (2) send,
by first-class mail, with a copy to the Trustee, to each Holder, at such Holder’s
address appearing in the Security Register, a notice stating:  (A)

 

61

 

that a Change of Control
Offer is being made pursuant to this Section 4.13 and that all Securities
timely tendered will be accepted for payment; (B) the Change of Control
Purchase Price and the purchase date, which shall be, subject to any contrary
requirements of applicable law, a Business Day no earlier than 30 days nor
later than 60 days from the date such notice is mailed (the “Change of Control
Payment Date”); (C) the circumstances and relevant facts regarding the
Change of Control (including, to the extent reasonably practicable, information
with respect to pro forma historical income, cash flow and capitalization after
giving effect to the Change of Control); and (D) the procedures that
Holders must follow in order to tender their Securities (or portions thereof)
for payment and the procedures that Holders must follow in order to withdraw an
election to tender Securities (or portions thereof) for payment.

 

(c) Holders
electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Company or its agent
at the address specified in the notice at least three Business Days prior to
the Change of Control Payment Date. 
Holders shall be entitled to withdraw their election if the Trustee or
the Company receives not later than one Business Day prior to the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security that
was delivered for purchase by the Holder and a statement that such Holder is
withdrawing its election to have such Security purchased.

 

(d) On
or prior to the Change of Control Payment Date, the Company shall irrevocably
deposit with the Trustee or with the Paying Agent (or, if the Company or any of
its Wholly Owned Subsidiaries is acting as the Paying Agent, segregate and hold
in trust) in cash an amount equal to the Change of Control Purchase Price
payable to the Holders entitled thereto, to be held for payment in accordance
with the provisions of this Section 4.13. 
On the Change of Control Payment Date, the Company shall deliver to the
Trustee the Securities or portions thereof that have been properly tendered to
and are to be accepted by the Company for payment.  The Trustee or the Paying Agent shall, on the
Change of Control Payment Date, mail or deliver payment to each tendering
Holder of the Change of Control Purchase Price. 
In the event that the aggregate Change of Control Purchase Price is less
than the amount delivered by the Company to the Trustee or the Paying Agent,
the Trustee or the Paying Agent, as the case may be, shall deliver the excess
to the Company immediately after the Change of Control Payment Date.

 

(e) The
Company will comply, to the extent applicable, with the requirements of Section 14(e) of
the Exchange Act and any other securities laws or regulations in connection
with the purchase of Securities pursuant to this Section 4.13.  To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section 4.13,
the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section 4.13
by virtue thereof.

 

62

 

SECTION 4.14.  Further Instruments and Acts.  Upon request of the Trustee or as necessary,
the Company shall execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

 

SECTION 4.15.  Covenant Suspension.  (a)  During any period of time that:

 

(1) the Securities have Investment Grade Ratings from both Rating
Agencies and

 

(2) no Default or Event of Default has occurred and is continuing,

 

the Company and the Restricted
Subsidiaries will not be subject to the following Sections of this Indenture: Section 4.03,
Section 4.04, Section 4.06, Section 4.07, Section 4.08,
clauses (a)(1) and (b) of Section 4.10, clause (x) of
the fourth paragraph (and such clause (x) as referred to in the
second paragraph) of Section 4.11, and clause (a)(5) of Section 5.01
(collectively, the “Suspended Covenants”).

 

(b)           Solely for the
purpose of determining the amount of permitted Liens under Section 4.05
during any Suspension Period (as defined below) and without limiting the
Company’s or any Restricted Subsidiary’s ability to Incur Indebtedness during
any Suspension Period, to the extent that calculations in Section 4.05
refer to Section 4.03, such calculations shall be made as though Section 4.03
remains in effect during the Suspension Period. 
In the event that the Company and the Restricted Subsidiaries are not
subject to the Suspended Covenants for any period of time as a result of
paragraph (a) of this Section 4.15 and, on any subsequent date (the ‘‘Reversion
Date’’), one or both of the Rating Agencies withdraws its ratings or downgrades
the ratings assigned to the Securities below the required Investment Grade
Ratings or a Default or Event of Default occurs and is continuing, then the
Company and the Restricted Subsidiaries will thereafter again be subject to the
Suspended Covenants. The period of time between the Suspension Date and the
Reversion Date is referred to as the “Suspension Period.” Notwithstanding that
the Suspended Covenants may be reinstated, no Default will be deemed to have
occurred as a result of a failure to comply with the Suspended Covenants during
the Suspension Period. On the Reversion Date, all Debt Incurred during the
Suspension Period will be classified to have been Incurred pursuant to clause (1) of
the first paragraph or one of the clauses set forth in the second paragraph of Section 4.03
(to the extent such Debt would be permitted to be Incurred thereunder as of the
Reversion Date and after giving effect to Debt Incurred prior to the Suspension
Period and outstanding on the Reversion Date). 
To the extent such Debt would not be permitted to be Incurred pursuant
to clause (1) of the first paragraph or one of the clauses set forth in
the second paragraph of Section 4.03, such Debt will be deemed to have
been outstanding on the Issue Date, so that it is classified as permitted under
clause (k) of the second paragraph of Section 4.03.  Calculations made after the Reversion Date of
the amount available to be made as Restricted Payments under 

 

63

 

Section 4.04
will be made as though Section 4.04 had been in effect during the entire
period of time from February 12, 2003. 
Accordingly, Restricted Payments made during the Suspension Period will
reduce the amount available to be made as Restricted Payments under the first
paragraph of Section 4.04 following any Reversion Date, and the items
specified in clauses (c)(1) through (c)(4) of the first paragraph of Section 4.04
will increase the amount available to be made under the first paragraph thereof
following any Reversion Date. For purposes of determining compliance with the
first five paragraphs of Section 4.06, on the Reversion Date, the Net
Available Cash from all Asset Sales not applied in accordance with the covenant
will be deemed to be reset to zero.

 

ARTICLE V

 

Successor Company

 

SECTION 5.01.  When Company May Merge or Transfer
Assets.  (a)  The Company shall
not merge, consolidate or amalgamate with or into any other Person (other than
a merger of a Wholly Owned Restricted Subsidiary into the Company) or sell,
transfer, assign, lease, convey or otherwise dispose of all or substantially
all its Property in any one transaction or series of transactions unless:

 

(1) the Company will be the surviving Person (the “Surviving
Person”) or the Surviving Person (if other than the Company) formed by such
merger, consolidation or amalgamation or to which such sale, transfer,
assignment, lease, conveyance or disposition is made will be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia;

 

(2) the Surviving Person (if other than the Company) expressly
assumes, by supplemental indenture in form reasonably satisfactory to the
Trustee, executed and delivered to the Trustee by such Surviving Person, the
due and punctual payment of the principal of, and premium, if any, and interest
on, all the Securities, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this
Indenture to be performed by the Company;

 

(3) in the case of a sale, transfer, assignment, lease, conveyance
or other disposition of all or substantially all the Property of the Company,
such Property shall have been transferred as an entirety or virtually as an
entirety to one Person;

 

(4) immediately before and after giving effect to such transaction
or series of transactions on a pro forma basis (and treating, for purposes of
this clause (4) and clause (5) below, any Debt that becomes, or is
anticipated to become, an obligation of the Surviving Person or any Restricted
Subsidiary as a result of such transaction or series of transactions as having
been Incurred by the Surviving Person or such 

 

64

 

Restricted
Subsidiary at the time of such transaction or series of transactions), no
Default or Event of Default shall have occurred and be continuing;

 

(5) immediately after giving effect to such transaction or series
of transactions on a pro forma basis, either (A) the Company or the
Surviving Person, as the case may be, would be able to Incur at least $1.00 of
additional Debt under clause (1) of the first paragraph of Section 4.03
or (B) the Surviving Person would have a Consolidated Interest Coverage
Ratio which is not less than the Consolidated Interest Coverage Ratio of the
Company immediately prior to such transaction or series of transactions; and

 

(6) the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers’ Certificate and an Opinion of Counsel, each stating that such
transaction and the supplemental indenture, if any, in respect thereto comply
with this covenant and that all conditions precedent herein provided for
relating to such transaction have been satisfied.

 

(b) The Company shall not permit any Subsidiary Guarantor to
merge, consolidate or amalgamate with or into any other Person (other than a
merger of a Wholly Owned Restricted Subsidiary into such Subsidiary Guarantor,
or a merger of a Subsidiary Guarantor into the Company or another Subsidiary
Guarantor) or sell, transfer, assign, lease, convey or otherwise dispose of all
or substantially all its Property in any one transaction or series of
transactions unless:

 

(1) such Subsidiary Guarantor will be the Surviving Person or the
Surviving Person (if other than such Subsidiary Guarantor) formed by such
merger, consolidation or amalgamation or to which such sale, transfer,
assignment, lease, conveyance or disposition is made will be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia;

 

(2) the Surviving Person (if other than such Subsidiary Guarantor)
expressly assumes, by a Subsidiary Guarantee or a supplement to the Second
Priority Subsidiary Guarantee Agreement or a supplemental indenture in form
reasonably satisfactory to the Trustee, executed and delivered to the Trustee
by such Surviving Person, the due and punctual performance and observance of
all the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee;

 

(3) immediately before and after giving effect to such transaction
or series of transactions on a pro forma basis (and treating, for purposes of
this clause (3), any Debt that becomes, or is anticipated to become, an
obligation of the Surviving Person, the Company or any Restricted Subsidiary as
a result of such transaction or series of transactions as 

 

65

 

having been
Incurred by the Surviving Person, the Company or such Restricted Subsidiary at
the time of such transaction or series of transactions), no Default or Event of
Default shall have occurred and be continuing; and

 

(4) the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers’ Certificate and an Opinion of Counsel, each stating that such transaction
and such Subsidiary Guarantee, if any, in respect thereto comply with this
covenant and that all conditions precedent herein provided for relating to such
transaction have been satisfied.

 

The foregoing provisions (other
than clause (3)) shall not apply to (A) any transactions which do not
constitute an Asset Sale if the Subsidiary Guarantor is otherwise being
released from its Subsidiary Guarantee at the time of such transaction in
accordance with this Indenture and the Second Priority Collateral Documents or (B) any
transactions which constitute an Asset Sale if the Company has complied with Section 4.06
and the Subsidiary Guarantor is released from its Subsidiary Guarantee at the
time of such transaction in accordance with this Indenture and the Second
Priority Collateral Documents.

 

The Surviving Person shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under this Indenture (or of the Subsidiary Guarantor under the
Subsidiary Guarantee, as the case may be), but the predecessor Company in the
case of:

 

(a) a sale, transfer, assignment, conveyance or other disposition
(unless such sale, transfer, assignment, conveyance or other disposition is of
all or substantially all the assets of the Company as an entirety or virtually
as an entirety); or

 

(b) a lease,

 

shall not be released from any
obligation to pay the principal of, premium, if any, and interest on, the
Securities.

 

ARTICLE VI

 

Defaults and Remedies

 

SECTION 6.01.  Events of Default.  The following events shall be “Events of
Default”:

 

(a) the Company fails to make the payment of any interest on any
of the Securities when the same becomes due and payable, and such failure
continues for a period of 30 days;

 

66

 

(b) the Company fails to make the payment of any principal of, or
premium, if any, on any of the Securities when the same becomes due and payable
at its Stated Maturity, upon acceleration, redemption, optional redemption,
required repurchase or otherwise;

 

(c) the Company fails to comply with Article V;

 

(d) the Company fails to comply with any covenant or agreement in
the Securities or in this Indenture (other than a failure that is the subject
of the foregoing clauses (a), (b) or (c)) and such failure continues for
30 days after written notice is given to the Company as provided below;

 

(e) a default under any Debt by the Company or any Restricted
Subsidiary that results in acceleration of the final maturity of such Debt, or
the failure to pay any such Debt at final maturity (giving effect to applicable
grace periods), in an aggregate amount in excess of $35.0 million or its
foreign currency equivalent at the time (the “cross acceleration provisions”);

 

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

 

(1) commences a voluntary case;

 

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

 

(3) consents to the appointment of a Custodian of it or for any
substantial part of its property; or

 

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

 

or takes any comparable action under any foreign laws relating to
insolvency;

 

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

 

(1) is for relief against the Company or any Significant
Subsidiary in an involuntary case;

 

(2) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or

 

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

 

and in each such case the order or decree remains unstayed and in
effect for 45 days; or

 

67

 

(h) any judgment or judgments for the payment of money in an aggregate
amount in excess of $35.0 million or its foreign currency equivalent at
the time is rendered against the Company or any Restricted Subsidiary and shall
not be waived, satisfied or discharged for any period of 30 consecutive days
during which a stay of enforcement shall not be in effect;

 

(i) any Subsidiary Guarantee of a Significant Subsidiary ceases to
be in full force and effect (other than in accordance with the terms of such
Subsidiary Guarantee and this Indenture) and such default continues for
20 days after notice or any Subsidiary Guarantor that is a Significant
Subsidiary denies or disaffirms its obligations under its Subsidiary Guarantee
(the “guarantee provisions”); and

 

(j) the material impairment of the security interests under the
Second Priority Collateral Documents (other than in accordance with the terms
of the Second Priority Collateral Documents and this Indenture as each may be
amended from time to time) for any reason other than the satisfaction in full
of all obligations under this Indenture and discharge of the Second Priority
Collateral Documents and this Indenture or any security interest created
thereunder shall be declared invalid or unenforceable or the Company or any of
its Subsidiaries asserting, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable (the “security
default provisions”).

 

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

 

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

 

A Default under clause (d), (i) or
(j) is not an Event of Default until the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Securities then outstanding
notify the Company (and in the case of such notice by Holders, the Trustee) of
the Default and the Company does not cure such Default within the time
specified after receipt of such notice. 
Such notice must specify the Default, demand that it be remedied and
state that such notice is a “Notice of Default”.

 

The Company shall deliver to
the Trustee, within 30 days after the occurrence thereof, written notice in the
form of an Officers’ Certificate of any event that with the giving of notice or
the lapse of time would become an Event of Default, its status and what action
the Company is taking or proposes to take with respect thereto.

 

SECTION 6.02.
 Acceleration.  If an Event of Default with respect to the
Securities (other than an Event of Default specified in Section 6.01(f) or
6.01(g) with respect to the Company) shall have occurred and be
continuing, the Trustee by notice to 

 

68

 

the Company, or the Holders of
not less than 25% in aggregate principal amount of the Securities then
outstanding by notice to the Company and the Trustee, may declare to be
immediately due and payable the principal amount at maturity of all the
Securities then outstanding, plus accrued but unpaid interest to the date of
acceleration on all the Securities to be due and payable.  Upon such a declaration, such principal and
interest shall be due and payable immediately. 
If an Event of Default specified in Section 6.01(f) or 6.01(g) with
respect to the Company occurs, the principal of and accrued and unpaid interest
on all the Securities shall, automatically and without any action by the
Trustee or any Holder, become and be immediately due and payable.  The Holders of a majority in aggregate
principal amount of the outstanding Securities by notice to the Trustee and the
Company may rescind and annul such declaration of acceleration if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal, premium or
interest that has become due solely because of the acceleration.  No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

 

SECTION 6.03.  Other Remedies.  If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.

 

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

 

SECTION 6.04.  Waiver of Past Defaults.  The Holders of a majority in aggregate
principal amount of the Securities then outstanding by notice to the Trustee
may waive an existing Default and its consequences except (i) a Default in
the payment of the principal of, premium, if any, or interest on a Security or (ii) a
Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Holder affected.  When a Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or impair
any consequent right.

 

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

 

69

 

SECTION 6.06.  Limitation on Suits.  A Holder may not pursue any remedy with
respect to this Indenture or the Securities unless:

 

(1) such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default;

 

(2) the Holders of at least 25% in aggregate principal amount of
the Securities then outstanding shall have made a written request, and such
Holder of or Holders shall have offered reasonable indemnity to the Trustee to
pursue a remedy; and

 

(3) the Trustee has failed to institute such proceeding and has
not received from the Holders of at least a majority in aggregate
principal amount of the Securities outstanding a direction inconsistent with
such request, within 60 days after such notice, request and offer.

 

The foregoing limitations on
the pursuit of remedies by a Holder shall not apply to a suit instituted by a
Holder for the enforcement of payment of the principal of and premium, if any,
or interest payable with respect to such Security on or after the applicable
due date specified in such Security. A Holder may not use this Indenture to
prejudice the rights of another Holder or to obtain a preference or priority
over another Holder.

 

SECTION 6.07.  Rights of Holders to Receive Payment.  Notwithstanding any other provision of this
Indenture, the right of any Holder to receive payment of principal of and
interest on the Securities held by such Holder, on or after the respective due
dates expressed in the Securities, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.

 

SECTION 6.08.  Collection Suit by Trustee.  If an Event of Default specified in Section 6.01(a) or
(b) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount then due and owing (together with interest on any unpaid interest to the
extent lawful) and the amounts provided for in Section 7.07.

 

SECTION 6.09.  Trustee May File Proofs of Claim.  The Trustee may file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee and the Holders allowed in any judicial proceedings
relative to the Company, its creditors or its property and, unless prohibited
by law or applicable regulations, may vote on behalf of the Holders in any
election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders (it being understood it shall be under no obligation to do so), to pay
to the Trustee any amount due it for the reasonable compensation, expenses, 

 

70

 

disbursements and advances of
the Trustee, its agents and its counsel, and any other amounts due the Trustee
under Section 7.07.

 

SECTION 6.10.  Priorities.  If the Trustee collects any money or property
pursuant to this Article VI, 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 amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and

 

THIRD:  to the Company.

 

The Trustee may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.  At least 15 days before such record
date, the Company shall mail to each Holder and the Trustee a notice that
states the record date, the payment date and amount to be paid.

 

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 Holders of more than 10%
in aggregate principal amount of the Securities.

 

SECTION 6.12.  Waiver of Stay or Extension Laws.  The Company (to the extent it may lawfully do
so) shall not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.

 

SECTION 6.13.  Enforcement of Remedies.  Notwithstanding any of the foregoing, any
enforcement of the Guarantees under the Second Priority Guarantee Agreement or
any remedies with respect to the Second Priority Collateral under the Second
Priority Collateral Documents is subject to the provisions of the Intercreditor
Agreement.

 

71

 

ARTICLE VII

 

Trustee

 

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

 

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

 

(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and

 

(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.  However, in the case of certificates or
opinions specifically required by any provision hereof to be furnished to it,
the Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations stated therein).

 

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

 

(1) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;

 

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

 

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

 

(d)  Every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.

 

(e)  The Trustee shall not
be liable for interest on any money received by it except as the Trustee may
agree in writing with the Company.

 

(f)  Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.

 

72

 

(g)  No provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder or
in the exercise of any of its rights or powers.

 

(h)  Every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this Section and
to the provisions of the TIA, and the provisions of this Article VII shall
apply to the Trustee in its role as Registrar, Paying Agent and Security
Custodian.

 

(i)  The Trustee shall not
be deemed to have notice of a Default or an Event of Default unless (a) the
Trustee has received written notice thereof from the Company or any Holder or (b) a
Trust Officer shall have actual knowledge thereof.

 

SECTION 7.02.  Rights of Trustee.  (a)  The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person.  The Trustee need not
investigate any fact or matter stated in the document.  The Trustee may, however, in its discretion
make such further inquiry or investigation into such facts or matters as it may
see fit and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.

 

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

 

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

 

(d)  The Trustee shall not
be liable for any action it takes or omits to take in good faith that it
believes to be authorized or within its rights or powers; provided, however,
that, subject to paragraph (b) of Section 7.01, the Trustee’s conduct
does not constitute willful misconduct or negligence.

 

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

 

(f)  The permissive rights
of the Trustee to do things enumerated in this Indenture shall not be construed
as a duty unless so specified herein.

 

(g)  The Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of the Holders pursuant to
this Indenture, unless such Holders shall have offered to the Trustee security 

 

73

 

or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.

 

(h)  The Trustee shall not
be deemed to have notice of any Default or Event of Default unless a Trust
Officer has actual knowledge thereof or unless written notice of any event
which is in fact such a default is received by the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Securities and this
Indenture.

 

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

 

(j)  In no event shall the
Trustee be responsible or liable for special, indirect, or consequential loss
or damage of any kind whatsoever (including, but not limited to, loss of
profit) irrespective of whether the Trustee has been advised of the likelihood
of such loss or damage and regardless of the form of action.

 

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

 

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

 

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

 

SECTION 7.06.  Reports by Trustee to Holders.  Within 60 days after February 1 each
year beginning with February 1, 2009, the Trustee shall mail to each
Holder a brief report dated as of such February 1 that complies with TIA
§ 313(a), if and to the extent required by such subsection.  The Trustee shall also comply with
TIA § 313(b).

 

A copy of each report at the
time of its mailing to Holders shall be filed with the Commission and each
stock exchange (if any) on which the Securities are listed.

 

74

 

The Company agrees to notify
promptly the Trustee whenever the Securities become listed on any stock
exchange and of any delisting thereof.

 

SECTION 7.07.  Compensation and Indemnity.  The Company and the Guarantors, jointly and
severally, shall pay to the Trustee from time to time reasonable compensation
for its services.  The Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an
express trust.  The Company and the
Guarantors, jointly and severally, shall reimburse the Trustee upon request for
all reasonable out-of-pocket expenses incurred or made by it, including costs
of collection, in addition to the compensation for its services.  Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee’s agents,
counsel, accountants and experts.  The
Company and the Guarantors, jointly and severally, shall indemnify the Trustee
against any and all loss, liability, claim, damage or expense (including
reasonable attorneys’ fees and expenses) incurred by it in connection with the
acceptance and administration of this trust and the performance of its duties
hereunder.  The Trustee shall notify the
Company promptly of any claim of which a Trust Officer has received notice for
which it may seek indemnity.  Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder unless the Company has been prejudiced thereby.  The Company shall defend the claim, and the
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel.  The
Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee’s own willful
misconduct, negligence or bad faith.  The
Company need not pay for any settlement made by the Trustee without the Company’s
consent, such consent not to be unreasonably withheld.  All indemnifications and releases from
liability granted hereunder to the Trustee shall extend to its officers,
directors, employees, agents, successors and assigns.

 

To secure the Company’s payment obligations
in this Section 7.07, the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee other than
money or property held in trust to pay principal of and interest on particular
Securities.

 

The Company’s payment obligations pursuant to
this Section 7.07 shall survive the resignation or removal of the Trustee
and the discharge or termination of this Indenture.  When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(f) or (g) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.

 

SECTION 7.08.  Replacement of Trustee.  The Trustee may resign at any time by so
notifying the Company.  The Holders of a
majority in aggregate principal amount of the Securities the outstanding may
remove the Trustee by so notifying the Trustee and may appoint a successor
Trustee, provided that so long as no Default or Event of Default has
occurred and is continuing, the Company shall have the right to consent to the
successor Trustee, such consent not to be unreasonably withheld.  The Company shall remove the Trustee if:

 

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

 

75

 

(2) the
Trustee is adjudged bankrupt or insolvent;

 

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

 

(4) the
Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed by the
Company or by the Holders of a majority in aggregate principal amount of the
Securities then outstanding, and such Holders do not reasonably promptly
appoint a successor Trustee, or if a vacancy exists in the office of Trustee
for any reason (the Trustee in such event being referred to herein as the
retiring Trustee), the Company shall promptly appoint a successor Trustee.

 

A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Company.  Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of
its succession to Holders.  The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.

 

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

 

If the Trustee fails to comply with Section 7.10,
any Holder who has been a bona fide Holder of a Security for at least six
months may petition at the expense of the Company any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

 

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

 

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

 

In case at the time such successor or
successors by merger, conversion or consolidation to the Trustee shall succeed
to the trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any such successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the 

 

76

 

successor to the Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Securities or in this Indenture provided that the certificate
of the Trustee shall have.

 

SECTION 7.10.  Eligibility; Disqualification.  The Trustee shall at all times satisfy the
requirements of TIA § 310(a).  The
Trustee shall have (or, in the case of a corporation included in a bank holding
company system, the related bank holding company shall have) a combined capital
and surplus of at least $50,000,000 as set forth in its (or its related bank
holding company’s) most recent published annual report of condition.  The Trustee shall comply with TIA
§ 310(b), subject to the penultimate paragraph thereof; provided, however,
that there shall be excluded from the operation of TIA § 310(b)(1) any
indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are outstanding if
the requirements for such exclusion set forth in TIA § 310(b)(1) are
met.

 

SECTION 7.11.  Preferential Collection of Claims
Against Company.  The Trustee
shall comply with TIA § 311(a), excluding any creditor relationship listed
in TIA § 311(b).  A Trustee who has
resigned or been removed shall be subject to TIA § 311(a) to the
extent indicated.

 

ARTICLE VIII

Discharge of Indenture; Defeasance

 

SECTION 8.01.  Discharge of Liability on
Securities; Defeasance.  

(a)  When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancellation or (ii) all outstanding Securities have become due and
payable, whether at maturity or as a result of the mailing of a notice of
redemption pursuant to Article III and the Company irrevocably deposits
with the Trustee funds sufficient to pay at maturity or upon redemption all
outstanding Securities, including interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.07),
and if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 8.01(c), cease to
be of further effect.  The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers’ Certificate and an Opinion of Counsel and
at the cost and expense of the Company.

 

(b)  Subject to Sections 8.01(c) and
8.02, the Company at any time may terminate (i) all of its obligations
under the Securities and this Indenture (“legal defeasance option”) or (ii) its
obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13 and 4.14 and the operation of Sections 6.01(e),
6.01(f), 6.01(g), 6.01(h), 6.01(i) and 6.01(j) (but, in the case of
Sections 6.01(f) and (g), with respect only to Significant
Subsidiaries) and the limitations contained in Section 5.01(a)(5) (“covenant
defeasance option”).  The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.

 

77

 

If the Company exercises its legal defeasance
option, payment of the Securities may not be accelerated because of an Event of
Default.  If the Company exercises its
covenant defeasance option, payment of the Securities may not be accelerated
because of an Event of Default specified in Sections 6.01(d) (with
respect to the covenants of Article IV identified in the immediately
preceding paragraph), 6.01(e), 6.01(f), 6.01(g), 6.01(h), 6.01(i) or 6.01(j) (with
respect only to Significant Subsidiaries in the case of Sections 6.01(f) and
6.01(g)) or because of the failure of the Company to comply with the
limitations contained in Section 5.01(a)(5).  If the Company exercises its legal defeasance
option or its covenant defeasance option, the Second Priority Lien, as it
pertains to the Securities, will be released and each Subsidiary Guarantor will
be released from all its obligations under its Subsidiary Guarantee, as it
pertains to the Securities.

 

Upon satisfaction of the conditions set forth
herein and upon request of the Company, the Trustee shall acknowledge in
writing the discharge of those obligations that the Company terminates.

 

(c)  Notwithstanding clauses (a) and
(b) above, the Company’s obligations in Sections 2.04, 2.05, 2.06, 2.07,
7.07, 7.08, 8.05 and 8.06 shall survive until the Securities have been paid in
full.  Thereafter, the Company’s
obligations in Sections 7.07 and 8.05 shall survive.

 

SECTION 8.02.  Conditions to Defeasance.  The Company may exercise its legal defeasance
option or its covenant defeasance option only if:

 

(a) the
Company irrevocably deposits in trust with the Trustee money or U.S. Government
Obligations for the payment of principal of and interest on the Securities to
maturity or redemption, as the case may be;

 

(b) the
Company delivers to the Trustee a certificate from a nationally recognized firm
of independent certified public accountants expressing their opinion that the
payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay principal and interest when due on all the Securities to
maturity or redemption, as the case may be;

 

(c) 123
days pass after the deposit is made and during the 123-day period no Default
specified in Section 6.01(f) or 6.01(g) occurs with respect to
the Company or any other Person making such deposit which is continuing at the
end of the period;

 

(d) no
Default or Event of Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;

 

(e) such
deposit does not constitute a default under any other agreement or instrument
binding on the Company;

 

78

 

(f) the
Company delivers to the Trustee an Opinion of Counsel to the effect that the
trust resulting from the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940;

 

(g) in
the case of the legal defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel stating that

 

(1) the
Company has received from the Internal Revenue Service a ruling; or

 

(2) since
the date of this Indenture there has been a change in the applicable Federal
income tax law, to the effect, in either case, that, and based thereon such
Opinion of Counsel shall confirm that, the Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of such defeasance and
will be subject to Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such defeasance had not
occurred;

 

(h) in
the case of the covenant defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that the Holders will not
recognize income, gain or loss for Federal income tax purposes as a result of
such covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such covenant defeasance had not occurred; and

 

(i) the
Company delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance and
discharge of the Securities as contemplated by this Article VIII have been
complied with.

 

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

 

SECTION 8.03.  Application of Trust Money.  The Trustee shall hold in trust money
or U.S. Government Obligations deposited with it pursuant to this Article VIII.  It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on
the Securities.

 

SECTION 8.04.  Repayment to Company.  The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money or securities
held by them at any time.

 

Subject to any applicable abandoned property
law, the Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal or interest that remains
unclaimed for two years, and, thereafter, 

 

79

 

Holders entitled to the
money must look to the Company for payment as general creditors.

 

SECTION 8.05.  Indemnity for Government Obligations.  The Company shall pay and shall indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against
deposited U.S. Government Obligations or the principal and interest
received on such U.S. Government Obligations.

 

SECTION 8.06.  Reinstatement.  If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article VIII
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article VIII until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations
in accordance with this Article VIII;  provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.

 

ARTICLE IX

 

Amendments

 

SECTION 9.01.  Without Consent of Holders.  Without the consent of any Holders, the
Company, when authorized by a Board Resolution, the Subsidiary Guarantors and
the Trustee may amend this Indenture or the Securities and, subject to any
other consent required under the terms of the applicable Second Priority
Collateral Documents, the Second Priority Collateral Documents, in each case
without notice to:

 

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

 

(b) provide
for the assumption by a successor corporation of the obligations of the Company
or any Subsidiary Guarantor under this Indenture or any Second Priority
Collateral Documents;

 

(c) provide
for uncertificated Securities in addition to or in place of certificated Securities;
provided, however, that the uncertificated Securities are issued
in registered form for purposes of Section 163(f) of the Code, or in
a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of
the Code;

 

(d) add
additional Guarantees with respect to
the Securities or release Subsidiary Guarantors from Subsidiary
Guarantees as provided by the terms of this Indenture or the Subsidiary
Guarantees;

 

80

 

(e) further
secure the Securities (and if such security interest includes Liens on Property
of the Company, provide for releases of such Property on terms comparable to
the terms on which Collateral constituting Property of Subsidiary Guarantors
may be released), release all or any portion of the Collateral pursuant to the
terms of the Second Priority Collateral Documents, add to the covenants of the
Company or the Subsidiary Guarantors for the benefit of the Holders or
surrender any right or power herein conferred upon the Company;

 

(f) in
the case of this Indenture, make any change that does not adversely affect the
rights of any Holder;

 

(g) make
any change to the subordination provisions of a Subsidiary Guarantee or any
Second Priority Collateral Documents that would limit or terminate the benefits
available to any holder of Senior Obligations under such provisions; 

 

(h) make
any change to comply with any requirements of the Commission in connection with
the qualification of this Indenture under the Trust Indenture Act, or

 

(i)
to conform the text of this Indenture or the Securities to any provision of the
“Description of Notes” contained in the Prospectus Supplement.

 

After an amendment under this Section 9.01
becomes effective, the Company shall mail to Holders a notice briefly
describing such amendment.  The failure
to give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.01.

 

SECTION 9.02.  With Consent of Holders.  (a)  The Company, when authorized by a
Board Resolution, the Subsidiary Guarantors and the Trustee may amend this
Indenture or the Securities and, subject to any other consent required under
the terms of the applicable Second Priority Collateral Documents, the Second
Priority Collateral Documents, and (subject as aforesaid) waive any past
default or compliance with any provisions (except, in the case of this
Indenture, as provided in Section 6.04), with the consent of the Holders
of at least a majority in aggregate principal amount of the Securities then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Securities). 
However, without the consent of each Holder affected thereby, an
amendment may not:

 

(1) amend
this Indenture to reduce the amount of Securities whose Holders are required to
consent to an amendment or waiver;

 

(2) amend
this Indenture to reduce the rate of or extend the time for payment of interest
on any Security;

 

(3) amend
this Indenture to reduce the principal of or extend the Stated Maturity of any
Security;

 

(4) amend
this Indenture to make any Security payable in money other than that stated in
the Security;

 

81

 

(5) amend
this Indenture or any Subsidiary Guarantee to impair the right of any Holder to
receive payment of principal of and interest on such Holder’s Securities on or
after the due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder’s Securities or any Subsidiary
Guarantee;

 

(6) amend
this Indenture or any Subsidiary Guarantee to subordinate the Securities or any
Subsidiary Guarantee to any other obligation of the Company or the applicable
Subsidiary Guarantor (except in the case of the Second Priority Subsidiary
Guarantee Agreement, as permitted by paragraph (b) below);

 

(7) amend
this Indenture to reduce the premium payable upon the redemption of any
Security or change the time at which any Security may be redeemed in accordance
with Article III;

 

(8) amend
this Indenture to reduce the premium payable upon a Change of Control or, at
any time after a Change of Control has occurred, amend the definition of “Change
of Control” or change the time at which any Change of Control Offer relating
thereto must be made or at which the Securities must be repurchased pursuant to
such Change of Control Offer; or

 

(9) at
any time after the Company is obligated to make a Prepayment Offer with the
Excess Proceeds from Asset Sales, amend this Indenture to change the time at which
such Prepayment Offer must be made or at which the Securities must be
repurchased pursuant thereto.

 

(b)  Without
limiting the foregoing, the Holders will be deemed to have consented for
purposes of the Second Priority Collateral Documents (including for purposes of
determining actions of the Second Priority Instructing Group) to (i) any
amendment, waiver or other modification (including any consent thereunder) of
the Second Priority Collateral Documents (including any annexes, exhibits or
schedules thereto) that would not be adverse to the Holders in any material
respect, as reasonably determined by the Board of Directors (as evidenced by a
Board Resolution), and (ii) to any of the following amendments, waivers
and other modifications to the Second Priority Collateral Documents (the “Second
Priority Collateral Documents Amendments”):

 

(1) an amendment to the
Intercreditor Agreement to modify the restriction on changes to Second Priority
Collateral Documents and Second Priority Debt Documents without the consent of
holders of Senior Obligations or their representatives (but without modifying
any provisions relating to consent of Holders or other Second Priority Debt to
various actions);

 

(2) to the extent such
amendment, waiver or modification relates to the amount (including amounts of
Senior Obligations and Second Priority Debt) or the terms of Debt (including as
reflected in related definitions such as “Replacement Second Priority Debt”)
that may be secured by Liens on the Collateral, as may be consented to by the
Senior Collateral Agent or the Senior 

 

82

 

Banks
in accordance with the terms of the Intercreditor Agreement or the applicable
Second Priority Collateral Document (but without limiting any of the
restrictive covenants and related definitions contained in this Indenture);

 

(3) an amendment to the Second
Priority Subsidiary Guarantee Agreement to subordinate, on comparable terms to
those provided therein with respect to Senior Bank Obligations, the obligations
of the Subsidiary Guarantors under the Second Priority Subsidiary Guarantee
Agreement to the prior payment when due of the guarantees by such Subsidiary
Guarantor of any Additional Senior Debt, provided that such amendment
applies equally with respect to all Second Priority Debt;

 

(4) an amendment to the Second
Priority Collateral Documents to provide for a class of Secured Obligations
having rights in respect of the Collateral that are subordinated to the Second
Priority Debt Obligations to at least the same extent that the Second Priority
Debt Obligations are subordinated to the Senior Obligations, as reasonably
determined by the Board of Directors (as evidenced by a Board Resolution), provided
that (A) such Debt is not secured by Liens on any assets other than
Collateral and (B) to the extent such Secured Obligations represent Debt
of a Subsidiary of the Company, such Subsidiary is a Subsidiary Guarantor and
such Debt is subordinated to the prior payment of the Second Priority Debt
Obligation to at least the same extent as the Subsidiary Guarantees are
subordinated to the Senior Obligations (determined as aforesaid);

 

(5) an amendment to the
Intercreditor Agreement to provide, on comparable terms to those provided
therein with respect to Senior Bank Obligations, the lenders under any Senior
Obligations (including Additional Senior Debt Obligations) with rights and
remedies with respect to the Collateral, including the rights to distributions
of proceeds of Collateral and rights to control all remedies or other
activities related to the Collateral so long as any Senior Obligations remain
outstanding, comparable to those provided therein with respect to the Senior
Bank Obligations, provided that (A) the holders of Senior
Obligations and their representatives have obligations to holders of Second
Priority Debt and their representatives comparable to the obligation of holders
of Senior Bank Obligations and their representatives provided therein and (B) such
amendment applies equally with respect to all Second Priority Debt;

 

(6) an amendment to the
Intercreditor Agreement to change the conditions that must be satisfied in
order for a representative of additional Debt to become a party to the
Intercreditor Agreement, provided that (A) such amendment is consented
to by the Senior Collateral Agent in accordance with the terms of the
Intercreditor Agreement, (B) the conditions continue to require a
representative of such holders on behalf of such holders to become a party to
the Intercreditor Agreement, (C) such amendment applies equally with
respect to all Second Priority Debt, (D) the ability of the Second
Priority Collateral Trustee and the holders of Second Priority Debt and their
representatives to enforce their rights under the Intercreditor Agreement are
not adversely affected in any material 

 

83

 

respect
by such amendment and (E) the Lien on the Collateral securing the
Subsidiary Guarantees of the Securities will not be impaired (other than the
addition of new Secured Obligations that will be secured by the Collateral) as
a result of implementation of such amendment;

 

(7) an amendment, waiver or
modification to the Second Priority Collateral Documents to effectuate (A) (i) the
release of assets included in the Collateral from the Liens securing the
Securities (I) if all other Liens on those assets securing the Senior
Obligations (including all commitments thereunder) are released, (II) if
the Company or a Subsidiary of the Company provides substitute Collateral for
all or a portion of those assets with at least an equivalent fair value, as
determined in good faith by the Board of Directors (as evidenced by a Board
Resolution) or (III) if those assets are owned by a Subsidiary that is a
Subsidiary Guarantor and that Subsidiary Guarantor is released from its
Subsidiary Guarantee, provided that in the case of each of clauses (I)-(III) after
giving effect to the release there remains no Lien on such assets securing any
Secured Obligations, or (ii) the release of the Subsidiary Guarantee of a
Subsidiary Guarantor of the Securities upon such Subsidiary Guarantor ceasing
to Guarantee or be an obligor in respect of, or to pledge any of its assets to
secure, any Senior Obligations, provided that after giving effect to the
release the Subsidiary Guarantor ceases to Guarantee or be an obligor in
respect of, or to pledge its assets to secure, any Secured Obligations and provided,
in the case of both (i) and (ii), that after giving effect to the release,
at least $300 million in aggregate principal amount of Senior Obligations under
Credit Facilities will remain outstanding or (B) a release of Collateral
or a Subsidiary Guarantee of a Subsidiary Guarantor otherwise in accordance
with the terms of this Indenture and the Second Priority Collateral Documents;

 

(8) with respect to any
amendment, waiver or modification agreed to by the Senior Collateral Agent or
the holders of the Senior Obligations under any provision of any Senior
Collateral Documents, a comparable amendment, waiver or modification to the
comparable provision of the comparable Second Priority Collateral Document, provided
that such amendment, waiver or modification applies equally with respect to all
Second Priority Debt;

 

(9) upon request of the
Company without consent of any Holders unless, within 20 Business Days after
written notice of the proposed amendment, waiver or modification is mailed to
the Trustee and Holders, 25% in interest of the Holders delivers to the Trustee
written objection thereto;

 

(10) with the written consent
of the Holders of at least a majority of the aggregate principal amount of the
Securities then outstanding pursuant to Section 9.02(a); or

 

(11) an amendment, waiver or
modification permitted pursuant to Section 9.01.

 

84

 

At
the request of the Company, the Trustee shall execute and deliver any
documents, instructions or instruments evidencing such deemed consent of the
Holders. The Trustee, in its capacity as Second Priority Representative to
Holders, shall take such action under the Second Priority Collateral Documents
as may be requested by the Company to give effect to any such amendment, waiver
or modification. Notwithstanding the foregoing, no such consent or deemed
consent shall be deemed or construed to represent an amendment or waiver, in
whole or in part, of any provision of this Indenture or the Securities.

 

The
foregoing shall not limit the right of the Company to amend, waive or otherwise
modify the Second Priority Collateral Documents in accordance with their terms.

 

(c)  In
addition and without limiting the foregoing, (x) Collateral securing a
Subsidiary Guarantee of the Securities or (y) a Subsidiary Guarantee of
the Securities provided by a Subsidiary Guarantor may be released only in
respect of the Securities:

 

(i) upon request of the
Company without consent of any Holder unless, within 20 Business Days after
written notice of the proposed release of such (1) Collateral from the
Liens securing Subsidiary Guarantees of the Securities or (2) Subsidiary
Guarantor, as the case may be, is mailed to the Trustee and the Holders,
Holders of 25% of the outstanding principal amount of Securities deliver to the
Company a written objection to such release; or

 

(ii) with the written
consent of the Holders of at least a majority of the aggregate principal amount
of the Securities then outstanding.

 

Under
the circumstances described in clauses (i) and (ii) above, Holders
shall also be deemed to have consented to such release for purposes of any
consent required under the Second Priority Collateral Documents (including for
purposes of determining actions of the Second Priority Instructing Group).

 

At
the request of the Company, the Trustee shall execute and deliver any
documents, instructions or instruments evidencing the consent of the Holders to
such release.  The Trustee, in its
capacity as Second Priority Representative for Holders, shall take such action
under the Second Priority Collateral Documents or otherwise as may be requested
by the Company to give effect to any such release.

 

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

 

After an amendment under this Section becomes
effective, the Company shall mail to each Holder at such Holder’s address
appearing in the Security Register a notice briefly describing such
amendment.  The failure to give such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section.

 

85

 

SECTION 9.03.  Compliance with Trust Indenture Act.  Every amendment to this Indenture or the
Securities shall comply with the TIA as then in effect.

 

SECTION 9.04.  Revocation and Effect of Consents and
Waivers.  A consent to an amendment
or a waiver by a Holder of a Security shall bind the Holder and every
subsequent Holder of that Security or portion of the Security that evidences
the same debt as the consenting Holder’s Security, even if notation of the
consent or waiver is not made on the Security. 
However, any such Holder or subsequent Holder may revoke the consent or
waiver as to such Holder’s Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment or waiver
becomes effective.  After an amendment or
waiver becomes effective, it shall bind every Holder.  An amendment or waiver becomes effective upon
the execution of such amendment or waiver by the Trustee.

 

The Company may, but shall not be obligated
to, fix a record date for the purpose of determining the Holders entitled to
give their consent or take any other action described above or required or
permitted to be taken pursuant to this Indenture.  If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. 
No such consent shall be valid or effective for more than 120 days after
such record date.

 

SECTION 9.05.  Notation on or Exchange of Securities.  If an amendment changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver such
Security to the Trustee.  The Trustee may
place an appropriate notation on the Security regarding the changed terms and
return such Security to the Holder. 
Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. 
Failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment.

 

SECTION 9.06.  Trustee To Sign Amendments.  The Trustee shall sign any amendment or
release authorized pursuant to this Article IX if the amendment or release
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee.  If such amendment or release
does adversely affect the rights, duties, liabilities or immunities of the
Trustee, the Trustee may but need not sign it. 
In signing such amendment or release the Trustee shall be entitled to
receive indemnity reasonably satisfactory to it and to receive, and (subject to
Section 7.01) shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that such amendment or release is
authorized or permitted by this Indenture.

 

SECTION 9.07.  Payment for Consent.  Neither the Company nor any Affiliate of the
Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this 

 

86

 

Indenture or the Securities unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.

 

ARTICLE X

 

Miscellaneous

 

SECTION 10.01.  Trust Indenture Act Controls.  If any provision of this Indenture limits,
qualifies or conflicts with another provision that is required to be included
in this Indenture by the TIA, the required provision shall control.

 

SECTION 10.02.  Notices.  Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail or sent by
facsimile (with a hard copy delivered in person or by mail promptly thereafter)
and addressed as follows:

 

if to the Company:

 

Rite Aid Corporation

30 Hunter Lane

Camp Hill, Pennsylvania
17011

facsimile: 717-760-7867

 

Attention
of:  Robert B. Sari, Esq.

 

if to the Trustee:

 

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

2 North LaSalle Street, Suite 1020

Chicago, IL 60602

facsimile: 312-827-8542

 

Attention
of:  Corporate Trust Administration

 

The Company or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.

 

Any notice or communication mailed to a
Holder shall be mailed to the Holder at the Holder’s address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.

 

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

 

87

 

SECTION 10.03.  Communication by Holders with Other
Holders.  Holders may communicate
pursuant to TIA § 312(b) with other Holders with respect to their rights
under this Indenture or the Securities. 
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA § 312(c).

 

SECTION 10.04.  Certificate and Opinion as to Conditions
Precedent.  Upon any request or
application by the Company to the Trustee to take or refrain from taking any
action under this Indenture, the Company shall furnish to the Trustee:

 

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

 

(2) except
in the case of Section 3.01 under which an opinion will not be required,
an Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers’
Certificate or certificates of public officials.

 

SECTION 10.05.  Statements Required in Certificate or
Opinion.  Each certificate with
respect to compliance with a covenant or condition provided for in this
Indenture shall include:

 

(1) a
statement that the individual making such certificate 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 contained in such certificate are based;

 

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

 

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

 

Each opinion with respect to compliance with
a covenant or condition provided for in this Indenture shall be in form and
substance reasonably satisfactory to the party requesting such opinion and the
party giving such opinion.

 

SECTION 10.06.  When Securities Disregarded.  In determining whether the Holders of the
required principal amount of Securities have concurred in any direction, waiver
or consent, Securities owned by the Company or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company shall be disregarded and deemed not to be outstanding,
except that, for the 

 

88

 

purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that the Trustee knows are so owned shall be so disregarded.  Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.

 

SECTION 10.07.  Rules by Trustee, Paying Agent and
Registrar.  The Trustee may make
reasonable rules for action by or a meeting of Holders.  The Registrar and the Paying Agent or
co-registrar may make reasonable rules for their functions.

 

SECTION 10.08.  Legal Holidays.  A “Legal Holiday” is a Saturday, a Sunday or
a day on which banking institutions are not required to be open in the State of
New York.  If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.  If a regular record date is a Legal Holiday,
the record date shall not be affected.

 

SECTION 10.09.  Governing Law.  THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW.

 

SECTION 10.10.  No Recourse Against Others.  A director, officer, employee or stockholder,
as such, of the Company shall not have any liability for any obligations of the
Company under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation.  By accepting a Security, each Holder shall
waive and release all such liability. 
The waiver and release shall be part of the consideration for the issue
of the Securities.

 

SECTION 10.11.  Successors.  All agreements of the Company in this
Indenture and the Securities shall bind its successors.  All agreements of the Trustee in this
Indenture shall bind its successors.

 

SECTION 10.12.  Multiple Originals.  The parties may sign any number of copies of
this Indenture.  Each signed copy shall
be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this
Indenture.

 

SECTION 10.13.  Table of Contents; Headings.  The table of contents, cross-reference sheet
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not intended to be considered a part
hereof and shall not modify or restrict any of the terms or provisions hereof.

 

SECTION 10.14.  Waiver of Jury Trial.  EACH OF THE COMPANY AND THE TRUSTEE HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

89

 

SECTION 10.15.  Force Majeure.  In no event shall the Trustee be responsible
or liable for any failure or delay in the performance of its obligations
hereunder arising out of or caused by, directly or indirectly, forces beyond
its control, including, without limitation, accidents, acts of war or
terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood
that the Trustee shall use reasonable efforts which are consistent with
accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.

 

90

 

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

 

	
   

  	
  RITE
  AID CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
    Name:
  

  	
  Robert
  B. Sari

  
	
   

  	
    Title:

  	
  Executive
  Vice President,

  
	
   

  	
   

  	
  Secretary
  and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EACH
  OF THE SUBSIDIARY

  GUARANTORS LISTED ON SCHEDULE

  A HERETO,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
    Name:
  

  	
  Robert
  B. Sari

  
	
   

  	
    Title:

  	
  Authorized
  Person

  
						

 

 

	
   

  	
  THE
  BANK OF NEW YORK TRUST

  COMPANY, N.A., as Trustee,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title

  

 

 

SCHEDULE A

 

Subsidiary Guarantors

 

Corporations

 

	
  3581 Carter Hill Road–Montgomery Corp.

  
	
  Harco, Inc.

  
	
  K&B Alabama Corporation

  
	
  Rite Aid of Alabama, Inc.

  
	
  Thrifty Corporation

  
	
  Thrifty PayLess, Inc.

  
	
  Rite Aid of Connecticut, Inc.

  
	
  Eagle Managed Care Corp.

  
	
  K&B, Incorporated

  
	
  Rite Aid Drug Palace, Inc.

  
	
  Rite Aid Hdqtrs. Corp.

  
	
  Rite Aid Hdqtrs. Funding, Inc.

  
	
  Rite Aid of Delaware, Inc.

  
	
  Rite Aid Transport, Inc.

  
	
  Rite Fund, Inc.

  
	
  Rite Investments Corp.

  
	
  Rx Choice, Inc.

  
	
  Rite Aid Realty Corp.

  
	
  Patton Drive and Navy Boulevard Property Corporation

  
	
  Rite Aid of Florida, Inc.

  
	
  Rite Aid of Georgia, Inc.

  
	
  Rite Aid of Illinois, Inc.

  
	
  Rite Aid of Indiana, Inc.

  
	
  Rite Aid of Kentucky, Inc.

  
	
  K&B Louisiana Corporation

  
	
  K&B Services, Incorporated

  
	
  Rite Aid of Maine, Inc.

  
	
  Rite Aid of Massachusetts, Inc.

  
	
  GDF, Inc.

  
	
  READ’s Inc.

  

 

 

	
  Rite Aid of Maryland, Inc.

  
	
  Apex Drug Stores, Inc.

  
	
  PDS-1 Michigan, Inc.

  
	
  Perry Distributors, Inc.

  
	
  Perry Drug Stores, Inc.

  
	
  Ram–Utica, Inc.

  
	
  RDS Detroit, Inc.

  
	
  Rite Aid of Michigan, Inc.

  
	
  K&B Mississippi Corporation

  
	
  Rite Aid of New Hampshire, Inc.

  
	
  657–659 Broad St. Corp.

  
	
  Lakehurst and Broadway Corporation

  
	
  Rite Aid of New Jersey, Inc.

  
	
  Rite Aid of New York, Inc.

  
	
  Rite Aid Rome Distribution Center, Inc.

  
	
  Rite Aid of North Carolina, Inc.

  
	
  4042 Warrensville Center Road–Warrensville Ohio, Inc.

  
	
  5600 Superior Properties, Inc.

  
	
  Broadview and Wallings–Broadview Heights Ohio, Inc.

  
	
  Rite Aid of Ohio, Inc.

  
	
  The Lane Drug Company

  
	
  Keystone Centers, Inc.

  
	
  Rite Aid of Pennsylvania, Inc.

  
	
  537 Elm Street Corporation

  
	
  Rite Aid of South Carolina, Inc.

  
	
  K&B Tennessee Corporation

  
	
  Rite Aid of Tennessee, Inc.

  
	
  K&B Texas Corporation

  
	
  Rite Aid of Vermont, Inc.

  
	
  England Street–Asheland Corporation

  
	
  Rite Aid of Virginia, Inc.

  
	
  5277 Associates, Inc.

  
	
  Rite Aid of Washington, D.C., Inc.

  
	
  Rite Aid of West Virginia, Inc.

  

 

2

 

	
  Brooks Pharmacy, Inc.

  
	
  Eckerd Corporation

  
	
  EDC Licensing, Inc.

  
	
  Genovese Drug Stores, Inc.

  
	
  JCG Holdings (USA), Inc.

  
	
  Maxi Drug North, Inc.

  
	
  Maxi Drug, Inc.

  
	
  P.J.C. Distribution, Inc.

  
	
  P.J.C. Realty Co., Inc.

  
	
  PJC Lease Holdings, Inc.

  
	
  PJC Special Realty Holdings, Inc.

  
	
  The Jean Coutu Group (PJC) USA, Inc.

  
	
  Thrift Drug Services, Inc.

  
	
  Thrift Drug, Inc.

  
	
  Eckerd Fleet, Inc.

  
	
  PJC of Massachusetts, Inc.

  
	
  PJC Realty MA, Inc.

  
	
  EDC Drug Stores, Inc.

  
	
  MC Woonsocket, Inc.

  
	
  PJC of Cranston, Inc.

  
	
  PJC of East Providence, Inc.

  
	
  PJC of Rhode Island, Inc.

  
	
  P.J.C. of West Warwick, Inc.

  
	
  Maxi Green Inc.

  
	
  PJC of Vermont, Inc.

  

 

Limited Liability Companies

 

	
  1515 West State Street Boise, Idaho, LLC

  
	
  Ann & Government Streets–Mobile, Alabama, LLC

  
	
  Central Avenue & Main Street Petal-MS, LLC

  
	
  Eighth and Water Streets–Urichsville, Ohio, LLC

  
	
  Munson & Andrews, LLC

  
	
  Name Rite, L.L.C.

  
	
  Paw Paw Lake Road & Paw Paw Avenue-Coloma, Michigan, LLC

  

 

3

 

	
  Rite Aid Services, L.L.C.

  
	
  Silver Springs Road–Baltimore, Maryland/One, LLC

  
	
  Silver Springs Road–Baltimore, Maryland/Two, LLC

  
	
  State & Fortification Streets–Jackson, Mississippi, LLC

  
	
  State Street and Hill Road–Gerard, Ohio, LLC

  
	
  Tyler and Sanders Roads, Birmingham–Alabama, LLC

  
	
  1740 Associates, LLC

  
	
  Northline & Dix–Toledo–Southgate, LLC

  
	
  Seven Mile and Evergreen–Detroit, LLC

  
	
  764 South Broadway–Geneva, Ohio, LLC

  
	
  Gettysburg and Hoover–Dayton, Ohio, LLC

  
	
  Mayfield & Chillicothe Roads–Chesterland, LLC

  
	
  112 Burleigh Avenue Norfolk, LLC

  
	
  Fairground, L.L.C.

  
	
  JCG (PJC) USA, LLC

  
	
  PJC Dorchester Realty LLC

  
	
  PJC East Lyme Realty LLC

  
	
  PJC Haverhill Realty LLC

  
	
  PJC Hermitage Realty LLC

  
	
  PJC Hyde Park Realty LLC

  
	
  PJC Manchester Realty LLC

  
	
  PJC Mansfield Realty LLC

  
	
  PJC New London Realty LLC

  
	
  PJC Peterborough Realty LLC

  
	
  PJC Providence Realty LLC

  
	
  PJC Realty N.E. LLC

  
	
  PJC Revere Realty LLC

  

 

Limited Partnerships

 

Maxi Drug South, L.P.

 

4

 

Exhibit A

 

[FORM OF FACE OF SECURITY]

 

[Global Securities Legend]

 

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

 

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

 

[Definitive Securities Legend]

 

IN CONNECTION WITH ANY
TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

 

[FORM OF FACE OF SECURITY]

 

	
  No.:                      

  	
  [up to]**$                    

  

 

% Senior Secured Note due 2016

 

CUSIP No.

 

ISIN No.

 

RITE AID CORPORATION, a Delaware
corporation, promises to pay to [Cede & Co.]**, or registered
assigns, the principal sum [of [    ] Dollars]* [as set
forth on the Schedule of Increases or Decreases annexed hereto]** on      , 2016.

 

Interest Payment Dates:                and                ,
commencing on                ,
2008.

 

Record Dates:                and              .

 

*  Insert for Definitive
Securities.

** Insert for Global Securities. 
If the Security is to be issued in global form, add the Global
Securities Legend from Exhibit 1 and the attachment from such Exhibit 1
captioned “TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY”.

 

2

 

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

 

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

 

	
   

  	
  RITE AID CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

 

Dated:

 

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

 

 

as Trustee, certifies

that this is one of

the Securities referred

to in the Indenture.

 

 

	
  By:

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  

 

3

 

[FORM OF REVERSE SIDE OF SECURITY]

 

Senior Secured Note due 2016

 

1.  Interest

 

RITE AID CORPORATION,
a Delaware corporation (such corporation, and its successors and assigns
under the Indenture hereinafter referred to, being herein called the “Company”),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above.  The Company will
pay interest semiannually on           
and            of each year,
commencing           , 2008.  Interest on the Securities will accrue from
the most recent date to which interest has been paid or, if no interest has
been paid, from            2008.  Interest shall be computed on the basis of a
360-day year of twelve 30-day months. 
The Company shall pay interest on overdue principal at the rate per
annum borne by the Securities plus 1% per annum, and it shall pay interest on
overdue installments of interest at the rate per annum borne by the Securities
to the extent lawful.

 

2.  Method of Payment

 

The Company will pay interest
on the Securities (except defaulted interest) to the Persons who are registered
Holders at the close of business on the        
or          next preceding the
interest payment date even if Securities are canceled after the record date and
on or before the interest payment date. 
Holders must surrender Securities to a Paying Agent to collect principal
payments.  The Company will pay principal
and interest in money of the United States of America that at the time of
payment is legal tender for payment of public and private debts.  Payments in respect of the Securities
represented by a Global Security (including principal and interest) will be
made by wire transfer of immediately available funds to the accounts specified
by the Depository.  The Company will make
all payments in respect of a Definitive Security (including principal and interest),
by mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case
of a Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the relevant due
date for payment (or such other date as the Trustee may accept in its
discretion).

 

3.  Paying Agent and Registrar

 

Initially, The Bank of New York
Trust Company, N.A., a banking association organized and existing under the
laws of the United States of America (the “Trustee”), will act as Paying Agent
and Registrar.  The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice.  The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.

 

4

 

4.  Indenture

 

The Company issued the
Securities under an Indenture dated as of            , 2008 (the “Indenture”), among the
Company, the Subsidiary Guarantors named therein and the Trustee.  The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in
effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not
defined in the Securities have the meanings ascribed thereto in the
Indenture.  The Securities are subject to
all such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms.

 

The Securities are unsecured,
unsubordinated obligations of the Company. 
The Company’s obligations under the Securities are Guaranteed, subject
to certain limitations, by the Subsidiary Guarantors pursuant to Subsidiary
Guarantees, subject to release of the Subsidiary Guarantees as provided in the
Indenture or such Subsidiary Guarantee. 
This Security is one of the Original Securities referred to in the
Indenture issued in an aggregate principal amount of $           . 
The Securities include the Original Securities and an unlimited
aggregate principal amount of additional Securities that may be issued under
the Indenture.  The Original Securities
and such additional Securities are treated as a single class of securities
under the Indenture.  The Indenture
imposes certain limitations on the ability of the Company and its Restricted
Subsidiaries to, among other things, make certain Investments and other
Restricted Payments, pay dividends and other distributions, incur Debt, enter
into consensual restrictions upon the payment of certain dividends and
distributions by such Restricted Subsidiaries, enter into or permit certain
transactions with Affiliates, create or incur Liens and make Asset Sales.  The Indenture also imposes limitations on the
ability of the Company and each Subsidiary Guarantor to consolidate or merge
with or into any other Person or sell, transfer, assign, lease, convey or
otherwise dispose of all or substantially all of the Property of the Company or
such Subsidiary Guarantor.

 

5.  Optional Redemption

 

The Company may choose to
redeem the Securities at any time.  If it
does so, it may redeem all or any portion of the Securities, at once or over
time, after giving the required notice under the Indenture.

 

To redeem the Securities prior
to            , 2012, the Company must
pay a redemption price equal to 100% of the principal amount of the Securities
to be redeemed plus the Applicable Premium as of, and accrued and unpaid interest,
if any, to, but not including, the Redemption Date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date that is on or prior to the Redemption
Date).  Any notice to Holders of such a
redemption shall include the appropriate calculation of the Redemption Price,
but need not include the Redemption Price itself.  The actual redemption price must be set forth
in an Officers’ Certificate delivered to the Trustee no later than two Business
Days prior to the Redemption Date.

 

5

 

“Applicable Premium” means,
with respect to any Security on any Redemption Date, the greater of (i) 1.0%
of the principal amount of such Security and (ii) the excess of (A) the
present value at such Redemption Date of (1) the Redemption Price of such
Security at           , 2012 (such
Redemption Price being set forth in the table below) plus (2) all required
interest payments due on such Security through           , 2012 (excluding accrued but unpaid
interest), computed using a discount rate equal to the Treasury Rate on such
Redemption Date plus 75 basis points over (B) the principal amount of such
Security.

 

“Treasury Rate” means, as of
any Redemption Date, the yield to maturity as of such Redemption Date of United
States Treasury securities with a constant maturity (as compiled and published
in the most recent Federal Reserve Statistical Release H.15 (519) that has
become publicly available at least two Business Days prior to the Redemption
Date (or, if such statistical release is no longer published, any publicly
available source of similar market data)) most nearly equal to the period from
the Redemption Date to           , 2012; provided,
however, that if the period from the Redemption Date to           , 2012 is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.

 

On and after           , 2012, the Company may redeem the
Securities in whole at any time or in part from time to time at the following
Redemption Prices (expressed in percentages of principal amount), plus accrued
and unpaid interest, if any, to, but not including, the Redemption Date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant Interest Payment Date that is on or prior
to the Redemption Date), if redeemed during the 12-month period beginning
on            of the years set forth below:

 

	
  Redemption Period

  	
   

  	
  Price

  	
   

  
	
  2012

  	
   

  	
   

  	
  %

  
	
  2013

  	
   

  	
   

  	
  %

  
	
  2014 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

Notwithstanding
the foregoing, at any time and from time to time prior to           , 2011, the Company may redeem up to 35% of
the original aggregate principal amount of the Securities (including Securities
issued after            , 2008, if any)
with the proceeds from one or more Equity Offerings by the Company, at a
Redemption Price equal to       % of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to,
but not including, the Redemption Date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date that is on or prior to the Redemption Date); provided,
however, that after giving effect to any such redemption, at least 65%
of the original aggregate principal amount of the Securities (including
Securities issued after              ,
2008, if any) remains outstanding.  Any
such redemption shall be made within 75 days of such Equity Offering upon not
less than 30 nor more than 60 days’ prior notice.

 

6

 

If the optional Redemption Date
is on or after a record date and on or before the relevant Interest Payment
Date, the accrued and unpaid interest, if any, will be paid to the person or
entity in whose name the Security is registered at the close of business on
that record date, and no additional interest will be payable to Holders whose
Securities shall be subject to repurchase.

 

6.  Sinking Fund

 

The Securities are not subject to any sinking fund.

 

7.  Notice of Redemption

 

Notice of redemption will be
mailed by first-class mail at least 30 days but not more than 60 days
before the redemption date to each Holder of Securities to be redeemed at his
or her registered address.  Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000.  If money sufficient
to pay the redemption price of and accrued interest on all Securities (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.

 

8. (a)       Repurchase of Securities at the Option of Holders upon
Change of Control

 

Upon a Change of Control, any
Holder will have the right, subject to certain conditions specified in the
Indenture, to cause the Company to repurchase all or any part of the Securities
of such Holder at a purchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued and unpaid interest, if any, to, but
not including, the date of purchase (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date that is on or prior to the date of purchase) as provided in, and
subject to the terms of, the Indenture.

 

8. (b)       Prepayment Offer Upon Asset Sale

 

When the aggregate amount of
Excess Proceeds exceeds $50.0 million (taking into account income earned
on such Excess Proceeds, if any), the Company will be required to make an offer
to purchase (the “Asset Sales Prepayment Offer”) the Securities, which offer
shall be in the amount of the Allocable Excess Proceeds, on a pro rata basis
according to principal amount at maturity, at a purchase price equal to 100% of
the principal amount thereof, plus accrued and unpaid interest, if any, to, but
not including, the purchase date (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant Interest
Payment Date), in accordance with the procedures (including prorating in the
event of oversubscription) set forth in the Indenture.  To the extent that any portion of the amount
of Net Available Cash remains after compliance with the preceding sentence and
provided that all Holders have been given the opportunity to tender their
Securities for purchase in accordance with the Indenture, the Company or such Restricted
Subsidiary may use such remaining amount 

 

7

 

for any
purpose permitted by the Indenture and the amount of Excess Proceeds will be
reset to zero.

 

9.  Guarantees; Security

 

The Indenture provides that,
under certain circumstances, the Securities will be guaranteed pursuant to
Subsidiary Guarantees.  Subsidiary
Guarantees may be released in various circumstances, including in certain
circumstances without the consent of Holders.

 

The Indenture provides that,
under certain circumstances, the Securities or Subsidiary Guarantees must be
secured by Liens on certain Property of the Company or Subsidiary
Guarantors.  Liens securing the
Securities or Subsidiary Guarantees may be released in various circumstances,
including in certain circumstances without the consent of Holders.

 

10.  Denominations; Transfer; Exchange

 

The Securities are in
registered form without coupons in denominations of $2,000 and whole multiples
in excess thereof of $1,000.  A Holder
may transfer or exchange Securities in accordance with the Indenture.  Upon any transfer or exchange, the Registrar
and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture.  The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or to transfer or exchange any
Securities for a period of 15 days prior to a selection of Securities to
be redeemed or 15 days before an interest payment date.

 

11.  Persons Deemed Owners

 

The registered Holder of this
Security may be treated as the owner of it for all purposes.

 

12.  Unclaimed Money

 

If money for the payment of
principal or interest remains unclaimed for two years, the Trustee or Paying
Agent shall pay the money back to the Company at its written request unless an
abandoned property law designates another Person.  After any such payment, Holders entitled to
the money must look only to the Company and not to the Trustee for payment.

 

13.  Discharge and Defeasance

 

Subject to certain conditions,
the Company at any time may terminate some of or all its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.

 

8

 

14.  Amendment, Waiver, Deemed Consents,
Releases

 

Subject to certain exceptions
set forth in the Indenture, (i) the Indenture, the Second Priority
Collateral Documents or the Securities may be amended without prior notice to
any Holder but with the written consent of the Holders of at least a majority
in aggregate principal amount of the outstanding Securities and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities.  Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holders, the Company, when authorized by a Board Resolution, the Subsidiary
Guarantors and the Trustee may amend the Indenture or the Securities and,
subject to any other consent required under the terms of the applicable Second
Priority Collateral Documents, the Second Priority Collateral Documents to: (i) cure
any ambiguity, omission, defect or inconsistency; (ii) provide for the
assumption by a successor corporation of the obligations of the Company or any
Subsidiary Guarantor under the Indenture or any Second Priority Collateral
Documents; (iii) provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Securities are described
in Section 163(f)(2)(B) of the Code; (iv) add additional
Guarantees with respect to the Securities or release Subsidiary Guarantors from
Subsidiary Guarantees as provided by the terms of the Indenture or the
Subsidiary Guarantees; (v) further secure the Securities (and if such
security interest includes Liens on Property of the Company, provide for
releases of such Property on terms comparable to the terms on which Collateral
constituting Property of Subsidiary Guarantors may be released), release all or
any portion of the Collateral pursuant to the terms of the Second Priority
Collateral Documents, add to the covenants of the Company or the Subsidiary
Guarantors for the benefit of the Holders or surrender any right or power
conferred upon the Company under the Indenture; (vi) in the case of the
Indenture, make any change that does not adversely affect the rights of any
Holder; (vii) make any change to the subordination provisions of a
Subsidiary Guarantee or any Second Priority Collateral Documents that would
limit or terminate the benefits available to any holder of Senior Obligations
under such provisions; (viii) make any change to comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the Trust Indenture Act; or (iv) to conform the text of the
Indenture or the Securities to any provision of the “Description of Notes”
contained in the Prospectus Supplement.

 

Without limiting the foregoing,
the Holders will be deemed to have consented for purposes of the Second
Priority Collateral Documents (including for purposes of determining actions of
the Second Priority Instructing Group) to (i) any amendment, waiver or
other modification (including any consent thereunder) of the Second Priority
Collateral Documents (including any annexes, exhibits or schedules thereto)
that would not be adverse to the Holders in any material respect, as reasonably
determined by the Board of Directors (as evidenced by a Board Resolution), and (ii) to
specified Second Priority Collateral Documents Amendments.

 

At the request of the Company, the Trustee shall execute and deliver
any documents, instructions or instruments evidencing such deemed consent of
the Holders. The Trustee, in its capacity as Second Priority Representative to
Holders, shall take such 

 

9

 

action under the Second Priority Collateral
Documents as may be requested by the Company to give effect to any such
amendment, waiver or modification.

 

In addition and without limiting the foregoing, (x) Collateral
securing a Subsidiary Guarantee of the Securities or (y) a Subsidiary
Guarantee of the Securities provided by a Subsidiary Guarantor may be released
only in respect of the Securities (i) upon request of the Company without
consent of any Holder unless, within 20 Business Days after written notice of
the proposed release of such (1) Collateral from the Liens securing
Subsidiary Guarantees of the Securities or (2) Subsidiary Guarantor, as
the case may be, is mailed to the Trustee and the Holders, Holders of 25% of
the outstanding principal amount of Securities deliver to the Company a written
objection to such release; or (ii) with the written consent of the Holders
of at least a majority of the aggregate principal amount of the Securities then
outstanding.

 

Under the circumstances described in clauses (i) and (ii) above,
Holders shall also be deemed to have consented to such release for purposes of
any consent required under the Second Priority Collateral Documents (including
for purposes of determining actions of the Second Priority Instructing Group),
subject to any other consent required under the Second Priority Collateral
Documents.

 

At the request of the Company, the Trustee shall execute and deliver
any documents, instructions or instruments evidencing the consent of the
Holders to such release.  The Trustee, in
its capacity as Second Priority Representative for Holders, shall take such
action under the Second Priority Collateral Documents or otherwise as may be
requested by the Company to give effect to any such release.

 

15.  Defaults and Remedies

 

If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding, subject to certain
limitations, may declare all the Securities to be immediately due and
payable.  Certain events of bankruptcy or
insolvency are Events of Default and shall result in the Securities being
immediately due and payable upon the occurrence of such Events of Default
without any further act of the Trustee or any Holder.

 

Holders of Securities may not
enforce the Indenture or the Securities except as provided in the
Indenture.  The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security.  Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power under the Indenture.  The
Holders of a majority in aggregate principal amount of the Securities then
outstanding, by written notice to the Company and the Trustee, may rescind any
declaration of acceleration and its consequences if the rescission would not
conflict with any judgment or decree, and if all existing Events of Default
have been cured or waived except nonpayment of principal, premium or interest
that has become due solely because of the acceleration.

 

10

 

16.  Trustee Dealings with the Company

 

Subject to certain limitations
imposed by the TIA,  the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

 

17.  No Recourse Against Others

 

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

 

18.  Successors

 

Subject to certain exceptions
set forth in the Indenture, when a successor assumes all the obligations of its
predecessor under the Securities and the Indenture in accordance with the terms
of the Indenture, the predecessor will be released from those obligations.

 

19.  Authentication

 

This Security shall not be
valid until an authorized signatory of the Trustee (or an authenticating agent)
manually signs the certificate of authentication on the other side of this
Security.

 

20.  Abbreviations

 

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

 

21.  Governing Law

 

THIS SECURITY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW.

 

22.  CUSIP Numbers

 

Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be 

 

11

 

printed on the
Securities and has directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Securityholders. 
No representation is made as to the accuracy of such numbers either as
printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.

 

The
company will furnish to any holder upon written request and without charge to
the holder a copy of the indenture which has in it the text of this security.

 

12

 

ASSIGNMENT FORM

 

To assign this Security, fill
in the form below:

 

I or we assign and transfer
this Security to

 

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

 

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

 

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

 

	
   

  
	
   

  
	
  Date:

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  
	
   

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

  

 

	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

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

  	
   

  	
  Signature of Signature Guarantee

  
				

 

 

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL
SECURITY

 

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

 

	
   

  	
   

  	
  Amount of decrease in

  	
   

  	
  Amount of increase in

  	
   

  	
  Principal amount of this

  	
   

  	
  Signature of authorized

  
	
  Date
  of

  	
   

  	
  Principal Amount of this

  	
   

  	
  Principal Amount of this

  	
   

  	
  Global Security following

  	
   

  	
  signatory of Trustee or

  
	
  Exchange

  	
   

  	
  Global Security

  	
   

  	
  Global Security

  	
   

  	
  such decrease or increase

  	
   

  	
  Securities Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have
this Security purchased by the Company pursuant to Section 4.06 (Asset
Sale) or 4.13 (Change of Control) of the Indenture, check the box:

 

o

 

If you want to elect to have
only part of this Security purchased by the Company pursuant to Section 4.06
or 4.13 of the Indenture, state the amount:

 

$

 

	
  Date:

  	
   

  	
  Your
  Signature:

  	
   

  

 

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

 

	
  Signature Guarantee:

  	
   

  

 

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

 

3Exhibit 10.29

 

UNIT

SUBSCRIPTION AGREEMENT

 

June 6, 2008

 

The
undersigned, CPP INVESTMENT BOARD (USRE II) INC. (the
“Subscriber”), hereby agrees to subscribe for and purchase from NOBLE ENVIRONMENTAL POWER, LLC, a Delaware limited liability
company (the “Company”), and the Company hereby agrees to sell and issue
to the Subscriber, the number of Series B preferred units (the “Preferred
Units”) of the Company set forth on the Subscriber’s signature page hereto
(such Preferred Units to be issued, the “Purchased Units”) in
consideration of the payment to the Company of $100.00 per Purchased Unit (the “Subscription
Price”), the sufficiency of which is hereby acknowledged.

 

Within
two Business Days (as “Business Days” is used and defined in the Fourth
Amended and Restated Limited Liability Company Operating Agreement of the
Company, dated May 5, 2008, as amended from time to time (the “Operating
Agreement”)) of the date hereof, the Subscriber shall deposit the
Subscription Price into an account identified to the Subscriber by the Company
(the “Deposit Account”) by wire transfer of immediately available
funds.  Once the Subscription Price is
received into the Deposit Account, the Company shall immediately issue the
Purchased Units to the Subscriber without further action.

 

The
Company represents and warrants that the Purchased Units, when issued, will be
duly authorized, validly issued, fully paid and nonassessable.

 

The
Subscriber represents and warrants to the Company that the representations and
warranties of the Subscriber set forth in Section 8 of the
Operating Agreement of the Company are true and correct in all material
respects on and as of the date hereof as if made by the Subscriber on and as of
the date hereof (except to the extent expressly made as of an earlier date, in
which case such representations shall be true and correct in all material
respects as of such earlier date, and except to the extent such representations
and warranties are qualified by materiality, in which case such representations
shall be true and correct).

 

As
evidence of the restrictions on transfer, the following legends will be placed
on the certificates, if any, evidencing the Purchased Units:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS.  THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT OR LAWS.”

 

*****

 

 

IN
WITNESS WHEREOF,
the undersigned have executed this Unit Subscription Agreement as of the date
first written above.

 

	
   

  	
  CPP
  INVESTMENT BOARD (USRE II) INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Wiseman

  	
   

  
	
   

  	
  Name: Mark Wiseman

  	
   

  
	
   

  	
  Title: Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Andre Bourbonnais

  	
   

  
	
   

  	
  Name: Andre Bourbonnais

  	
   

  
	
   

  	
  Title: Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOBLE ENVIRONMENTAL POWER, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Walter Q. Howard

  	
   

  
	
   

  	
  Name: Walter Q. Howard

  	
   

  
	
   

  	
  Title: President

  	
   

  

 

Number
of Series B Preferred Units subscribed for:

500,000

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