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Exhibit 10.24    
    

 
 

AMENDMENT NUMBER TWO TO AMENDED AND RESTATED
  LOAN AND SECURITY AGREEMENT    
    

        THIS AMENDMENT NUMBER TWO TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of September 17, 2003 (the "Execution Date"), is entered into between and
among, the lenders identified on the signature pages hereof (such lenders, together with their respective successors and assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders"), WELLS FARGO FOOTHILL,
INC., a California corporation, as the arranger and administrative agent for the Lenders ("Agent" and together with the Lenders,
collectively, the "Lender Group"), SILICON GRAPHICS, INC., a Delaware corporation
("Parent"), and each of Parent's Subsidiaries identified on the signature pages hereof (such Subsidiaries, together with Parent, are referred to
hereinafter each individually as a "Borrower," and individually and collectively, jointly and severally, as
"Borrowers"), in light of the following: 

W I T N E S S E T H  

        WHEREAS, Borrower and the Lender Group are parties to that certain Amended and Restated Loan and Security Agreement, dated as of September 20, 2002 (as
amended, restated, supplemented, or modified from time to time, the "Loan Agreement"); 

        WHEREAS,
Borrower has requested that Agent waive non-compliance with a certain financial covenant and that the Loan Agreement be amended to provide for, among other things, a reset of
certain financial covenants; and 

        WHEREAS,
subject to the satisfaction of the conditions set forth herein, the Lender Group is willing to so consent to the amendment of the Loan Agreement. 

        NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to amend the Loan Agreement as follows: 

        1.     DEFINITIONS.    Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed
to them in the Loan Agreement, as amended hereby. 

        2.     AMENDMENTS TO LOAN AGREEMENT.

        (a)   Section 6.3(a)(iii) of the Loan Agreement is hereby amended and restated in its entirety as follows: 

        '(iii) a
Compliance Certificate demonstrating, in reasonable detail (including detailed calculations of Borrowers' compliance or non-compliance with the financial covenants
in Section 7.20) compliance at the end of such quarter with the applicable financial covenants contained in  Section 7.20, and" 

        (b)   Section 7.20(a) of the Loan Agreement is hereby amended and restated in its entirety as follows: 

        "Minimum EBITDA.    EBITDA, measured on a fiscal quarter-end basis, of not less than the required amount set forth in the
following table for the applicable period set forth opposite thereto: 

	Applicable Amount
 
	 	Applicable Period
 

	 	 Waived	 	For the 3 month period ending June 27, 2003
	$	(45,882,000	)	For the 3 month period ending September 26, 2003
	$	11,200,000	 	For the 3 month period ending December 26, 2003
	$	3,900,000	 	For the 3 month period ending March 26, 2004
	$	18,500,000	 	For the 3 month period ending June 25, 2004

 

provided, however, that the required amount of EBITDA for each 3 month period ending after June 25, 2004 shall be set by Agent at a
discount to projected EBITDA following receipt of and based upon applicable Projections satisfactory to the Lender Group. In all cases, all non-cash restructuring charges or reversals (or releases) of
any accruals for each applicable period will be eliminated in the calculation of EBITDA for purposes of determining compliance with the covenants in  Section 7.20(a)." 

        (c)   Section 7.20(d) of the Loan Agreement is hereby deleted in its entirety and replaced by the following: 

        "Minimum Cash Held By Agent.    At all times during the term of this Agreement, cash of Parent and its Subsidiaries, determined
on a consolidated basis, which cash will be held by Agent in an interest bearing account maintained by Agent, in an amount equal to the greater of (i) the amount by which the Obligations exceed
the Borrowing Base and (ii) $10,000,000." 

        (d)   Schedule E-1 of the Loan Agreement is hereby amended and restated in its entirety as attached hereto
as Schedule E-1. 

        3.     LIMITED WAIVER.

        (a)   Agent
grants to Borrowers a limited one-time waiver of Section 7.20(a) of the Loan Agreement with respect only to
Borrowers' fiscal quarter ended June 27, 2003. 

        (b)   This
waiver is not a waiver of any subsequent Default or Event of Default of the same provisions of the Loan Agreement, nor is it a waiver of any other current or future
Default or Event of Default. Agent is not obligated to provide this or any other waiver of its default rights. 

        4.     CONDITIONS PRECEDENT TO THIS AMENDMENT.    The satisfaction of each of the following shall constitute conditions
precedent to the effectiveness of this Amendment and each and every provision hereof: 

        (a)   The
representations and warranties in the Loan Agreement and the other Loan Documents shall be true and correct in all respects on and as of the date hereof, as though
made on such date (except to the extent that such representations and warranties relate solely to an earlier date); 

        (b)   No
Default or Event of Default shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment; 

        (c)   No
injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein shall
have been issued and remain in force by any Governmental Authority against Borrower or the Lender Group; and 

        (d)   Lender
shall have received from Borrower an amendment fee (the "Amendment Fee") in the amount of $35,000, receipt of
$15,000 of which is hereby acknowledged. 

Upon
Agent's receipt of a copy of this Amendment executed by Borrowers, Agent shall be authorized to charge Borrowers' Loan Account the amount of $20,000, constituting the unpaid balance of the
Amendment Fee; said $20,000 shall be non-refundable when charged. 

        5.     CONDITION SUBSEOUENT.    The satisfaction of the following shall constitute a condition subsequent to the
effectiveness of this Amendment and each and every provision hereof: 

        (a)   No
later than October 1, 2003, Administrative Borrower shall deliver to Agent a Landlord's Waiver, in form satisfactory to Agent, for the premises located at
2701 Olson Drive, Chippewa Falls, Wisconsin 54729, duly executed by the landlord thereof. 

2

 

        (b)   No
later than October 1, 2003, Administrative Borrower shall deliver to Agent a revised  Schedule P-1 to the Loan Agreement which shall reflect only the following changes from the original 
Schedule P-1: 

        (i)    additional
Liens to secure the IP Loans, subject to the Intercreditor Agreement; and 

        (ii)   deletion
of those Permitted Liens which are no longer existing or required. 

Upon
delivery to Agent, this revised Schedule P-1 shall constitute an amended and restated  Schedule P-1 to the Loan Agreement. 

        (c)   No
later than October 1, 2003, Administrative Borrower shall deliver to Agent the information required to be set forth on  Schedule A-1 attached to Amendment Number One to Amended and
Restated Loan and Security Agreement, dated as of
April 11, 2003, between and among the parties hereto. 

        6.     CONSTRUCTION.    THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF CALIFORNIA. 

        7.     ENTIRE AMENDMENT; EFFECT OF AMENDMENT.    This Amendment, and terms and provisions hereof, constitute the entire
agreement among the parties pertaining to the subject matter hereof and supersedes any and all prior or contemporaneous amendments relating to the subject matter hereof. Except for the amendments to
the Loan Agreement expressly set forth in Section 2 hereof, the Loan Agreement and other Loan Documents shall remain unchanged and in full force
and effect. To the extent any terms or provisions of this Amendment conflict with those of the Loan Agreement or other Loan Documents, the terms and provisions of this Amendment shall control. This
Amendment is a Loan Document. 

        8.     COUNTERPARTS; TELEFACSIMILE EXECUTION.    This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery of an executed counterpart of this
Amendment by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by
telefacsimile also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment. 

        9.     MISCELLANEOUS.

        (a)   Upon
the effectiveness of this Amendment, each reference in the Loan Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like import referring to
the Loan Agreement shall mean and refer to the Loan Agreement as amended by this Amendment. 

        (b)   Upon
the effectiveness of this Amendment, each reference in the Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or words of like import
referring to the Loan Agreement shall mean and refer to the Loan Agreement as amended by this Amendment. 

3

 

        IN
WITNESS WHEREOF. the parties have caused this Amendment to be executed and delivered as of the date first written above. 

	

 	
 	

WELLS FARGO FOOTHILL, INC.,

a California corporation, as Agent and as a Lender
	

 	
 	

By:	
 	

/s/  THOMAS P. SHUGHRUE      

	 	 	Name:	 	Thomas P. Shughrue
	 	 	Title:	 	Vice President
	

 	
 	

SILICON GRAPHICS, INC.,

a Delaware Corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	Jean Furter
	 	 	Title:	 	Vice President
	

 	
 	

SILICON GRAPHICS FEDERAL, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	Jeff Zellmer
	 	 	Title:	 	Vice President

4

 

        IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered as of the date first written above. 

	

 	
 	

WELLS FARGO FOOTHILL, INC.,

a California corporation, as Agent and as a Lender
	

 	
 	

By:	
 	

	 	 	Name:	 	 
	 	 	Title:	 	 
	

 	
 	

SILICON GRAPHICS, INC.,

a Delaware Corporation
	

 	
 	

By:	
 	

/s/  JEAN FURTER      

	 	 	Name:	 	Jean Furter
	 	 	Title:	 	Vice President, Treasurer
	

 	
 	

SILICON GRAPHICS FEDERAL, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

/s/  JEFF ZELLMER      

	 	 	Name:	 	Jeff Zellmer
	 	 	Title:	 	Vice President

5

 
 

Schedule E-l
  
    ELIGIBLE INVENTORY LOCATIONS    
    

2701
Olson Drive

Chippewa Falls, Wisconsin 54729 

Riverside
Systems Building

100 N. Cashman Drive

Chippewa Falls, Wisconsin 

UPS
Service Parts Logistics, Inc.

2200 Outer Loop Road

Louisville, Kentucky 

QuickLinks

Exhibit 10.24

AMENDMENT NUMBER TWO TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Schedule E-l ELIGIBLE INVENTORY LOCATIONSExhibit
4.1

 

 

 

KINETIC CONCEPTS,
INC.,

as Issuer

 

 

and

 

 

The GUARANTORS
named herein,

 

 

and

 

 

U.S. BANK NATIONAL
ASSOCIATION,

as Trustee

 

 

 

Indenture

 

Dated as of
August 11, 2003

 

 

 

$205,000,000

 

 

73/8%
Senior Subordinated Notes due 2013

 

 

 

 

CROSS-REFERENCE
TABLE

 

TO
TRUST INDENTURE ACT (“TIA”)

 

	
  TIA

  	
   

  	
  Indenture
  Section

  
	
  310(a)(1) & (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.10; 7.11 

  
	
  (b)

  	
   

  	
  7.08; 7.10; 13.02 

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a) & (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b) & (c)

  	
   

  	
  13.03

  
	
  313(a), (b)(1) &
  (b)(2)

  	
   

  	
  7.06

  
	
  (c)

  	
   

  	
  7.06; 13.02 

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.06; 4.08; 13.02 

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1) & (c)(2)

  	
   

  	
  7.02; 13.04 

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  13.05

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01(2) 

  
	
  (b)

  	
   

  	
  7.05; 13.02 

  
	
  (c)

  	
   

  	
  7.01(1) 

  
	
  (d)

  	
   

  	
  6.05; 7.01(3) 

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a)(last sentence)

  	
   

  	
  2.09

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.07

  
	
  (c)

  	
   

  	
  9.04

  
	
  317(a)(1)

  	
   

  	
  6.08

  
	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.04

  
	
  318(a) & (c)

  	
   

  	
  13.01

  

 

N.A. means Not Applicable

 

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

 

i

 

TABLE
OF CONTENTS

 

	
  ARTICLE
  ONE

  DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  
	
  SECTION 1.01. Definitions.

  
	
  SECTION 1.02. Incorporation by Reference
  of TIA

  
	
  SECTION 1.03. Rules of Construction

  
	
   

  
	
  ARTICLE
  TWO

  THE NOTES

  
	
   

  
	
  SECTION 2.01. Form and Dating

  
	
  SECTION 2.02. Execution and
  Authentication; Aggregate Principal Amount

  
	
  SECTION 2.03. Registrar and Paying Agent

  
	
  SECTION 2.04. Paying Agent To Hold Assets
  in Trust

  
	
  SECTION 2.05. Holder Lists

  
	
  SECTION 2.06. Transfer and Exchange

  
	
  SECTION 2.07. Replacement Notes

  
	
  SECTION 2.08. Outstanding Notes

  
	
  SECTION 2.09. Treasury Notes

  
	
  SECTION 2.10. Temporary Notes

  
	
  SECTION 2.11. Cancellation

  
	
  SECTION 2.12. Defaulted Interest

  
	
  SECTION 2.13. CUSIP Number

  
	
  SECTION 2.14. Deposit of Monies

  
	
  SECTION 2.15. Restrictive Legends

  
	
  SECTION 2.16. Book-Entry Provisions for
  Global Note.

  
	
  SECTION 2.17. Registration of Transfers
  and Exchanges.

  
	
  SECTION 2.18. Liquidated Damages Under
  Registration Rights Agreement

  
	
   

  
	
  ARTICLE
  THREE

  REDEMPTION

  
	
   

  
	
  SECTION 3.01. Notices to Trustee

  
	
  SECTION 3.02. Selection of Notes To Be
  Redeemed

  
	
  SECTION 3.03. Optional Redemption

  
	
  SECTION 3.04. Notice of Redemption

  
	
  SECTION 3.05. Effect of Notice of
  Redemption

  
	
  SECTION 3.06. Deposit of Redemption Price

  
	
  SECTION 3.07. Notes Redeemed in Part

  
	
   

  
	
  ARTICLE FOUR

  COVENANTS

  
	
   

  
	
  SECTION 4.01. Payment of Notes.

  
	
  SECTION 4.02. Maintenance of Office or
  Agency

  

 

ii

 

	
  SECTION 4.03. Corporate Existence

  
	
  SECTION 4.04. Payment of Taxes and Other
  Claims

  
	
  SECTION 4.05. Maintenance of Properties
  and Insurance.

  
	
  SECTION 4.06. Compliance Certificate;
  Notice of Default.

  
	
  SECTION 4.07. Compliance with Laws

  
	
  SECTION 4.08. Reports to Holders

  
	
  SECTION 4.09. Waiver of Stay, Extension or
  Usury Laws

  
	
  SECTION 4.10. Limitation on Restricted
  Payments

  
	
  SECTION 4.11. Limitation on Transactions
  with Affiliates.

  
	
  SECTION 4.12. Limitation on Incurrence of
  Additional Indebtedness

  
	
  SECTION 4.13. Limitation on Dividend and
  Other Payment Restrictions Affecting Restricted Subsidiaries

  
	
  SECTION 4.14. Limitation on Restricted and
  Unrestricted Subsidiaries.

  
	
  SECTION 4.15. Change of Control.

  
	
  SECTION 4.16. Limitation on Asset Sales.

  
	
  SECTION 4.17. Limitation on Preferred
  Stock of Restricted Subsidiaries

  
	
  SECTION 4.18. Limitation on Liens Securing
  Indebtedness

  
	
  SECTION 4.19. Intentionally Omitted

  
	
  SECTION 4.20. Additional Subsidiary
  Guarantees

  
	
  SECTION 4.21. Prohibition on Incurrence of
  Senior Subordinated Debt

  
	
  SECTION 4.22. Limitation on Repurchase of
  Equity Interests from Employees

  
	
  SECTION 4.23. Special Redemption

  
	
   

  
	
  ARTICLE FIVE

  SUCCESSOR CORPORATION

  
	
   

  
	
  SECTION 5.01. Merger, Consolidation and
  Sale of Assets.

  
	
  SECTION 5.02. Successor Corporation Substituted

  
	
   

  
	
  ARTICLE SIX

  REMEDIES

  
	
   

  
	
  SECTION 6.01. Events of Default

  
	
  SECTION 6.02. Acceleration.

  
	
  SECTION 6.03. Other Remedies

  
	
  SECTION 6.04. Waiver of Past Defaults

  
	
  SECTION 6.05. Control by Majority

  
	
  SECTION 6.06. Limitation on Suits

  
	
  SECTION 6.07. Right of Holders To Receive
  Payment

  
	
  SECTION 6.08. Collection Suit by Trustee

  
	
  SECTION 6.09. Trustee May File Proofs
  of Claim

  
	
  SECTION 6.10. Priorities

  
	
  SECTION 6.11. Undertaking for Costs

  
	
  SECTION 6.12. Restoration of Rights and
  Remedies

  
	
   

  
	
  ARTICLE SEVEN

  TRUSTEE

  
	
   

  
	
  SECTION 7.01. Duties of Trustee.

  
	
  SECTION 7.02. Rights of Trustee

  

 

iii

 

	
  SECTION 7.03. Individual Rights of Trustee

  
	
  SECTION 7.04. Trustee’s Disclaimer

  
	
  SECTION 7.05. Notice of Default

  
	
  SECTION 7.06. Reports by Trustee to
  Holders

  
	
  SECTION 7.07. Compensation and Indemnity

  
	
  SECTION 7.08. Replacement of Trustee

  
	
  SECTION 7.09. Successor Trustee by Merger,
  Etc

  
	
  SECTION 7.10. Eligibility;
  Disqualification

  
	
  SECTION 7.11. Preferential Collection of
  Claims Against the Company

  
	
   

  
	
  ARTICLE EIGHT

  DISCHARGE OF INDENTURE; DEFEASANCE

  
	
   

  
	
  SECTION 8.01. Termination of Company’s
  Obligations

  
	
  SECTION 8.02. Application of Trust Money

  
	
  SECTION 8.03. Repayment to the Company

  
	
  SECTION 8.04. Reinstatement

  
	
  SECTION 8.05. Acknowledgment of Discharge
  by Trustee

  
	
   

  
	
  ARTICLE NINE

  MODIFICATION OF THIS INDENTURE

  
	
   

  
	
  SECTION 9.01. Without Consent of Holders

  
	
  SECTION 9.02. With Consent of Holders

  
	
  SECTION 9.03. Compliance with TIA

  
	
  SECTION 9.04. Revocation and Effect of
  Consents

  
	
  SECTION 9.05. Notation on or Exchange of
  Notes

  
	
  SECTION 9.06. Trustee To Sign Amendments,
  Etc

  
	
   

  
	
  ARTICLE TEN

  SUBORDINATION

  
	
   

  
	
  SECTION 10.01. Notes Subordinated to
  Senior Debt

  
	
  SECTION 10.02. Suspension of Payment When
  Senior Debt Is in Default.

  
	
  SECTION 10.03. Notes Subordinated to
  Prior Payment of All Senior Debt on Dissolution, Liquidation or Reorganization
  of Company.

  
	
  SECTION 10.04. Holders To Be Subrogated
  to Rights of Holders of Senior Debt

  
	
  SECTION 10.05. Obligations of the Company
  Unconditional

  
	
  SECTION 10.06. Trustee Entitled to Assume
  Payments Not Prohibited in Absence of Notice

  
	
  SECTION 10.07. Application by Trustee of
  Assets Deposited with It

  
	
  SECTION 10.08. No Waiver of Subordination
  Provisions.

  
	
  SECTION 10.09. Holders Authorize Trustee
  To Effectuate Subordination of Notes

  
	
  SECTION 10.10. Right of Trustee to Hold
  Senior Debt

  
	
  SECTION 10.11. This Article Ten Not
  To Prevent Events of Default

  
	
  SECTION 10.12. No Fiduciary Duty of
  Trustee to Holders of Senior Debt

  
	
   

  
	
  ARTICLE ELEVEN

  GUARANTEE OF NOTES

  
	
   

  
	
  SECTION 11.01. Unconditional Guarantee

  

 

iv

 

	
  SECTION 11.02. Limitations on Guarantees

  
	
  SECTION 11.03. Execution and Delivery of
  Guarantee

  
	
  SECTION 11.04. Release of a Guarantor.

  
	
  SECTION 11.05. Waiver of Subrogation

  
	
  SECTION 11.06. No Set-Off

  
	
  SECTION 11.07. Obligations Absolute

  
	
  SECTION 11.08. Obligations Continuing

  
	
  SECTION 11.09. Obligations Not Reduced

  
	
  SECTION 11.10. Obligations Reinstated

  
	
  SECTION 11.11. Obligations Not Affected

  
	
  SECTION 11.12. Waiver

  
	
  SECTION 11.13. No Obligation To Take
  Action Against the Company

  
	
  SECTION 11.14. Dealing with the Company
  and Others

  
	
  SECTION 11.15. Default and Enforcement

  
	
  SECTION 11.16. Amendment, Etc

  
	
  SECTION 11.17. Acknowledgment

  
	
  SECTION 11.18. Costs and Expenses

  
	
  SECTION 11.19. No Merger or Waiver;
  Cumulative Remedies

  
	
  SECTION 11.20. Survival of Obligations

  
	
  SECTION 11.21. Guarantee in Addition to
  Other Obligations

  
	
  SECTION 11.22. Severability

  
	
  SECTION 11.23. Successors and Assigns

  
	
   

  
	
  ARTICLE TWELVE

  SUBORDINATION OF GUARANTEE

  
	
   

  
	
  SECTION 12.01. Obligations of Guarantors
  Subordinated to Guarantor Senior Debt

  
	
  SECTION 12.02. Suspension of Guarantee
  Obligations When Guarantor Senior Debt Is in Default.

  
	
  SECTION 12.03. Guarantee Obligations
  Subordinated to Prior Payment of All Guarantor Senior Debt on Dissolution,
  Liquidation or Reorganization of Such Guarantor.

  
	
  SECTION 12.04. Holders of Guarantee
  Obligations To Be Subrogated to Rights of Holders of Guarantor Senior Debt

  
	
  SECTION 12.05. Obligations of the
  Guarantors Unconditional

  
	
  SECTION 12.06. Trustee Entitled To Assume
  Payments Not Prohibited in Absence of Notice

  
	
  SECTION 12.07. Application by Trustee of
  Assets Deposited with It

  
	
  SECTION 12.08. No Waiver of Subordination
  Provisions.

  
	
  SECTION 12.09. Holders Authorize Trustee
  To Effectuate Subordination of Guarantee Obligations

  
	
  SECTION 12.10. Right of Trustee To Hold
  Guarantor Senior Debt

  
	
  SECTION 12.11. No Suspension of Remedies

  
	
  SECTION 12.12. No Fiduciary Duty of
  Trustee to Holders of Guarantor Senior Debt

  
	
   

  
	
  ARTICLE
  THIRTEEN MISCELLANEOUS

  
	
   

  
	
  SECTION 13.01. TIA Controls

  
	
  SECTION 13.02. Notices

  

 

v

 

	
  SECTION 13.03. Communications by Holders
  with Other Holders

  
	
  SECTION 13.04. Certificate and Opinion as
  to Conditions Precedent

  
	
  SECTION 13.05. Statements Required in
  Certificate or Opinion

  
	
  SECTION 13.06. Rules by Trustee, Paying
  Agent, Registrar

  
	
  SECTION 13.07. Legal Holidays

  
	
  SECTION 13.08. Governing Law

  
	
  SECTION 13.09. No Adverse Interpretation
  of Other Agreements

  
	
  SECTION 13.10. No Personal Liability

  
	
  SECTION 13.11. Successors

  
	
  SECTION 13.12. Duplicate Originals

  
	
  SECTION 13.13. Severability

  
	
  SECTION 13.14. Table of Contents,
  Headings, Etc.

  

 

vi

 

INDENTURE, dated as of August 11, 2003, among
Kinetic Concepts, Inc., a Texas corporation (the “Company”), each of the
Guarantors listed on the signature pages hereto, as guarantors, and U.S. Bank
National Association as Trustee (the “Trustee”).

 

The Company has duly authorized the creation of an
issue of 73/8% Senior Subordinated Notes due 2013, Series
A, to be issued and, to provide therefor, the Company has duly authorized the
execution and delivery of this Indenture. 
The Guarantors have duly authorized the guarantee of the Notes (as
defined herein) jointly and severally on an unsecured senior subordinated
basis.

 

All things necessary to make the Notes, when duly
issued and executed by the Company, and authenticated and delivered hereunder,
the valid obligations of the Company, and to make this Indenture a valid and
binding agreement of the Company and each of the Guarantors, have been done.

 

Each party hereto agrees as follows for the benefit of
the other parties and for the equal and ratable benefit of the Holders (as
defined herein) of the Company’s 73/8% Senior
Subordinated Notes due 2013.

 

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01.  Definitions.

 

“Acceleration Notice” has the meaning provided
in Section 6.02.

 

“Acquired Indebtedness” means Indebtedness of a
Person or any of its Subsidiaries (1) existing at the time such Person
becomes a Restricted Subsidiary of the Company or at the time it merges or
consolidates with the Company or any of its Restricted Subsidiaries or
(2) which becomes Indebtedness of the Company or a Restricted Subsidiary
in connection with the acquisition of assets from such Person, and in each case
not incurred by such Person or its Subsidiary in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
of the Company or such acquisition, merger or consolidation.

 

“Additional Interest” shall have the meaning
set forth in the Registration Rights Agreement.

 

“Additional Notes” means Notes having identical
terms and conditions to the Initial Notes, which may be issued in one or more
series from time to time, subject to Section 4.12.

 

“Affiliate” means, with respect to any
specified Person, any other Person who directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, such specified Person.  The term
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms “controlling” and “controlled” have meanings correlative of the
foregoing.

 

1

 

“Affiliate Transaction” has the meaning
provided in Section 4.11.

 

“Agent” means any Registrar, Paying Agent or
co-Registrar.

 

“Agent Members” has the meaning provided in Section 2.16.

 

“Asset Acquisition” means (1) an Investment by
the Company or any Restricted Subsidiary of the Company in any other Person
pursuant to which such Person shall become a Restricted Subsidiary of the
Company or any Restricted Subsidiary of the Company, or shall be merged with or
into the Company or any Restricted Subsidiary of the Company, or (2) the
acquisition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person (other than a Restricted Subsidiary of the Company) which
constitute all or substantially all of the assets of such Person or comprises
any division or line of business of such Person or any other properties or
assets of such Person other than in the ordinary course of business.

 

“Asset Sale” means any direct or indirect sale,
issuance, conveyance, transfer, lease (other than operating leases entered into
in the ordinary course of business), assignment or other transfer for value by
the Company or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Restricted Subsidiary of
the Company of (1) any Capital Stock of any Restricted Subsidiary of the
Company; or (2) any other property or assets of the Company or any Restricted
Subsidiary of the Company other than in the ordinary course of business; provided, however, that Asset Sales shall
not include (A) a transaction or series of related transactions for which
the Company or its Restricted Subsidiaries receive aggregate consideration of
less than $5.0 million, (B) the sale, lease, conveyance, disposition or
other transfer of all or substantially all of the assets of the Company as
permitted under Section 5.01 or any such disposition that
constitutes a Change of Control, (C) sales of accounts receivable,
equipment and related assets (including contract rights) of the type specified
in the definition of “Qualified Securitization Transaction” to a Securitization
Entity for the fair market value thereof, including cash in an amount at least
equal to 75% of the fair market value thereof, (D) transfers of accounts
receivable, equipment and related assets (including contract rights) of the
type specified in the definition of “Qualified Securitization Transaction” (or
a fractional undivided interest therein) by a Securitization Entity in a
Qualified Securitization Transaction, (E) Investments and Restricted Payments
that are not otherwise prohibited by this Indenture, or (F) the distribution of
any Equity Interests of any Subsidiary of the Company for the purpose of
establishing a holding company structure in compliance with Section 5.01.

 

“Authenticating Agent” has the meaning provided
in Section 2.02.

 

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

 

“Blockage Period” has the meaning provided in Section 10.02.

 

“Board of Directors” means, as to any Person,
the board of directors of such Person or any duly authorized committee thereof,
provided that as the term “Board
of Directors” is used in the definition of “Continuing Directors” it shall
refer only to the board of directors and not to any committee thereof.

 

2

 

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

 

“Business Day” means any day other than a
Saturday, Sunday or any other day on which banking institutions in the city of
New York are required or authorized by law or other governmental action to be
closed.

 

 “Capital
Contribution” means any contribution to the equity of the Company from a
direct or indirect parent of the Company for which no consideration is given.

 

“Capital Stock” means (1) with respect to
any Person that is a corporation, any and all shares, interests, participations
or other equivalents (however designated and whether voting or nonvoting) of
corporate stock, including each class of Common Stock and Preferred Stock of
such Person and (2) with respect to any Person that is not a corporation,
any and all partnership or other equity interests of such Person.

 

“Capitalized Lease Obligation” means, as to any
Person, the obligations of such Person under a lease that are required to be
classified and accounted for as capital lease obligations under GAAP and, for
purposes of this definition, the amount of such obligations at any date shall
be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.

 

“Cash Equivalents” means (1) marketable
direct obligations issued by, or unconditionally guaranteed by, the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within one year from the
date of acquisition thereof; (2) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one of
the four highest ratings obtainable from either Standard & Poor’s
Corporation (“S&P”) or Moody’s Investors Service, Inc.  (“Moody’s”); (3) commercial
paper maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least A-2 from S&P or at
least P-2 from Moody’s; (4) certificates of deposit or bankers’
acceptances maturing within one year from the date of acquisition thereof
issued by any bank organized under the laws of the United States of America or
any state thereof or the District of Columbia or any U.S. branch of a foreign
bank having at the date of acquisition thereof combined capital and surplus of
not less than $100.0 million; (5) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in clause
(1) of this definition entered into with any bank meeting the
qualifications specified in clause (4) of this definition;
(6) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (1) through
(5) of this definition; and (7) investments made by Foreign
Subsidiaries in local currencies in instruments issued by or with entities of
such jurisdiction having correlative attributes to the foregoing.

 

3

 

“Change of Control” means the occurrence of one
or more of the following events: 
(1) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets
of the Company or, after a Holding Company Merger, Parent to any Person (other
than to the Company or a Guarantor) or group of related Persons (other than the
Company and the Guarantors) for purposes of Section 13(d) of the Exchange
Act (a “Group”), together with any Affiliates thereof (whether or not
otherwise in compliance with the provisions of this Indenture); (2) the
approval by the holders of Capital Stock of the Company or, after a Holding
Company Merger, Parent of any plan or proposal for the liquidation or dissolution
of the Company or, after a Holding Company Merger, Parent (whether or not
otherwise in compliance with the provisions of this Indenture); (3) any
Person or Group (other than any of the Permitted Holders(s) or any underwriters
in connection with an offering of Qualified Capital Stock registered under the
Securities Act) shall become the owner, directly or indirectly, beneficially or
of record, of shares representing more than 50% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of the
Company or, after a Holding Company Merger, Parent; or (4) the first day
on which a majority of the members of the Board of Directors of the Company or,
after a Holding Company Merger, Parent are not Continuing Directors.

 

“Change of Control Offer” has the meaning
provided in Section 4.15.

 

“Change of Control Payment Date” has the
meaning provided in Section 4.15.

 

“Collateral” means (1) the Secured
Proceeds Account, (2) the Proceeds and all other cash or Cash Equivalents
deposited in the Secured Proceeds Account from time to time pursuant to Section 4.23,
(3) all of the Company’s and the Guarantors’ rights, title, interest and
privileges with respect to the Secured Proceeds Account and such cash and Cash
Equivalents, (4) all dividends, interest and other payments and
distributions made on or with respect to such Cash Equivalents or the Secured
Proceeds Account and (5) all proceeds of any of the foregoing.

 

“Commission” means the Securities and Exchange
Commission.

 

“Common Stock” of any Person means any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or non-voting) of such Person’s common stock,
whether outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.

 

“Company” means the party named as such in this
Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor and also includes for the purposes of any
provision contained herein and required by the TIA any other obligor on the
Notes.

 

“Comparable Treasury Issue” means the U.S.
Treasury security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Notes that would be utilized
at the time of selection and in accordance with customary financial practice in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes.  “Independent
Investment Banker” means Morgan Stanley & Co.

 

4

 

Incorporated or, if such
firm is unwilling or unable to select the Comparable Treasury Issue, an
investment banking firm of national reputation selected by the Company.

 

“Comparable Treasury Price” means, with respect
to a redemption date, (1) the average of the Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations for such redemption date, or (2) if
the Company obtains fewer than three such Reference Security Dealer Quotations,
the average of all such quotations.

 

“Consolidated EBITDA” means, with respect to
any Person, for any period, the sum (without duplication) of
(1) Consolidated Net Income, and (2) to the extent Consolidated Net
Income has been reduced thereby, (A) all income taxes of such Person and its
Restricted Subsidiaries paid or accrued in accordance with GAAP for such period
(other than income taxes attributable to extraordinary, unusual or nonrecurring
gains or losses or taxes attributable to sales or dispositions outside the
ordinary course of business) and any payments to the Parent pursuant to clause
(10) of the last paragraph of Section 4.10, (B) Consolidated
Interest Expense, (C) the aggregate charges for depreciation, amortization
and impairment of goodwill or intangible assets of such Person and its
Restricted Subsidiaries for such period, (D) the unrealized foreign currency
losses of such Person and it Restricted Subsidiaries for such period, (E) other
non-cash charges of such Person and its Restricted Subsidiaries for such
period, less (i) any non-cash charges increasing Consolidated Net Income during
such period and (ii) the amount of all cash payments made by such Person or any
of its Restricted Subsidiaries during such period, to the extent such payments
relate to non-cash charges that were added back in determining Consolidated
EBITDA for such period or any prior period, (F) for purposes of determining the
Company Consolidated Fixed Charge Coverage Ratio (and the components thereof)
for any Four Quarter Period that includes the Issue Date, the Transaction
Expenses, (G) management fees paid pursuant to the Management Agreement paid
within the twelve-month period immediately prior to the Issue Date; provided that the obligation to pay
management fees under the Management Agreement is terminated prior to
August 31, 2003 and no further payments are made after August 2003,
or required to be made, thereunder, (H) cash expenses for stock option and
stock repurchase for the twelve month period immediately prior to the Issue
Date and cash expenses related thereto incurred on or after the Issue Date, and
(I) research and development expense write-offs during the twelve-month period
immediately prior to the Issue Date; in each case as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in
accordance with GAAP.

 

“Consolidated Fixed Charge Coverage Ratio”
means, with respect to any Person, the ratio of Consolidated EBITDA of such
Person during the four full fiscal quarters (the “Four Quarter Period”)
ending on or prior to the date of the transaction giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio (the “Transaction
Date”) to Consolidated Fixed Charges of such Person for the Four Quarter
Period.  In addition to and without
limitation of the foregoing, for purposes of this definition, “Consolidated
EBITDA” and “Consolidated Fixed Charges” shall be calculated after giving effect
on a pro forma basis for the
period of such calculation to: (1) the incurrence or repayment of any
Indebtedness of such Person or any of its Restricted Subsidiaries (and the
application of the proceeds thereof) giving rise to the need to make such
calculation and any incurrence or repayment of other Indebtedness (and the
application of the proceeds thereof), other than the incurrence or repayment of
Indebtedness

 

5

 

in the ordinary course of
business for working capital purposes pursuant to working capital facilities,
occurring during the Four Quarter Period or at any time subsequent to the last
day of the Four Quarter Period and on or prior to the Transaction Date, as if
such incurrence or repayment, as the case may be (and the application of the
proceeds thereof), occurred on the first day of the Four Quarter Period and
(2) any Asset Sales or Asset Acquisitions (including, without limitation,
any Asset Acquisition giving rise to the need to make such calculation as a
result of such Person or one of its Restricted Subsidiaries (including any
Person who becomes a Restricted Subsidiary as a result of the Asset
Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness and also including any Consolidated EBITDA (provided that such Consolidated EBITDA
shall be included only to the extent includable pursuant to the definition of
“Consolidated Net Income”) attributable to the assets which are the subject of
the Asset Acquisition or Asset Sale during the Four Quarter Period) occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such Asset
Sale or Asset Acquisition (including the incurrence, assumption or liability
for any such Acquired Indebtedness) occurred on the first day of the Four
Quarter Period.  If such Person or any
of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of
a third Person, the preceding sentence shall give effect to the incurrence of
such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of
such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness.  Furthermore, in
calculating “Consolidated Fixed Charges” for purposes of determining the
denominator (but not the numerator) of this “Consolidated Fixed Charge Coverage
Ratio,” (1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (2) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based upon a
factor of a prime or similar rate, a eurocurrency interbank offered rate, or
other rates, then the interest rate in effect on the Transaction Date will be
deemed to have been in effect during the Four Quarter Period; and
(3) notwithstanding clause (1) of this definition, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation of
such agreements.

 

“Consolidated Fixed Charges” means, with
respect to any Person for any period, the sum, without duplication, of
(1) Consolidated Interest Expense, plus (2) the product of (A) the
amount of all dividend payments on any series of Preferred Stock of such Person
(other than (i) dividends paid in Qualified Capital Stock and (ii) dividends on
the Preferred Stock, the net proceeds of which will be used for the
Distribution, to the extent they are paid in kind or accrete, except to the
extent they constitute Disqualified Capital Stock) paid, accrued or scheduled
to be paid or accrued during such period times (B) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
effective consolidated federal, state and local tax rate of such Person,
expressed as a decimal.

 

“Consolidated Interest Expense” means, with
respect to any Person for any period, the sum of, without duplication:  (1) the aggregate of the interest
expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including without
limitation, (A) any amortization of debt discount, (B) the net

 

6

 

costs under Interest Swap
Obligations, (C) all capitalized interest, and (D) the interest portion of any
deferred payment obligation, but excluding amortization or write-off of
deferred financing costs; but, in all cases, excluding dividends on the
Preferred Stock, the net proceeds of which will be used for the Distribution,
to the extent that they are paid in kind or accrete, except to the extent they
constitute Disqualified Capital Stock; and (2) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Net Income” means, with respect to
any Person, for any period, the aggregate net income (or loss) of such Person
and its Restricted Subsidiaries for such period on a consolidated basis,
determined in accordance with GAAP minus, after
the Holding Company Merger, any payments to the Parent pursuant to clause (10)
of Section 4.10; provided that
there shall be excluded therefrom (1) after-tax gains from Asset Sales or
abandonments or reserves relating thereto, (2) after-tax items classified as
extraordinary or nonrecurring gains, (3) the net income (but not loss) of any
Restricted Subsidiary of the referent Person to the extent that the declaration
of dividends or similar distributions by that Restricted Subsidiary of that
income is restricted by a contract, operation of law or otherwise, (4) the net
income of any Person in which the referant Person has an interest, other than a
Restricted Subsidiary of the referent Person, except to the extent of cash
dividends or distributions paid to the referent Person or to a Restricted
Subsidiary of the referent Person by such Person, (5) any restoration to income
of any contingency reserve in accordance with GAAP, except to the extent that
provision for such reserve was made out of Consolidated Net Income accrued at
any time following the Issue Date, (6) income or loss attributable to
discontinued operations (including, without limitation, operations disposed of
during such period whether or not such operations were classified as
discontinued), (7) in the case of a successor to the referent Person by consolidation
or merger or as a transferee of the referent Person’s assets, any earnings of
the successor corporation prior to such consolidation, merger or transfer of
assets, (8) after-tax gains from the installment payment due in
January 2004 in connection with the antitrust litigation settlement with
Hillenbrand Industries, Inc., and (9) tax benefits from the exercise of
employee stock options to the extent proceeds from such exercise are used to
fund the Distribution.

 

“consolidation” means, with respect to any
Person, the consolidation of the accounts of the Restricted Subsidiaries of
such Person with those of such Person, all in accordance with GAAP; provided, however, that “consolidation”
will not include consolidation of the accounts of any Unrestricted Subsidiary
of such Person with the accounts of such Person.  The term “consolidated” has a correlative meaning to the
foregoing.

 

“Continuing Directors” means, as of the date of
determination, any member of the Board of Directors of the Company, or, after a
Holding Company Merger, Parent who (1) was a member of the Board of
Directors of the Company on the date hereof or (2) was nominated for
election or elected to the Board of Directors of the Company, or, after a
Holding Company Merger, Parent, with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.

 

“Corporate Trust Office” means the office of
the Trustee at which at any particular time its corporate trust business shall
be principally administered, which office at the

 

7

 

date of execution of this
Indenture is located at 60 Livingston Ave., St. Paul, Minnesota 55107-2292.

 

“Covenant Defeasance” has the meaning set forth
in Section 8.01.

 

“Credit Agreement” means the Credit Agreement
to be dated on or about the Issue Date, among the Company, the lenders party
thereto in their capacities as lenders thereunder, Morgan Stanley Senior
Funding Inc. as Administrative Agent, and Credit Suisse First Boston, acting
through its Cayman Islands branch, as Syndication Agent, together with the
documents related thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented,
replaced, restated or otherwise modified from time to time, including any
agreement and related documents (including, without limitation, any loan
agreement, note, note purchase agreement and indenture) extending the maturity
of, refinancing, replacing or otherwise restructuring (including increasing the
amount of available borrowings thereunder (provided
that such increase in borrowings is permitted by Section 4.12)
or adding Restricted Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement and related documents or any successor or replacement agreement and
related documents and whether by the same or any other agent, lender, group of
lenders or otherwise and whether through any credit facilities or other
borrowing or lending arrangements, including through issuing senior or
subordinated notes.

 

“Currency Agreement” means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any Restricted Subsidiary of the Company
against fluctuations in currency values.

 

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

 

“Default” means an event or condition the
occurrence of which is, or with the lapse of time or the giving of notice or
both would be, an Event of Default.

 

“Default Notice” has the meaning provided in
Section 10.02.

 

“Depository” means The Depository Trust
Company, its nominees and successors.

 

“Designated Guarantor Senior Debt” means
(1) Indebtedness of any Guarantor under the Credit Agreement and
(2) any other Indebtedness constituting Guarantor Senior Debt which, at
the time of determination, has an aggregate principal amount of at least $25.0
million and is specifically designated in the instrument evidencing such
Guarantor Senior Debt as “Designated Guarantor Senior Debt” by the Guarantor
incurring said Guarantor Senior Debt.

 

“Designated Senior Debt” means
(1) Indebtedness under or in respect of the Credit Agreement and
(2) any other Indebtedness constituting Senior Debt which, at the time of
determination, has an aggregate principal amount of at least $25.0 million and
is specifically designated in the instrument evidencing such Senior Debt as
“Designated Senior Debt” by the Company.

 

8

 

“Disqualified Capital Stock” means that portion
of any Capital Stock which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the final maturity date of the Notes; provided that
any Capital Stock that would not constitute Disqualified Capital Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an “asset sale”
or “change of control” occurring prior to the Stated Maturity of the Notes
shall not constitute Disqualified Capital Stock if the “asset sale” or “change
of control” provisions applicable to such Capital Stock are no more favorable
to the holders of such Capital Stock than the provisions contained in Section 4.16
and Section 4.15 and such Capital Stock specifically provides that
such Person will not repurchase or redeem any such stock pursuant to such
provision prior to the Company’s repurchase of such Notes as are required to be
repurchased pursuant to Section 4.16 and Section 4.15.

 

“Distribution”  means
one or more dividends on, or repurchases or redemptions of, Equity Interests
(including the cash settlement of employee stock options or other employee
incentive plans) prior to March 31, 2004 in an aggregate amount not to
exceed $300.0 million plus (1) net cash proceeds from the sale of Preferred
Stock completed prior to March 31, 2004, (2) the net cash proceeds (on an
after tax basis) received from the installment payment due in January 2004
in connection with the antitrust litigation settlement with Hillenbrand
Industries, Inc., which amount shall not exceed $47.0 million, (3) the
estimated tax benefit to the Company from the recapitalization, including the
exercise or repurchase of stock options in connection therewith, which amount
shall not exceed $40.0 million and (4) the cash proceeds received from the
exercise of stock options repurchased in connection with the recapitalization.

 

“Eligible Investments” has the meaning set
forth in Section 4.23.

 

“Equity Interests”  of
a Person means Capital Stock or partnership, participation or membership
interests of such Person and all warrants, options or other rights to acquire
Capital Stock or partnership, participation or membership interests of such
Person (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock or partnership, participation or membership
interests of such Person).

 

“Equity Offering”  means
any offering of Qualified Capital Stock of the Company.

 

“Event of Default” has the meaning provided in Section 6.01.

 

“Event of Failure” has the meaning provided in Section 4.23.

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended, or any successor statute or statutes thereto.

 

“Exchange Notes” means the 73/8%
Senior Subordinated Notes due 2013 to be issued in exchange for the Initial
Notes pursuant to the Registration Rights Agreement.

 

“Exchange Offer” has the meaning provided in
the Registration Rights Agreement.

 

9

 

“Existing Credit Agreement” means the Credit
Agreement dated November 3, 1997, among the Company, certain subsidiary
borrowers party thereto and the financial institutions named therein, as
amended from time to time.

 

“Existing Notes” means the Company’s 95/8%
Senior Subordinated Notes due 2007, Series A and the 95/8%
Senior Subordinated Notes due 2007, Series B and the related guarantees with
respect to each such series.

 

“fair market value” means, with respect to any
asset or property, the price which could be negotiated in an arm’s-length, free
market transaction, for cash, between a willing seller and a willing and able
buyer, neither of whom is under undue pressure or compulsion to complete the
transaction.  Fair market value shall be
determined by the Board of Directors of the Company acting reasonably and in good
faith.

 

“Final Offering Memorandum” means the Company’s
final offering memorandum with respect to the Notes, dated July 23, 2003.

 

“Fremont” means Fremont Partners, L.P. and its
Affiliates.

 

“Foreign Subsidiary” means any Restricted
Subsidiary of the Company which (1)(A) is not organized under the laws of
the United States, any state thereof or the District of Columbia and
(B) conducts substantially all of its business operations in a country
other than the United States of America or (2) is a holding company whose only
assets are Investments in Person or Persons which meet the criteria specified
in clause (1) of this definition and assets which are incidental to ownership
of such Investment.

 

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

 

“Global Note” has the meaning provided in Section 2.01.

 

“guarantee” means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(2) entered into for purposes of assuring in any other manner the obligee
of such Indebtedness or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part) (but if in
part, only to the extent thereof); provided,
however, that the term “guarantee” shall not include (A)
endorsements for collection or deposit in the ordinary course of business and
(B) guarantees (other than guarantees of Indebtedness) by the Company in
respect of assisting one or more Subsidiaries in the ordinary course of their
respective

 

10

 

businesses, including
without limitation guarantees of trade obligations and operating leases, on
ordinary business terms.  The term
“guarantee” used as a verb has a corresponding meaning.

 

“Guarantee” means the guarantee of the
obligations under this Indenture and the Notes by each of the Guarantors as set
forth in Article Eleven.

 

“Guarantor” means (1) each of the domestic
Subsidiaries of the Company on the Issue Date that has guaranteed the Notes
under this Indenture and (2) each of the Company’s Restricted Subsidiaries
that in the future executes a supplemental indenture in which such Restricted
Subsidiary agrees to be bound by the terms of this Indenture as a Guarantor; provided that any Person constituting a
Guarantor as described in this definition shall cease to constitute a Guarantor
when its respective Guarantee is released in accordance with the terms of this
Indenture.

 

“Guarantor Senior Debt” means, with respect to
any Guarantor, the principal of, premium, if any, and interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy or the
commencement of any bankruptcy, insolvency, reorganization, receivership or
other similar proceeding at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) and fees and expenses (including costs of collection),
indemnity obligations on, and all other amounts and obligations owing in
respect of, any Indebtedness (other than guarantees of the Existing Notes) of a
Guarantor, whether outstanding on the Issue Date or thereafter created, incurred
or assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Guarantee of such Guarantor. 
Without limiting the generality of the foregoing, “Guarantor Senior
Debt” shall also include the principal of, premium, if any, interest (including
any interest accruing subsequent to the filing of a petition of bankruptcy or
the commencement of any bankruptcy, insolvency, reorganization, receivership or
other similar proceeding at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on, and all other amounts owing in respect of, (1) all monetary
obligations of every nature of the Company or such Guarantor under the Credit
Agreement, including, without limitation, obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, commissions,
expenses and indemnities, (2) all Interest Swap Obligations of such Guarantor,
and (3) all obligations of such Guarantor under Currency Agreements, in each
case whether outstanding on the Issue Date or thereafter incurred.  Notwithstanding the foregoing, “Guarantor
Senior Debt” shall not include: (1) any Indebtedness of such Guarantor to
a Subsidiary of such Guarantor or any Affiliate of such Guarantor or any of
such Affiliate’s Subsidiaries, (2) Indebtedness of such Guarantor to, or
guaranteed by such Guarantor on behalf of, any shareholder, director, officer
or employee of such Guarantor or any Restricted Subsidiary of such Guarantor
(including, without limitation, amounts owed for compensation),
(3) Indebtedness to trade creditors and other amounts incurred in
connection with obtaining goods, materials or services, (4) Indebtedness
represented by Disqualified Capital Stock, (5) any liability for federal,
state, local or other taxes owed or owing by such Guarantor, (6) Indebtedness
incurred in violation of the Indenture provisions set forth under Section 4.12
(but, as to any such obligation, no such violation shall be deemed to exist for
purposes of this clause (6) if the holder(s) of such Indebtedness or their
representative and the Trustee shall have received an Officers’ Certificate of
the Company to the effect that the

 

11

 

incurrence of such
Indebtedness does not (or, in the case of revolving credit Indebtedness or
other Indebtedness available to be borrowed under the Credit Agreement after
the date of the initial borrowing thereunder, that the incurrence of the entire
committed amount thereof at the date on which the initial borrowing thereunder
is made would not) violate such provisions of this Indenture),
(7) Indebtedness which, when incurred and without respect to any election
under Section 1111(b) of Title 11, United States Code, is without recourse
to the Company or any Guarantor and (8) any Indebtedness which is, by its
express terms, subordinated in right of payment to any other Indebtedness of
such Guarantor.

 

“Holder” means any holder of Notes.

 

“Holding Company Merger” has the meaning set
forth in Section 5.01.

 

“incur” has the meaning set forth in Section 4.12.

 

“Indebtedness” means with respect to any
Person, without duplication, (1) all Obligations of such Person for
borrowed money, (2) all Obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (3) all Capitalized Lease
Obligations of such Person, (4) all Obligations of such Person issued or
assumed as the deferred purchase price of property, all conditional sale
obligations and all Obligations under any title retention agreement (but
excluding trade accounts payable and other accrued liabilities arising in the
ordinary course of business that are not overdue by 90 days or more or are
being contested in good faith by appropriate proceedings), (5) all
Obligations for the reimbursement of any obligor on any letter of credit, banker’s
acceptance or similar credit transaction, (6) guarantees and other
contingent obligations in respect of Indebtedness of other Persons of the type
referred to in clauses (1) through (5) in this definition and clause
(8) of this definition, (7) all Obligations of any other Person of
the type referred to in clauses (1) through (6) which are secured by
any Lien on any property or asset of such Person, the amount of such Obligation
being deemed to be the lesser of the fair market value of such property or
asset or the amount of the Obligation so secured, (8) all Obligations
under Currency Agreements and Interest Swap Obligations of such Person, and
(9) all Disqualified Capital Stock issued by such Person with the amount
of Indebtedness represented by such Disqualified Capital Stock being equal to
the greater of its voluntary or involuntary liquidation preference and its
maximum fixed repurchase price, but excluding accrued dividends, if any.  For purposes hereof, the “maximum fixed
repurchase price” of any Disqualified Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant
to this Indenture, and if such price is based upon, or measured by, the fair
market value of such Disqualified Capital Stock, such fair market value shall
be determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock.  For
purposes hereof, the amount of any Indebtedness referred to in clause (8) of
this paragraph shall be the net amounts (including by offset of amounts payable
thereunder), including any net termination payments, required to be paid to a
counterparty rather than any notional amount with regard to which payments may
be calculated.

 

“Indenture” means this Indenture, as amended or
supplemented from time to time in accordance with the terms hereof.

 

12

 

“Independent Financial Advisor” means a firm
(1) which does not, and whose directors, officers and employees or
Affiliates do not, have a direct or indirect material financial interest in the
Company and (2) which, in the judgment of the Board of Directors of the
Company, is otherwise independent and qualified to perform the task for which
it is to be engaged, and may include a commercial or investment banking,
appraisal or accounting firm.

 

“Initial Notes” means the 73/8%
Senior Subordinated Notes due 2013, Series A, of the Company issued on the
Issue Date for so long as such securities constitute Restricted Securities.

 

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

 

“interest” means, when used with respect to any
Note, the amount of all interest accruing on such Note, including any
applicable defaulted interest pursuant to Section 2.12 and any
Additional Interest pursuant to the Registration Rights Agreement.

 

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

 

“Interest Swap Obligations” means the
obligations of any Person pursuant to any arrangement with any other Person,
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount in exchange for periodic payments
made by such other Person calculated by applying a fixed or a floating rate of
interest on the same notional amount and shall include, without limitation,
interest rate swaps, caps, floors, collars and similar agreements.

 

“Investment” means, with respect to any Person,
any direct or indirect loan or other extension of credit (including, without
limitation, a guarantee) or Capital Contribution to (by means of any transfer
of cash or other property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition by such Person of
any Capital Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by, any other Person. 
“Investment” shall exclude extensions of trade credit by the Company
and its Restricted Subsidiaries on commercially reasonable terms in accordance
with normal trade practices of the Company or such Restricted Subsidiary, as
the case may be.  For the purposes of Section 4.10,
(1) “Investment” shall include and be valued at the fair market value of the
net assets of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary (proportionate to the
Company’s equity interest in such Subsidiary) and shall exclude, and the aggregate
amount of all Restricted Payments made as Investments since the Issue Date
shall exclude and be reduced by, the fair market value of the net assets of any
Unrestricted Subsidiary (proportionate to the Company’s equity interest in such
Subsidiary) at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary, such exclusion and reduction not to exceed the amount of
Investments previously made by the referant person and its Restricted
Subsidiaries and treated as Restricted Payments, and (2) the amount of any
Investment shall be the original cost of such Investment, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment,

 

13

 

reduced by the payment of
dividends or distributions in connection with such Investment or any other
amounts received in respect of such Investment; provided that no such
payment of dividends or distributions or receipt of any such other amounts
shall reduce the amount of any Investment if such payment of dividends or
distributions or receipt of any such amounts would be included in Consolidated
Net Income. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Common Stock of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, it ceases to be a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Capital Stock of such Restricted
Subsidiary not sold or disposed of.

 

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

 

“Legal Defeasance” has the meaning set forth in
Section 8.01.

 

“Legal Holiday” has the meaning provided in Section 13.07.

 

“Lien” means any lien, mortgage, deed of trust,
pledge, security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof and any agreement to give any security interest).

 

“Make-Whole Premium”  means,
with respect to a Note, the sum of the present values of the remaining
scheduled payments of interest, principal and premium thereon (not including
any portion of such payments of interest accrued as of the date of redemption)
as if the Notes were redeemed on May 15, 2008 pursuant to the first
paragraph of Section 3.03 on such date, discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 50 basis points.

 

“Management Agreement” means the management
agreement among the Company, Fremont and RCBA, in effect on the Issue Date and
includes the amendment expected to be entered into as described in the
Company’s Final Offering Memorandum and which provides for the payment or
accrual of not more than $2,000,000 of compensation annually beginning on
November 1 and ending on October 31 of the following year.

 

“Management Equity Plan” means the Company’s
Management Equity Plan in effect on the Issue Date, as the same may be amended
from time to time, or any successor stock option plan which governs the terms
of stock options which were initially granted under the Management Equity Plan.

 

“Maturity Date” means May 15, 2013.

 

“Marketable Securities” means any security
listed for trading on any U.S. national securities exchange or listed for
quotation on the NASDAQ National Market.

 

“Minimum Tax Withholding” means the amount which
the Company or any of its Restricted Subsidiaries is required to withhold in
connection with employers’ minimum statutory withholding of taxes, including
without limitation, federal and state withholding requirements, and FICA and
Medicare taxes.

 

14

 

“Money Market Funds” means money market funds
having a rating in the highest investment category granted thereby by a
recognized credit rating agency at the time of acquisition, including any fund
for which the Trustee or an Affiliate of the Trustee serves as an investment
advisor, administrator, shareholder servicing agent, custodian or subcustodian,
notwithstanding that (A) the Trustee or an Affiliate of the Trustee charges and
collects fees and expenses from such funds for services rendered (provided that
such charges, fees and expenses are on terms consistent with terms negotiated
at arm’s length) and (B) the Trustee charges and collects fees and expenses for
services rendered, pursuant to this Agreement.

 

“Net Cash Proceeds” means, with respect to any
Asset Sale, the proceeds in the form of cash or Cash Equivalents, including
payments in respect of deferred payment obligations when received in the form
of cash or Cash Equivalents (other than the portion of any such deferred
payment constituting interest), received by the Company or any of its
Restricted Subsidiaries from such Asset Sale net of: (1) reasonable
out-of-pocket expenses and fees relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees and sales
commissions), (2) taxes paid or payable after taking into account any reduction
in consolidated tax liability due to available tax credits or deductions and
any tax sharing arrangements, (3) repayment of Indebtedness that is required to
be repaid in connection with such Asset Sale, and (4) appropriate amounts
(determined by the Company in good faith) to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, against any post closing
adjustments or liabilities associated with such Asset Sale and retained by the
Company or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale.

 

“Net Proceeds Offer” has the meaning provided
in Section 4.16.

 

“Net Proceeds Offer Amount” has the meaning
provided in Section 4.16.

 

“Net Proceeds Offer Payment Date” has the
meaning provided in Section 4.16.

 

“Net Proceeds Offer Trigger Date” has the
meaning provided in Section 4.16.

 

“Non-Recourse Indebtedness” means Indebtedness
secured only by an asset and which is expressly stated to be without recourse
to the Company or its Restricted Subsidiaries from the date of incurrence of
such Indebtedness.

 

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

 

“Obligations” means all obligations for
principal, premium, interest, penalties, fees, commissions, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.

 

“Officer” means, with respect to any Person,
the Chairman of the Board of Directors, the Chief Executive Officer, the
President, any Vice President, the Chief Financial

 

15

 

Officer, the Treasurer,
the Controller, or the Secretary of such Person, or any other officer
designated by the Board of Directors serving in a similar capacity and with
respect to the Trustee or any agent of the Trustee, a Trust Officer.

 

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

 

“Opinion of Counsel” means a written opinion
from legal counsel who is reasonably acceptable to the Trustee complying with
the requirements of Sections 13.04 and 13.05, as they relate to
the giving of an Opinion of Counsel.

 

“Parent”  means,
after the Holding Company Merger, any Person that, directly or indirectly,
holds all or substantially all of the Qualified Capital Stock of the Company.

 

“Paying Agent” has the meaning provided in Section 2.03.

 

“Permanent Disability,”
(1) with respect to any person who is an employee of the Company or any of its
Restricted Subsidiaries, means, and is defined in the same manner as, such term
or similar term is defined in an employment agreement applicable to the
employee, or (2) in the case of a person who does not have an employment
agreement that defines such term or a similar term, means that the person is
unable to perform substantially all of his or her duties as an employee of the
Company or any of its Restricted Subsidiaries by reason of illness or
incapacity for a period of more than six consecutive months, or six months in
the aggregate during any 12-month period, established by medical evidence
reasonably satisfactory to the Company or any of its Restricted Subsidiaries.

 

“Permitted Holder(s)”  means
RCBA, Fremont, James R. Leininger, M.D. and his Affiliates and, after the
Holding Company Merger, any Parent.

 

“Permitted Investments” means (1) Investments
by the Company or any Restricted Subsidiary of the Company in any Person that
is or will become immediately after such Investment a Restricted Subsidiary of
the Company or that will merge or consolidate into the Company or a Restricted
Subsidiary of the Company; (2) Investments in the Company by any
Restricted Subsidiary of the Company; provided
that any Indebtedness evidencing such Investment is unsecured and
subordinated, pursuant to a written agreement, to the Company’s obligations
under the Notes and this Indenture; (3) investments in cash and Cash
Equivalents; (4) loans and advances to employees and officers of the
Company and its Restricted Subsidiaries in the ordinary course of business for
bona fide business purposes not in excess of $10.0 million at any one time
outstanding pursuant to this clause (4); (5) Currency Agreements and
Interest Swap Obligations entered into in the ordinary course of the Company’s
or its Restricted Subsidiaries’ businesses and otherwise in compliance with this
Indenture; (6) Investments in Unrestricted Subsidiaries not to exceed
$10.0 million at any one time outstanding pursuant to this clause (6);
(7) Investments in securities of trade creditors or customers received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers;
(8) Investments made by the Company or its Restricted Subsidiaries as a
result of consideration received in connection with an Asset Sale made in
compliance with Section 4.16; (9) Investments existing on the date
of this Indenture; (10) accounts receivable,

 

16

 

advances, loans,
guarantees or extensions of credit created or acquired in the ordinary course
of business, consistent with past or industry practice; (11) any
Investment by the Company or a Wholly Owned Restricted Subsidiary of the
Company in a Securitization Entity or any Investment by a Securitization Entity
in any other Person in connection with a Qualified Securitization Transaction; provided that any Investment in a
Securitization Entity is in the form of a Purchase Money Note or an equity
interest; (12) Investments committed to by the Company or its Restricted
Subsidiaries on the Issue Date not to exceed $1.5 million in the aggregate
pursuant to this clause (12); (13) Investments in Strategic Joint Ventures not
to exceed $20.0 million outstanding at any one time pursuant to this clause
(13); and (14) any Investment in any Person solely in exchange for Qualified
Capital Stock or, after the Holding Company Merger, Capital Stock of the
Parent, or from a Capital Contribution or the net cash proceeds of any
substantially concurrent sale of the Company’s Qualified Capital Stock.

 

“Permitted Liens” means the following types of
Liens:

 

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

 

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

 

(3)           Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, including any Lien securing letters of credit issued in the ordinary
course of business consistent with past practice in connection therewith, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment
of borrowed money);

 

(4)           judgment
Liens securing judgments not giving rise to an Event of Default;

 

(5)           easements,
rights-of-way, zoning restrictions, restrictive covenants, minor imperfections
in title and other similar charges or encumbrances in respect of real property
not interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries;

 

(6)           any
interest or title of a lessor under any Capitalized Lease Obligation; provided that such Liens do not extend to
any property or assets which is not leased property subject to such Capitalized
Lease Obligation;

 

(7)           purchase
money Liens to finance property or assets (including the cost of construction)
of the Company or any Restricted Subsidiary of the Company acquired in

 

17

 

the ordinary course of business; provided, however, that (A) the related
purchase money Indebtedness shall not exceed the cost of such property or
assets and shall not be secured by any property or assets of the Company or any
Restricted Subsidiary of the Company other than the property and assets so
acquired or constructed and (B) the Lien securing such Indebtedness shall be
created within 180 days of such acquisition or construction;

 

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

 

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

 

(10)         Liens
encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual, or warranty requirements of the Company or any of its
Restricted Subsidiaries, including, without limitation, liability to insurance
carriers under insurance or self-insurance arrangements, including rights of
offset and set-off;

 

(11)         Liens
securing Interest Swap Obligations which Interest Swap Obligations relate to
Indebtedness that is otherwise permitted under this Indenture;

 

(12)         Liens
securing Indebtedness under Currency Agreements;

 

(13)         Liens
securing Acquired Indebtedness incurred in accordance with Section 4.12;
provided that (A) such Liens
secured such Acquired Indebtedness at the time of and prior to the incurrence
of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the
Company and were not granted in connection with, or in anticipation of, the
incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company and (B) such Liens do not extend to or cover any
property or assets of the Company or of any of its Restricted Subsidiaries
other than the property or assets (or the proceeds thereof) that secured the
Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness
of the Company or a Restricted Subsidiary of the Company and are no more
favorable to the lienholders than those securing the Acquired Indebtedness
prior to the incurrence of such Acquired Indebtedness by the Company or a
Restricted Subsidiary of the Company;

 

(14)         Liens
arising under this Indenture;

 

(15)         leases
or subleases granted to others that do not materially interfere with the
business of the Company and its Restricted Subsidiaries;

 

(16)         Liens
in connection with any filing of Uniform Commercial Code financing statements
regarding leases;

 

(17)         Liens
securing Non-Recourse Indebtedness incurred pursuant to this Indenture;

 

18

 

(18)         Liens
arising from a bank or financial institution honoring a check or draft
inadvertently drawn against insufficient funds in the ordinary course of
business; and

 

(19)         Liens
on assets transferred to a Securitization Entity or on assets of a
Securitization Entity, in either case incurred in connection with a Qualified
Securitization Transaction.

 

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

 

“Physical Notes” has the meaning provided in Section 2.01.

 

“Placement Agents” means Morgan Stanley &
Co. Incorporated, Credit Suisse First Boston LLC, Goldman, Sachs & Co.,
J.P. Morgan Securities Inc., Scotia Capital (USA) Inc. and Wells Fargo
Securities, LLC.

 

“Preferred Stock” of any Person means any
Capital Stock of such Person that has preferential rights to any other Capital
Stock of such Person with respect to dividends or redemptions or upon
liquidation.

 

“principal” of any Indebtedness (including the
Notes) means the principal amount of such Indebtedness plus the premium, if
any, on such Indebtedness.

 

“Private Placement Legend” means the legend
initially set forth on the Initial Notes in the form set forth in Exhibit A.

 

“Proceeds” has the meaning set forth in Section 4.23.

 

“pro forma” means, with respect to any
calculation made or required to be made pursuant to the terms of this
Indenture, a calculation in accordance with Article 11 of
Regulation S-X under the Securities Act.

 

“Property” means, with respect to any Person,
any interests of such Person in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without limitation,
Capital Stock, partnership interests and other equity or ownership interests in
any other Person.

 

“Purchase Money Indebtedness” means
Indebtedness the net proceeds of which are used to finance the cost (including
the cost of construction) of property or assets acquired in the normal course
of business by the Person incurring such Indebtedness.

 

“Purchase Money Note” means a promissory note
of a Securitization Entity evidencing a line of credit, which may be
irrevocable, from the Company or any Subsidiary of the Company in connection
with a Qualified Securitization Transaction to a Securitization Entity, which
note shall be repaid from cash available to the Securitization Entity, other
than amounts required to be established as reserves pursuant to agreements,
amounts paid to investors in respect of interest, principal and other amounts
owing to such investors, amounts paid in

 

19

 

connection with the
purchase of newly generated receivables or newly acquired equipment and amounts
paid for administrative costs in the ordinary course of business.

 

“Rule 144A Global Note” has the meaning
provided in Section 2.01.

 

“Qualified Capital Stock” means any Capital
Stock that is not Disqualified Capital Stock.

 

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

 

“Qualified Securitization 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 (1) a Securitization
Entity (in the case of a transfer by the Company or any of its Subsidiaries)
and (2) any other Person (in the case of a transfer by a Securitization
Entity), or may grant a security interest in, any accounts receivable or
equipment (whether now existing or arising or acquired in the future) of the
Company or any of its Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such accounts receivable and
equipment, all contracts and contract rights and all guarantees or other
obligations in respect of such accounts receivable and equipment, proceeds of
such accounts receivable and equipment and other assets (including contract
rights) which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable and equipment.

 

“RCBA” means Blum Capital Partners, L.P. and
its Affiliates.

 

“Record Date” means the Record Dates specified
in the Notes.

 

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

 

“Redemption Disbursement Request” has the
meaning set forth in Section 4.23.

 

“Redemption Notice” means with respect to any
note to be redeemed, a notice of redemption issued in accordance with the terms
of this Indenture.

 

“Redemption Price” means, when used with
respect to any Note to be redeemed, the price fixed for such redemption,
including principal and premium, if any, pursuant to this Indenture and the
Notes.

 

“Reference Date” has the meaning set forth in Section 4.10.

 

“Reference Treasury
Dealer” means (1) Morgan Stanley & Co. Incorporated and its
successors; provided,
however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a “Primary Treasury Dealer”),
the Company is required to substitute therefor another Primary Treasury Dealer,
and (2) any other Primary Treasury Dealer selected by the Company.

 

20

 

“Reference Treasury
Dealer Quotations”  means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker by the Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such
redemption date.

 

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

 

“Refinancing Indebtedness” means any
Indebtedness that is the result of any Refinancing by the Company or any
Restricted Subsidiary of the Company of Indebtedness incurred in accordance
with Section 4.12 (other than pursuant to clause (B), (C), (E),
(F), (G), (H), (I), (J), (K), (M), (N) or, with respect to the Existing
Notes and Indebtedness under the Existing Credit Agreement, clause (D), of
subsection (1) of Section 4.12, in each case that does not:
(1) result in an increase in the aggregate principal amount of Indebtedness of
such Person as of the date of such proposed Refinancing (other than increases
from capitalized interest, any premium required to be paid under the terms of
the instrument governing such Indebtedness or the amount of any premium
reasonably determined to be necessary to accomplish such refinancing and the
amount of reasonable expenses incurred by the Company and any Restricted
Subsidiary in connection with such Refinancing, all of which are included in
the term “Refinancing Indebtedness”), or (2) create Indebtedness with (A) a
Weighted Average Life to Maturity that is less than the Weighted Average Life
to Maturity of the Indebtedness being Refinanced or (B) a final maturity
earlier than the final maturity of the Indebtedness being Refinanced; provided that (i) if such Indebtedness
being Refinanced is Indebtedness solely of the Company or any Restricted
Subsidiary or is Indebtedness solely of the Company and any Restricted Subsidiary
or Restricted Subsidiaries, then such Refinancing Indebtedness shall be
Indebtedness solely of the Company or such Restricted Subsidiary or the Company
and such Restricted Subsidiary or Restricted Subsidiaries, as the case may be,
and (ii) if such Indebtedness being Refinanced is subordinate or junior to the
Notes, then such Refinancing Indebtedness shall be subordinate to the Notes at
least to the same extent and in the same manner as the Indebtedness being
Refinanced.

 

“Registrar” has the meaning provided in Section 2.03.

 

“Registration Rights Agreement” means the
Registration Rights Agreement dated as of the Issue Date among the Company, the
Guarantors and the Placement Agents.

 

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

 

“Regulation S Global Note” has the meaning
provided in Section 2.01.

 

“Replacement Assets” shall have the meaning set
forth in Section 4.16.

 

“Representative” means the indenture trustee or
other trustee, agent or representative in respect of any Designated Senior
Debt; provided that (1) if, and
for so long as,

 

21

 

any Designated Senior
Debt lacks such a representative, then the Representative for such Designated
Senior Debt shall at all times constitute the holders of a majority of such
Designated Senior Debt and (2) the administrative agent (or any successor
thereto) shall be a Representative of the lenders under the Credit Agreement.

 

“Restricted Payment” shall have the meaning set
forth in Section 4.10.

 

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

 

“Restricted Subsidiary” of any Person means any
Subsidiary of such Person which at the time of determination is not an
Unrestricted Subsidiary.

 

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

 

“Sale and Leaseback Transaction” means any
direct or indirect arrangement with any Person or to which any such Person is a
party, providing for the leasing to the Company or a Restricted Subsidiary of
any property, whether owned by the Company or any Restricted Subsidiary at the
Issue Date or later acquired, which has been or is to be sold or transferred by
the Company or such Restricted Subsidiary to such Person or to any other Person
from whom funds have been or are to be advanced by such Person on the security
of such Property.

 

“Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations of the Commission promulgated
thereunder.

 

“Securitization Entity” means a Wholly Owned
Restricted Subsidiary of the Company (or another Person in which the Company or
any Subsidiary of the Company makes an Investment and to which the Company or
any Subsidiary of the Company transfer accounts receivable or equipment and
related assets) which engages in no activities other than in connection with
the financing of accounts receivable or equipment and which is designated by
the Board of Directors of the Company (as provided in this definition) as a
Securitization Entity (1) no portion of the Indebtedness or any other
Obligations (contingent or otherwise) of which (A) is guaranteed by the
Company or any Subsidiary of the Company (excluding guarantees of Obligations
(other than the principal of, and interest on, Indebtedness) pursuant to
Standard Securitization Undertakings), (B) is recourse to or obligates the
Company or any Subsidiary of the Company in any way other than pursuant to
Standard Securitization Undertakings or (C) 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, (2) with which neither the Company nor
any Subsidiary of the Company has any material contract, agreement, arrangement
or understanding other than on terms no less favorable to the Company or such
Subsidiary than those that might be obtained at the time from Persons that are
not Affiliates of the Company, other than fees payable in the ordinary course
of business in connection with servicing receivables of such entity, and (3) to
which neither the Company nor any Subsidiary of the Company has any obligation
to maintain or preserve such entity’s financial condition or cause such entity
to achieve certain levels of

 

22

 

operating results. Any
such designation by the Board of Directors of the Company shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the resolution of
the Board of Directors of the Company giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing conditions.

 

“Secured Proceeds Account” has the meaning set
forth in Section 4.23.

 

“Securities Intermediary” means U.S. Bank
National Association.

 

“Security Agreement” means the Security
Agreement dated as of the Closing Date among the Company, the Guarantors, the
Placement Agents, the Trustee and the Securities Intermediary.

 

“Senior Debt” means the principal of, premium,
if any, and interest (including any interest accruing subsequent to the filing
of a petition of bankruptcy or the commencement of any bankruptcy, insolvency,
reorganization, receivership or other similar proceeding at the rate provided
for in the documentation with respect thereto, whether or not such interest is
an allowed claim under applicable law) and fees and expenses (including costs
of collection), indemnity obligations on, and all other amounts and obligations
owing in respect of, any Indebtedness (other than the Existing Notes) of the
Company, whether outstanding on the Issue Date or thereafter created, incurred
or assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Notes.  Without limiting
the generality of the foregoing, “Senior Debt” shall also include the principal
of, premium, if any, interest (including any interest accruing subsequent to the
filing of a petition of bankruptcy or the commencement of any bankruptcy,
insolvency, reorganization, receivership or other similar proceeding at the
rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on, and all other
amounts owing in respect of, (1) all monetary obligations of every nature of
the Company under the Credit Agreement, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, guaranteed obligations, fees, commissions, expenses and
indemnities, (2) all Interest Swap Obligations and (3) all obligations under
Currency Agreements, in each case whether outstanding on the Issue Date or
thereafter incurred. Notwithstanding the foregoing, “Senior Debt” shall not
include (1) any Indebtedness of the Company to a Subsidiary of the Company
or any Affiliate of the Company or any of such Affiliate’s Subsidiaries,
(2) Indebtedness of the Company to, or guaranteed by the Company on behalf
of, any shareholder, director, officer or employee of the Company or any
Subsidiary of the Company (including, without limitation, amounts owed for
compensation), (3) Indebtedness to trade creditors and other trade
payables incurred in connection with obtaining goods, materials or services,
(4) Indebtedness represented by Disqualified Capital Stock, (5) any
liability for federal, state, local or other taxes owed or owing by the
Company, (6) Indebtedness incurred in violation of the provisions set
forth under Section 4.12 (but, as to any such obligation, no such
violation shall be deemed to exist for purposes of this clause (6) if the
holder(s) of such Indebtedness or their representative and the Trustee shall
have received an Officers’ Certificate of the Company to the effect that the
incurrence of such Indebtedness does not (or, in the case of revolving credit
Indebtedness or other Indebtedness available to be borrowed under the Credit
Agreement after the date of the initial borrowing thereunder, that the
incurrence of the entire committed amount

 

23

 

thereof at the date on
which the initial borrowing thereunder is made would not) violate such
provisions of this Indenture), (7) Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of Title 11, United
States Code, is without recourse to the Company and (8) any Indebtedness
which is, by its express terms, subordinated in right of payment to any other
Indebtedness of the Company.

 

“Significant Subsidiary” means a Restricted
Subsidiary or a group of Restricted Subsidiaries that would be considered a
“significant subsidiary” of the Company pursuant to Rule 1.02(w) of
Regulation S-X under the Securities Act, as in effect on the Issue Date.

 

“Special Redemption” has the meaning provided
in Section 3.01.

 

“Special Redemption Offer” has the meaning
provided in Section 4.23.

 

“Special Redemption Offer Date” has the meaning
provided in Section 4.23.

 

“Special Redemption Payment Date” has the
meaning provided in Section 4.23.

 

“Standard Securitization Undertakings” means
representations, warranties, covenants and indemnities entered into by the
Company or any Subsidiary of the Company which are reasonably customary in an
accounts receivable or equipment securitization transaction.

 

“Stated Maturity” means, (1) with respect to
any debt security, the date specified in such debt security as the fixed date
on which the final installment of principal of such debt security is due and
payable and (2) with respect to any scheduled installment of principal of or
interest on any debt security, the date specified in such debt security as the
fixed date on which such installment is due and payable.

 

“Strategic Joint Venture” means a corporation,
partnership or other entity engaged in a business which is related to that of
the Company or any of its Restricted Subsidiaries or which provides services,
products or intellectual property to the Company or any of its Restricted
Subsidiaries or uses the products, services or intellectual property of the
Company or any of its Restricted Subsidiaries.

 

“Subsidiary,” with respect to any Person, means
(1) any corporation of which the outstanding Capital Stock having at least
a majority of the votes entitled to be cast in the election of directors under
ordinary circumstances shall at the time be owned, directly or indirectly, by
such Person or (2) any other Person of which at least a majority of the
voting interest under ordinary circumstances is at the time, directly or indirectly,
owned by such Person.

 

“Surviving Entity” shall have the meaning
provided in Section 5.01.

 

“TIA” means the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb), as amended, as in effect on the date of this
Indenture, except as otherwise provided in Section 9.03.

 

24

 

“Transaction Expenses” means the expenses
relating to the offering of the Notes, execution and initial borrowings under
the Credit Agreement, the redemption of the Existing Notes, the sale of the
Preferred Stock the net proceeds of which are used in connection with the
Distribution, the Distribution and the interest expense on the Existing Notes
after the Issue Date.

 

“Transferred Reduction Amount” has the meaning
provided in Section 4.12.

 

“Treasury Rate” means, with respect to any
redemption date, the rate per annum equal to the semiannual yield to maturity
of the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.

 

“Trustee” means the party named as such in this
Indenture until a successor replaces it in accordance with the provisions of
this Indenture and thereafter means such successor.

 

“Trust Officer” means any officer or assistant
officer of the Trustee assigned by the Trustee to administer this Indenture, or
in the case of a successor trustee, an officer assigned to the department,
division or group performing the corporation trust work of such successor and
assigned to administer this Indenture.

 

“U.S. Government Obligations” means securities
that are (1) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or (2) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the issuer thereof
at any time prior to the Stated Maturity of the Notes and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt; provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.

 

“U.S. Legal Tender” means such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts.

 

“Unrestricted Subsidiary” means (1) any Subsidiary
of the Company designated as such pursuant to and in compliance with Section 4.14
and (2) any Subsidiary of a Subsidiary of the Company described in clause
(1).  Any such designation may be
revoked by a Board Resolution of the Company delivered to the Trustee, subject
to the provisions of Section 4.14. 
Notwithstanding the foregoing, to the extent Federal Express Trust No.
1991-B and Federal Express Trust No. 1991-A are Subsidiaries of the Company,
each such entity will be an Unrestricted Subsidiary of the Company unless and
until the Board of Directors of the Company designates it to be a Restricted
Subsidiary in accordance with Section 4.14.

 

25

 

“Weighted Average Life to Maturity” means, when
applied to any Indebtedness at any date, the number of years obtained by
dividing (1) the then outstanding aggregate principal amount of such
Indebtedness into (2) the sum of the total of the products obtained by
multiplying (A) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal, including payment
at final maturity, in respect thereof, by (B) the number of years
(calculated to the nearest one-twelfth) which will elapse between such date and
the making of such payment; provided
that the final maturity for purposes of any security which is puttable to the
issuer by the holder thereof upon a date certain without need for the
occurrence of a contingent event (e.g., a change of control) shall be the next
such put date.

 

“Wholly Owned Restricted Subsidiary” of any
Person means any Restricted Subsidiary of such Person of which all the
outstanding voting securities (other than, in the case of a foreign Restricted
Subsidiary, directors’ qualifying shares or an immaterial amount of shares
required to be owned by other Persons pursuant to applicable law) are owned by
such Person or any Wholly Owned Restricted Subsidiary of such Person.

 

SECTION 1.02.  Incorporation by Reference of TIA.  Whenever this Indenture refers to a
provision of the TIA, such provision is incorporated by reference in, and made
a part of, this Indenture.  The
following TIA terms used in this Indenture have the following meanings:

 

“indenture securities” means the Notes.

 

“indenture 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 or any other obligor on the Notes.

 

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

 

SECTION 1.03.  Rules of Construction.  Unless the context otherwise requires:

 

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

 

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

 

(3)           “or”
is not exclusive;

 

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

 

26

 

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

 

(6)           any
reference to a statute, law or regulation means that statute, law or regulation
as amended and in effect from time to time and includes any successor statute,
law or regulation; provided, however,
that any reference to the Bankruptcy Law shall mean the Bankruptcy Law as
applicable to the relevant case.

 

ARTICLE TWO

THE NOTES

 

SECTION 2.01.  Form and Dating.  The Initial Notes, the notation thereon
relating to the Guarantees, if any, and the Trustee’s certificate of
authentication relating thereto shall be substantially in the form of Exhibit A
hereto.  The Exchange Notes, the
notation thereon relating to the Guarantees, if any, and the Trustee’s
certificate of authentication relating thereto shall be substantially in the
form of Exhibit B hereto.  The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or depository rule or usage. 
The Company and the Trustee shall approve the form of the Notes and any
notation, legend or endorsement on them. 
Each Note shall be dated the date of its issuance and shall show the
date of its authentication.  Each Note
shall have an executed Guarantee endorsed thereon substantially in the form of Exhibit
F hereto.

 

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

 

Notes offered and sold (1) in reliance on Rule
144A or (2) in reliance on Regulation S shall, unless the applicable
Holder requests Notes in the form of Certificated Notes in registered form (“Physical
Notes”), which shall be in substantially the form set forth in Exhibit A,
be issued initially in the form of one or more permanent global Notes in
registered form, substantially in the form set forth in Exhibit A (the “Global
Note”), deposited with the Trustee, as custodian for the Depository, duly
executed by the Company (and having an executed Guarantee endorsed thereon) and
authenticated by the Trustee as hereinafter provided, and shall bear the legend
set forth in Exhibit C.  One or
more separate Global Notes shall be issued to represent Notes held by
(1) Qualified Institutional Buyers (a “Rule 144A Global Note”), and
(2) Persons acquiring Notes in reliance on Regulation S (a “Regulation
S Global Note”).  The Company shall
cause the Rule 144A Global Notes and Regulation S Global Notes to have separate
CUSIP numbers.  The aggregate principal
amount of any Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the
Depository, as hereinafter provided.

 

All Notes offered and sold in reliance on Regulation S
shall remain in the form of a Global Note until the consummation of the
Exchange Offer pursuant to the Registration Rights Agreement; provided, however, that all of the time
periods specified in the Registration Rights

 

27

 

Agreement to be complied
with by the Company and the Guarantors have been so complied with.

 

SECTION 2.02.  Execution and Authentication; Aggregate
Principal Amount.  One Officer of
the Company and each Guarantor shall sign the Notes for the Company and the
Guarantees for the Guarantors by manual or facsimile signature.

 

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

 

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

 

The Trustee shall authenticate the Notes upon a
written order of the Company in the form of an Officers’ Certificate of the
Company.  Each such written order shall
specify the amount of Notes to be authenticated and the date on which the Notes
are to be authenticated, whether the Notes are to be Initial Notes or Exchange
Notes and whether the Notes are to be issued as Physical Notes or Global Notes
or such other information as the Trustee may reasonably request.

 

In the event that the Company shall issue and the
Trustee shall authenticate any Notes issued under this Indenture subsequent to
the Issue Date, the Company shall use its reasonable efforts to obtain the same
“CUSIP” number for such Notes as is printed on the Notes outstanding at such
time; provided, however, that if
any series of Notes issued under this Indenture subsequent to the Issue Date is
determined, pursuant to an Opinion of Counsel of the Company in a form
reasonably satisfactory to the Trustee to be a different class of security than
the Notes outstanding at such time for federal income tax purposes, the Company
may obtain a “CUSIP” number for such Notes that is different than the “CUSIP”
number printed on the Notes then outstanding. 
Notwithstanding the foregoing, all Notes issued under this Indenture
shall vote and consent together on all matters as one class and no series of
Notes will have the right to vote or consent as a separate class on any matter.

 

The Trustee may appoint an authenticating agent (the “Authenticating
Agent”) reasonably acceptable to the Company to authenticate Notes.  Unless otherwise provided in the
appointment, an Authenticating Agent may authenticate Notes whenever the
Trustee may do so.  Each reference in
this Indenture to authentication by the Trustee includes authentication by such
Authenticating Agent.  An Authenticating
Agent has the same rights as an Agent to deal with the Company or with any
Affiliate of the Company.

 

The Trustee is authorized to enter into a letter of
representation with the Depository in the form provided to the Trustee by the
Company and to act in accordance with such letter.  The Trustee is authorized to enter into the Security Agreement
and to act in accordance therewith.

 

Subject to Article Four, the aggregate principal
amount of Notes of any series which may be authenticated by the Trustee and
delivered under this Indenture is unlimited. The

 

28

 

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

 

SECTION 2.03.  Registrar and Paying Agent.  The Company shall maintain an office or
agency (which shall be located in the Borough of Manhattan in the City of New
York, State of New York) where (1) Notes may be presented or surrendered for
registration of transfer or for exchange (“Registrar”), (2) Notes may be
presented or surrendered for payment (“Paying Agent”) and (3) notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served.  The Registrar shall keep
a register of the Notes and of their transfer and exchange.  The Company may have one or more
Co-Registrars and one or more additional Paying Agents reasonably acceptable to
the Trustee.  The term “Paying Agent” or
“Registrar” includes any additional Paying Agent or Registrar, as the case may
be.  The Company may act as its own
Paying Agent, except that for the purposes of payments on the Notes pursuant to
Sections 4.15 and 4.16, neither the Company nor any Affiliate of
the Company may act as Paying Agent.

 

The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which agreement shall
incorporate the provisions of the TIA and 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 shall fail to
maintain a Registrar or Paying Agent the Trustee shall act as such.

 

The Company initially appoints the Trustee as
Registrar, Paying Agent and agent for service of demands and notices in
connection with the Notes, until such time as the Trustee has resigned or a successor
has been appointed.  Any of the
Registrar, the Paying Agent or any other agent may resign upon 30 days’ notice
to the Company.  The Company may change
any Paying Agent and Registrar without notice to the Holders.

 

SECTION 2.04.  Paying Agent To Hold Assets in Trust.  The Company shall require each Paying Agent
other than the Trustee to agree in writing that such Paying Agent shall hold in
trust for the benefit of the Holders or the Trustee all assets held by the
Paying Agent for the payment of principal of, premium, if any, or interest on,
the Notes (whether such assets have been distributed to it by the Company or
any other obligor on the Notes), and the Company and the Paying Agent shall
notify the Trustee of any Default by the Company (or any other obligor on the
Notes) in making any such payment.  The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at any
time during the continuance of any payment Default, upon written request to a
Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed.  Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent, the
Paying Agent shall have no further liability for such assets.

 

SECTION 2.05.  Holder Lists.  The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of the Holders and shall otherwise comply with TIA
Section 312(a).  If the Trustee is
not the Registrar, the Company shall furnish or cause the Registrar to furnish
to the Trustee three (3) Business Days (or such shorter period as the Trustee
may expressly agree to) before each Record Date and

 

29

 

at such other times as
the Trustee may request in writing a list as of such date and in such form as
the Trustee may reasonably require of the names and addresses of the Holders,
which list may be conclusively relied upon by the Trustee, and the Company
shall otherwise comply with TIA Section 312(a).

 

SECTION 2.06.  Transfer and Exchange.  Subject to Sections 2.16 and 2.17,
when Notes are presented to the Registrar or a Co-Registrar with a request to
register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes or other authorized denominations, the Registrar or
Co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided,
however, that the Notes presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Company, the Trustee and the
Registrar or Co-Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing.  To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes and the Guarantors shall execute Guarantees
thereon at the Registrar’s or Co-Registrar’s request.  No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any transfer tax, fee or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchanges or transfers pursuant to Section 2.10, 3.07,
4.15, 4.16 or 9.05, in which event the Company shall be
responsible for the payment of such taxes).

 

The Registrar or Co-Registrar shall not be required to
register the transfer of or exchange of any Note (1) during a period
beginning at the opening of business on the day which is 15 days before the
mailing of a notice of redemption of Notes and ending at the close of business
on the day of such mailing and (2) selected for redemption in whole or in
part pursuant to Article Three, except the unredeemed portion of any Note
being redeemed in part.

 

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

 

All Notes issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt and shall
be entitled to the same benefits under this Indenture as the Notes surrendered
upon such transfer or exchange.

 

SECTION 2.07.  Replacement Notes.  If a mutilated Note is surrendered to the
Trustee or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note and the Guarantors shall execute a Guarantee
thereon if the Trustee’s requirements are met. 
If required by the Trustee or the Company, such Holder must provide an
indemnity bond or other indemnity of reasonable tenor, sufficient in the
reasonable judgment of the Company, the Guarantors and the Trustee, to protect
the Company, the Guarantors, the Trustee or any Agent from any loss which any
of them may suffer if a Note is replaced. 
Every replacement Note shall constitute an additional obligation of the
Company and the Guarantors.

 

30

 

SECTION 2.08.  Outstanding Notes.  Notes outstanding at any time are all the
Notes that have been authenticated by the Trustee except those canceled by it,
those delivered to it for cancellation and those described in this Section 2.08
as not outstanding.  Subject to the
provisions of Section 2.09, a Note does not cease to be outstanding
because the Company or any of its Affiliates holds the Note.

 

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

 

If on a Redemption Date or the Maturity Date the Paying
Agent holds U.S. Legal Tender sufficient to pay all of the principal, premium,
if any, and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes shall be deemed not
to be outstanding and interest on them shall cease to accrue.

 

SECTION 2.09.  Treasury Notes.  In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver,
consent or notice, Notes owned by the Company or an Affiliate of the Company
shall be considered as though they are not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes which a Trust Officer of the
Trustee actually knows are so owned shall be so considered.  The Company shall notify the Trustee, in
writing, when either it or, to its knowledge, any of its Affiliates repurchases
or otherwise acquires Notes, of the aggregate principal amount of such Notes so
repurchased or otherwise acquired and such other information as the Trustee may
reasonably request and the Trustee shall be entitled to rely thereon.

 

SECTION 2.10.  Temporary Notes.  Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes upon receipt of a written order of the Company in the form of an
Officers’ Certificate.  The Officers’
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated.  Temporary Notes shall be substantially in
the form of definitive Notes but may have variations that the Company consider
appropriate for temporary Notes and so indicate in the Officers’
Certificate.  Without unreasonable
delay, the Company shall prepare, the Trustee shall authenticate and the
Guarantors shall execute Guarantees on, upon receipt of a written order of the
Company pursuant to Section 2.02, definitive Notes in exchange for
temporary Notes.

 

SECTION 2.11.  Cancellation.  The Company at any time may deliver Notes to
the Trustee for cancellation.  The
Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment.  The Trustee, or at the direction of the
Trustee, the Registrar or the Paying Agent, and no one else, shall cancel and,
at the written direction of the Company, shall dispose, in its customary
manner, of all Notes surrendered for transfer, exchange, payment or
cancellation.  Subject to Section 2.07,
the Company may not issue new Notes to replace Notes that it has paid for or
delivered to the Trustee for cancellation. 
If the Company shall acquire any of the Notes, such acquisition shall

 

31

 

not operate as a
redemption or satisfaction of the Indebtedness represented by such Notes unless
and until the same are surrendered to the Trustee for cancellation pursuant to
this Section 2.11.

 

SECTION 2.12.  Defaulted Interest.  The Company will pay interest on overdue
principal from time to time on demand at the rate of interest then borne by the
Notes.  The Company shall, to the extent
lawful, pay interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the rate of interest
then borne by the Notes.  Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months,
and, in the case of a partial month, the actual number of days elapsed.

 

If the Company defaults in a payment of interest on
the Notes, it shall pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest, to the Persons who are
(1) Holders on a subsequent special record date, if it so elects, which
special record date shall be the fifteenth day next preceding the date fixed by
the Company for the payment of defaulted interest or the next succeeding
Business Day if such date is not a Business Day, or (2) if the Company
does not elect a special record date, Holders on the next Record Date, which
payment shall be made on the next regular Interest Payment Date.  The Company shall notify the Trustee in writing
of the amount of defaulted interest proposed to be paid on each Note and the
date of the proposed payment (a “Default Interest Payment Date”), and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such defaulted
interest or shall make arrangements satisfactory to the Trustee for such
deposit on or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
defaulted interest as provided in this Section; provided, however, that in no event shall the Company
deposit monies proposed to be paid in respect of defaulted interest later than
10:30 a.m. New York City time on the proposed Default Interest Payment
Date.  At least 15 days before the
subsequent special record date, the Company shall mail (or cause to be mailed)
to each Holder, as of a recent date selected by the Company, with a copy to the
Trustee, a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid. 
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(1) shall
be paid to Holders as of the regular record date for the Interest Payment Date
for which interest has not been paid. 
Notwithstanding the foregoing, the Company may make payment of any
defaulted interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange.

 

SECTION 2.13.  CUSIP Number.  The Company in issuing the Notes of any
series may use “CUSIP”, “CINS” or “ISIN” numbers (if then generally in use),
and, if so, the Trustee shall use the CUSIP, CINS or ISIN numbers, as the case
may be, in notices of redemption or exchange as a convenience to Holders; provided, however, that no representation
is hereby deemed to be made by the Trustee as to the correctness or accuracy of
such numbers either as printed on the Notes or as contained in any notice of
redemption or exchange, and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers.  The Company shall promptly notify the
Trustee of any change in CUSIP, CINS or ISIN numbers for the Notes of any
series.

 

32

 

SECTION 2.14.  Deposit of Monies.  Prior to 10:30 a.m. New York City time on
each Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Payment Date and Net Proceeds Offer Payment Date, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date, Maturity
Date, Redemption Date, Change of Control Payment Date and Net Proceeds Offer
Payment Date, as the case may be, in a timely manner which permits the Paying
Agent to remit payment to the Holders on such Interest Payment Date, Maturity
Date, Redemption Date, Change of Control Payment Date and Net Proceeds Offer
Payment Date, as the case may be.

 

SECTION 2.15.  Restrictive Legends.  Each Global Note and Physical Note that
constitutes a Restricted Security shall bear the legend (the “Private
Placement Legend”) as set forth in Exhibit A on the face thereof
until after the second anniversary of the later of the Issue Date and the last
date on which the Company or any Affiliate of the Company was the owner of such
Note (or any predecessor security) (or such shorter period of time as permitted
by Rule 144 under the Securities Act or any successor provision thereunder,
unless otherwise agreed by the Company and the Holder thereof) (or such longer
period of time as may be required under the Securities Act or applicable state
securities laws in the opinion of counsel for the Company).

 

Each Global Note shall also bear the legend as set
forth in Exhibit C.

 

SECTION 2.16.  Book-Entry Provisions for Global Note.

 

(1) The Global Notes initially shall (A) be
registered in the name of the Depository or the nominee of such Depository,
(B) be delivered to the Trustee as custodian for such Depository and
(C) bear the legend as set forth in Exhibit C.

 

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

 

(2) Transfers of a Global Note shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees.  Interests of
beneficial owners in a Global Note may be transferred or exchanged for Physical
Notes in accordance with the rules and procedures of the Depository and the
provisions of Section 2.17. 
In addition, Physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in a Global Note in
accordance with the rules and procedures of the Depositary and the provisions
of Section 2.17 if (A) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for the Global Notes
and a successor depositary is not appointed by the Company within 90 days of
such notice, (B) the Depository ceases to be registered as a “clearing agency”
under the Exchange Act and a successor depository is not

 

33

 

appointed by the Company
within 90 days of such notice, (C) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the Depository
to issue Physical Notes.

 

(3) Any beneficial interest in one of the Global Notes
that is transferred to a person who takes delivery in the form of an interest
in another Global Note will, upon transfer, cease to be an interest in such
Global Note and become an interest in such other Global Note and, accordingly,
will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Note for as
long as it remains such an interest.

 

(4) In connection with any transfer of a portion of
the beneficial interest in a Global Note to beneficial owners pursuant to
paragraph (2) of this Section 2.16, the Registrar shall reflect on
its books and records the date and a decrease in the principal amount of such
Global Note in an amount equal to the principal amount of the beneficial
interest in such Global Note to be transferred, and the Company shall execute,
the Guarantors shall execute Guarantees on, and the Trustee shall authenticate
and deliver, one or more Physical Notes of like tenor and amount.

 

(5) In connection with the transfer of an entire
Global Note to beneficial owners pursuant to paragraph (2) of this Section 2.16,
such Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, the Guarantors shall execute
Guarantees on and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations.

 

(6) Any Physical Note constituting a Restricted
Security delivered in exchange for an interest in a Global Note pursuant to
paragraph (2) or (3) of this Section 2.16 shall, except as
otherwise provided by paragraphs in Section 2.17, bear the Private
Placement Legend.

 

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

 

(8) Holders of Exchange Notes held in the form of
permanent certificated notes may exchange such Notes for beneficial interests
in the Exchange Global Note at any time. 
Upon receipt of a request for such an exchange or transfer, the Trustee
shall cancel such permanent certificated Note and increase or cause to be
increased the aggregate principal amount of the Exchange Global Note.

 

SECTION 2.17.  Registration of Transfers and Exchanges.

 

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

 

(A) to register the
transfer of the Physical Notes; or

 

34

 

(B) to exchange such
Physical Notes for an equal number of Physical Notes of other authorized
denominations, the Registrar or Co-Registrar shall register the transfer or
make the exchange as requested if the requirements under this Indenture as set
forth in this Section 2.17 for such transactions are met; provided, however, that the Physical Notes
presented or surrendered for registration of transfer or exchange:

 

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

 

(ii)           in
the case of Physical Notes the offer and sale of which have not been registered
under the Securities Act, such Physical Notes shall be accompanied, in the sole
discretion of the Company, by the following additional information and
documents, as applicable:

 

(iii)          if such Physical Note is being delivered to
the Registrar or Co-Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that effect
(substantially in the form of Exhibit G hereto); or

 

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

 

(v)           if
such Physical Note is being transferred to an Institutional Accredited
Investor, delivery of a certification to that effect (substantially in the form
of Exhibit G hereto) and a Transferee Certificate for Institutional
Accredited Investors substantially in the form of Exhibit D hereto; or

 

(vi)          if
such Physical Note is being transferred in reliance on Regulation S,
delivery of a certification to that effect (substantially in the form of Exhibit
G hereto) and a Transferee Certificate for Regulation S Transfers
substantially in the form of Exhibit E hereto and an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such transfer is in
compliance with the Securities Act; or

 

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

 

(viii)        if such Physical Note is being transferred in
reliance on another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially in the form of Exhibit G

 

35

 

hereto) and an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer is in compliance
with the Securities Act.

 

(2) Restrictions on Transfer of a Physical Note for
a Beneficial Interest in a Global Note. 
Unless otherwise agreed to by the Company, a Physical Note may not be
exchanged for a beneficial interest in a Global Note except upon satisfaction
of the requirements set forth in this Section 2.17.  Upon receipt by the Registrar or
Co-Registrar of a Physical Note, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Registrar or Co-Registrar,
together with:

 

(A)          certification,
substantially in the form of Exhibit G hereto, that such Physical Note
is being transferred (i) to a Qualified Institutional Buyer, (ii) to
an Institutional Accredited Investor or (iii) in reliance on Regulation S
and, in the case of (ii), a Transferee Certificate for Institutional Accredited
Investors substantially in the form of Exhibit D hereto and, in the case
of (iii), a Transferee Certificate for Regulation S Transfers substantially in
the form of Exhibit E hereto and an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is in compliance
with the Securities Act; and

 

(B)           written
instructions directing the Registrar or Co-Registrar to make, or to direct the
Depository to make, an endorsement on the applicable Global Note to reflect an
increase in the aggregate amount of the Notes represented by the Global Note,
then the Registrar or Co-Registrar shall cancel such Physical Note and cause,
or direct the Depository to cause, in accordance with the standing instructions
and procedures existing between the Depository and the Registrar or
Co-Registrar, the principal amount of Notes represented by the applicable
Global Note to be increased accordingly. 
If no Global Note representing Notes held by Qualified Institutional
Buyers, Institutional Accredited Investors or Persons acquiring Notes in
reliance on Regulation S, as the case may be, is then outstanding, the Company
shall issue and the Trustee shall, upon written instructions from the Company
in accordance with Section 2.02, authenticate such a Global Note in
the appropriate principal amount.

 

(3) Transfer and Exchange of Global Notes.  The transfer and exchange of Global Notes or
beneficial interests therein shall be effected through the Depository in
accordance with this Indenture (including the restrictions on transfer set
forth herein) and the procedures of the Depository therefor.  Upon receipt by the Registrar or
Co-Registrar of written instructions, or such other instruction as is customary
for the Depository, from the Depository or its nominee, requesting the
registration of transfer of an interest in a Rule 144A Global Note or a
Regulation S Global Note, as the case may be, to another type of Global Note,
together with the applicable Global Notes (or, if the applicable type of Global
Note required to represent the interest as requested to be transferred is not
then outstanding, only the Global Note representing the interest being
transferred), the Registrar or Co-Registrar shall cause, or direct the
Depository to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Registrar or Co-Registrar,
the principal amount of Notes represented by the applicable Global Notes
involved in such transfer or exchange to be adjusted accordingly to reflect the
applicable increase and decrease of the principal amount of Notes represented
by such types of Global

 

36

 

Notes, giving effect to
such transfer.  If the applicable type
of Global Note required to represent the interest as requested to be
transferred is not outstanding at the time of such request, the Company shall
issue and the Trustee shall, upon written instructions from the Company in
accordance with Section 2.02, authenticate a new Global Note of
such type in principal amount equal to the principal amount of the interest
requested to be transferred.  Any such
transfer or exchange of Global Notes or beneficial interests therein shall be
effected through the Depository in accordance with this Indenture (including
the restrictions on transfer as contemplated herein) and the procedure of the
Depository therefor.  Unless otherwise
agreed to by the Company, any request for the registration of the transfer of
an interest in a Rule 144A Global Note or a Regulation S Global Note to another
type of Global Note must be accompanied by a certificate from the transferor,
substantially in the form of Exhibit G hereto, that the transferee is
either (A) a Qualified Institutional Buyer in accordance with Rule 144A,
(B) an Institutional Accredited Investor, or (C) relying on
Regulation S, and in the case of (B), a Transferee Certificate for
Institutional Accredited Investors substantially in the form of Exhibit D
hereto and, in the case of (C), a Transferee Certificate for Regulation S
Transfers substantially in the form of Exhibit E hereto and an Opinion
of Counsel reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act.

 

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

 

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

 

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

 

(C)           if
such beneficial interest is being transferred to an Institutional Accredited
Investor, delivery of a certification to that effect (substantially in the form
of Exhibit G hereto) and a Certificate for Institutional Accredited
Investors substantially in the form of Exhibit D hereto; or

 

(D)          if
such beneficial interest is being transferred in reliance on Regulation S,
delivery of a certification to that effect (substantially in the form of Exhibit
G hereto) and a Transferee Certificate for Regulation S Transfers
substantially in the form of Exhibit E hereto and an Opinion of Counsel

 

37

 

reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act; or

 

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

 

(F)           if
such beneficial interest is being transferred in reliance on another exemption
from the registration requirements of the Securities Act, a certification to
that effect (substantially in the form of Exhibit G hereto) and an
Opinion of Counsel reasonably satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act, then the Registrar or
Co-Registrar will cause, in accordance with the standing instructions and
procedures existing between the Depository and the Registrar or Co-Registrar,
the aggregate principal amount of the applicable Global Note to be reduced and,
following such reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers’ Certificate in accordance with
Section 2.02, the Trustee will authenticate and deliver to the
transferee a Physical Note.

 

(i) Notes issued in exchange for a beneficial interest
in a Global Note pursuant to this Section 2.17(4)(F) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Registrar or Co-Registrar in writing.  The Registrar or Co-Registrar shall deliver
such Physical Notes to the Persons in whose names such Physical Notes are so
registered.

 

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

 

(6) Private Placement Legend.  Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar or
Co-Registrar shall deliver Notes that do not bear the Private Placement Legend.  Upon the transfer, exchange or replacement of
Notes bearing the Private Placement Legend, the Registrar or Co-Registrar shall
deliver only Notes that bear the Private Placement Legend unless (A) the
requested transfer is after the second anniversary of the Issue Date (provided, however, that neither the
Company nor any Affiliate of the Company has held any beneficial interest in
such Note, or portion thereof, at any time prior to or on the second
anniversary of the Issue Date unless otherwise agreed by the Company), or
(B) there is delivered to the Registrar or Co-Registrar a certificate
and/or, if requested, an Opinion of Counsel, each reasonably satisfactory to
the Company and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.

 

38

 

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

 

The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 2.16
or this Section 2.17.  The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time during the
Registrar’s normal business hours upon the giving of reasonable written notice
to the Registrar.

 

(8) Transfers of Notes Held by Affiliates.  Any certificate (A) evidencing a Note
that has been transferred to an Affiliate of the Company within two years after
the Issue Date, as evidenced by a notation on the Assignment Form for such
transfer or in the representation letter delivered in respect thereof or
(B) evidencing a Note that has been acquired from an Affiliate (other than
by an Affiliate) in a transaction or a chain of transactions not involving any
public offering, shall, until two years after the last date on which the
Company or any Affiliate of the Company was an owner of such Note, in each
case, bear the Private Placement Legend, unless otherwise agreed by the Company
(with written notice thereof to the Trustee).

 

SECTION 2.18.  Liquidated Damages Under Registration
Rights Agreement.  Under certain
circumstances, the Company shall be obligated to pay certain liquidated damages
to the Holders, all as set forth in Section 2 of the Registration Rights
Agreement.  The terms thereof are hereby
incorporated herein by reference.

 

ARTICLE THREE

REDEMPTION

 

SECTION 3.01.  Notices to Trustee.  If the Company elects to redeem Notes
pursuant to Section 3.03, it shall notify the Trustee and the
Paying Agent in writing of the Redemption Date and the principal amount of the
Notes to be redeemed.

 

The Company shall give each notice to the Trustee
provided for in this Section 3.01 45 days before the Redemption
Date (unless a shorter notice period shall be satisfactory to the Trustee or is
called for pursuant to the next paragraph), together with an Officers’
Certificate stating that such redemption shall comply with the conditions
contained herein and in the Notes.  Any
such notice may be cancelled at any time prior to notice of such redemption
being mailed to any Holder and shall thereby be void and of no effect.

 

The Company shall give notice of a redemption pursuant
to Section 4.23 (“Special Redemption”) to the Paying Agent and the
Trustee at least ten days before the Redemption Date with respect to the
Special Redemption (unless a shorter notice period shall be agreed to by the
Trustee in writing), together with an Officers’ Certificate stating that such
redemption will comply with the conditions contained herein.

 

SECTION 3.02.  Selection of Notes To Be Redeemed.  In the event that less than all of the Notes
are to be redeemed at any time, selection of such Notes, or portions thereof,
for redemption will be made by the Trustee in compliance with the requirements
of the principal

 

39

 

national securities exchange, if any, on which such Notes are listed
or, if such Notes are not then listed on a national securities exchange, on a
pro rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided, however, that no Notes of a principal amount of
$1,000 or less shall be redeemed in part; provided,
further, that if a partial redemption is made with the proceeds of
an Equity Offering, selection of the Notes or portions thereof for redemption
shall be made by the Trustee only on a pro rata basis or on as nearly a pro
rata basis as is practicable (subject to DTC procedures), unless such method is
otherwise prohibited.

 

Notice of redemption shall be mailed by first-class
mail at least 30 but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at its registered address.  If any Note is to be redeemed in part only,
the notice of redemption that relates to such Note shall state the portion of
the principal amount thereof to be redeemed. 
A new Note in a principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon cancellation of the
original Note.  On and after the Redemption
Date, interest will cease to accrue on Notes or portions thereof called for
redemption as long as the Company has deposited with the Paying Agent funds in
satisfaction of the applicable Redemption Price pursuant to this Indenture.

 

SECTION 3.03.  Optional Redemption.  The Notes will be redeemable, at the
Company’s option, in whole at any time or in part from time to time, on and
after May 15, 2008, upon not less than 30 nor more than 60 day’s
notice, at the following Redemption Prices (expressed as percentages of the
principal amount thereof) if redeemed during the twelve-month period commencing
on May 15 of the year set forth below, plus, in each case, accrued and
unpaid interest thereon, if any, to the date of redemption:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2008

  	
   

  	
  103.688

  	
  %

  
	
  2009

  	
   

  	
  102.458

  	
  %

  
	
  2010

  	
   

  	
  101.229

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, at any time prior to May 15, 2008,
the Company may, at its option, redeem the Notes, in whole or in part, from
time to time, upon not less than 30 nor more than 60 days’ notice at a
Redemption Price equal to the greater of (1) 101% of the principal amount of
the Notes so redeemed, plus accrued and unpaid interest, and (2) the Make-Whole
Premium with respect to the Notes, or the portions thereof, to be redeemed,
plus, to the extent not included in the Make-Whole Premium, accrued and unpaid
interest to the date of redemption.

 

At any time, or from time to time, on or prior to
May 15, 2006, the Company may, at its option, on one or more occasions use
all or a portion of the net cash proceeds of one or more Equity Offerings to
redeem the Notes issued under this Indenture at a Redemption Price equal to
107.375% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of redemption; provided
that at least 65% of the principal amount of Notes originally issued
remains outstanding immediately after any such redemption.  In order to effect the foregoing redemption
with the proceeds of any Equity Offering, the Company shall make such redemption
not more than 90 days after the consummation of any such Equity Offering.

 

40

 

SECTION 3.04.  Notice of Redemption.  At least 30 days but not more than 60 days
before a Redemption Date (other than with respect to a Special Redemption), the
Company shall mail or cause to be mailed a notice of redemption by first class
mail to each Holder of Notes to be redeemed at its registered address, with a
copy to the Trustee and any Paying Agent. 
At the Company’s request, the Trustee shall give the notice of
redemption in the Company’s name and at the Company’s expense.  The Company shall provide such notices of
redemption to the Trustee at least five days before the intended mailing date
(unless a shorter period shall be satisfactory to the Trustee) (other than with
respect to a Special Redemption).

 

Each notice of redemption shall identify (including
the CUSIP number) the Notes to be redeemed and shall state:

 

(1)           the
Redemption Date;

 

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

 

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

 

(4)           the
subparagraph of the Notes pursuant to which such redemption is being made;

 

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

 

(6)           that,
unless the Company defaults in making the redemption payment, interest on Notes
or applicable portions thereof called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of such
Notes is to receive payment of the Redemption Price plus accrued interest as of
the Redemption Date, if any, upon surrender to the Paying Agent of the Notes
redeemed;

 

(7)           if
any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the Redemption Date, and upon surrender of
such Note, a new Note or Notes in the aggregate principal amount equal to the
unredeemed portion thereof will be issued; and

 

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

 

The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the purchase of Notes.

 

SECTION 3.05.  Effect of Notice of Redemption.  Once notice of redemption is mailed in
accordance with Section 3.04, such notice of redemption shall be
irrevocable and Notes called for redemption become due and payable on the
Redemption Date and at the

 

41

 

Redemption Price plus
accrued interest as of such date, if any. 
Upon surrender to the Trustee or Paying Agent, such Notes called for
redemption shall be paid at the Redemption Price plus accrued interest thereon
to the Redemption Date, but installments of interest, the maturity of which is
on or prior to the Redemption Date, shall be payable to Holders of record at
the close of business on the relevant record dates referred to in the
Notes.  Interest shall accrue on or
after the Redemption Date and shall be payable only if the Company defaults in
payment of the Redemption Price.

 

SECTION 3.06.  Deposit of Redemption Price.  On or before the Redemption Date and in
accordance with Section 2.14, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the Redemption Price plus
accrued interest, if any, of all Notes to be redeemed on that date.  The Paying Agent shall promptly return to
the Company any U.S. Legal Tender so deposited which is not required for that
purpose, except with respect to monies owed as obligations to the Trustee
pursuant to Article Seven.

 

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

 

SECTION 3.07.  Notes Redeemed in Part.  Upon surrender of a Note that is to be
redeemed in part, the Trustee shall authenticate for the Holder a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.

 

ARTICLE FOUR

COVENANTS

 

SECTION 4.01.  Payment of Notes.

 

(1) 
The Company shall pay the principal of, premium, if any, and interest on
the Notes on the dates and in the manner provided in the Notes and in this
Indenture.

 

(2) 
An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other
than the Company or any of its Affiliates) holds, prior to 10:30 a.m. New York
City time on that date, U.S. Legal Tender designated for and sufficient to pay
the installment in full and is not prohibited from paying such money to the
Holders pursuant to the terms of this Indenture or the Notes.

 

(3) 
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or withhold
income or other similar taxes imposed by the United States of America from
principal or interest payments hereunder.

 

SECTION 4.02.  Maintenance of Office or Agency.  The Company shall maintain the office or
agency required under Section 2.03.  The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency.  If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish

 

42

 

the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 13.02.

 

SECTION 4.03.  Corporate Existence.  Except as otherwise permitted by
Article Five, the Company shall do or cause to be done, at its own cost
and expense, all things necessary to preserve and keep in full force and effect
its corporate existence and the corporate existence of each of its Restricted
Subsidiaries in accordance with the respective organizational documents of each
such Restricted Subsidiary and the material rights (charter and statutory) and
franchises of the Company and each such Restricted Subsidiary; provided, however, that the Company shall
not be required to preserve, with respect to itself, any material right or
franchise and, with respect to any of its Restricted Subsidiaries, any such
existence, material right or franchise, if the Board of Directors of the
Company (or if such existence is with respect to any Restricted Subsidiary
which is not a Significant Subsidiary, by the appropriate officers of the
Company) shall determine in good faith that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole.

 

SECTION 4.04.  Payment of Taxes and Other Claims .  The Company shall pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (1) all
material taxes, assessments and governmental charges (including withholding
taxes and any penalties, interest and additions to taxes) levied or imposed
upon it or any of its Restricted Subsidiaries or properties of it or any of its
Restricted Subsidiaries and (2) all material lawful claims for labor,
materials and supplies that, if unpaid, might by law become a Lien upon the
property of the Company or any of its Restricted Subsidiaries; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate negotiations or proceedings
properly instituted and conducted for which adequate reserves, to the extent
required under GAAP as it exists at such time, have been taken.

 

SECTION 4.05.  Maintenance of Properties and Insurance.

 

(1) 
The Company shall, and shall cause each of the Restricted Subsidiaries
to, maintain all properties used or useful in the conduct of its business in
good working order and condition (subject to ordinary wear and tear) and make
all necessary repairs, renewals, replacements, additions, betterments and
improvements thereto and actively conduct and carry on its business; provided, however, that nothing in this Section 4.05
shall prevent the Company or any of the Restricted Subsidiaries of the Company
from discontinuing the operation and maintenance of any of its properties, if
such discontinuance is (A) in the ordinary course of business pursuant to
customary business terms or (B) in the good faith judgment of the
respective Boards of Directors or other governing body of the Company or
Restricted Subsidiary, as the case may be, desirable in the conduct of their
respective businesses and is not disadvantageous in any material respect to the
Holders.

 

(2) 
The Company shall provide or cause to be provided, for itself and each
of the Restricted Subsidiaries of the Company, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Company, are adequate and appropriate for the conduct of the
business of the Company and its Restricted Subsidiaries in a

 

43

 

prudent manner, with
reputable insurers or with the Government of the United States of America or
any agency or instrumentality thereof (if not through self-insurance).

 

SECTION 4.06.  Compliance Certificate; Notice of Default.

 

(1) 
The Company shall deliver to the Trustee, within 120 days after the end
of each of the Company’s fiscal years, an Officers’ Certificate (provided, however, that one of the
signatories to each such Officers’ Certificate shall be the Company’s principal
executive officer, principal financial officer or principal accounting
officer), as to such Officers’ knowledge, without independent investigation, of
the Company’s compliance with all conditions and covenants under this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and in the event any Default of the Company’s exists, such Officers
shall specify the nature of such Default. 
Each such Officers’ Certificate shall also notify the Trustee should the
Company elect to change the manner in which it fixes its fiscal year-end.

 

(2) 
So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied
by a written report of the Company’s independent certified public accountants
(who shall be a firm of established national reputation) stating (A) that their
audit examination has included a review of the terms of this Indenture and the
form of the Notes as they relate to accounting matters, and (B) whether, in
connection with their audit examination, any Default or Event of Default has
come to their attention and if such a Default or Event of Default has come to
their attention, specifying the nature and period of existence thereof; provided, however, that, without any
restriction as to the scope of the audit examination, such independent
certified public accountants shall not be liable by reason of any failure to
obtain knowledge of any such Default or Event of Default that would not be
disclosed in the course of an audit examination conducted in accordance with
generally accepted auditing standards.

 

(3) 
(A) If any Default or Event of Default has occurred and is
continuing or (B) if any Holder seeks to exercise any remedy hereunder
with respect to a claimed Default under this Indenture or the Notes, the
Company shall deliver to the Trustee, at its address set forth in Section 13.02,
by registered or certified mail or by facsimile transmission followed by hard
copy by registered or certified mail an Officers’ Certificate specifying such
event, notice or other action promptly upon its becoming aware of such
occurrence.

 

SECTION 4.07.  Compliance with Laws.  The Company shall comply, and shall cause
each of its Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions of the United States of America, all
states and municipalities thereof, and of any governmental department,
commission, board, regulatory authority, bureau, agency and instrumentality of
the foregoing, in respect of the conduct of their respective businesses and the
ownership of their respective properties, except for such noncompliances as
could not singly or in the aggregate reasonably be expected to have a material
adverse effect on the financial condition or results of operations of the
Company and its Subsidiaries taken as a whole.

 

SECTION 4.08.  Reports to Holders.  The Company will deliver to the Trustee
within 15 days after filing of the same with the Commission, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, which the Company is

 

44

 

required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act.  Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company will file with the Commission, to the extent
permitted, and provide the Trustee and Holders with such annual reports and
such information, documents and other reports specified in Sections 13 and
15(d) of the Exchange Act.  The Company
will also comply with the other provisions of Section 314(a) of the TIA.

 

SECTION 4.09.  Waiver of Stay, Extension or Usury Laws.  The Company covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Company from paying all or any portion of the principal of or interest on the
Notes as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) the Company hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.

 

SECTION 4.10.  Limitation on Restricted Payments.  The Company will not and will not cause or
permit any of its Restricted Subsidiaries to, directly or indirectly, (1)
declare or pay any dividend or make any distribution (other than dividends or
distributions payable in Qualified Capital Stock of the Company or warrants,
options or other rights to acquire Qualified Capital Stock (but excluding any
debt security or Disqualified Capital Stock convertible into, or exchangeable
for, Qualified Capital Stock)) on or in respect of shares of the Company’s
Capital Stock to holders of such Capital Stock, (2) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock, (3) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness of the Company that is subordinate or junior in right
of payment to the Notes, or (4) make any Investment (other than Permitted
Investments) (each of the foregoing actions set forth in clauses (1), (2) (3)
and (4) being referred to as a “Restricted Payment”), if at the time of
such Restricted Payment or immediately after giving effect thereto, (A) a
Default or an Event of Default shall have occurred and be continuing,
(B) the Company is not able to incur at least $1.00 of additional
Indebtedness under the first paragraph of clause (1) of Section 4.12,
or (C) the aggregate amount of Restricted Payments (including such
proposed Restricted Payment but excluding the Distribution) made subsequent to the
Issue Date (the amount expended for such purposes, if other than in cash, being
the fair market value of such property as determined reasonably and in good
faith by the Board of Directors of the Company, whose determination shall be
conclusive) shall exceed the sum, without duplication, of:  (i) 50% of the cumulative Consolidated Net
Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss) of the Company earned during the period beginning on the first day
of the fiscal quarter which includes the Issue Date and ending on the last day
of the last fiscal quarter that precedes the date the Restricted Payment occurs
(the “Reference Date”) for which a financial statement relating to such
fiscal quarter has been filed or furnished in a report with the Commission
(treating such period as a single accounting period); plus (ii) 100% of
the aggregate net cash proceeds received by the Company from any Person (other
than a Subsidiary of the

 

45

 

Company) from the
issuance and sale subsequent to the Issue Date and on or prior to the Reference
Date of Qualified Capital Stock of the Company (other than Preferred Stock to
the extent that the net cash proceeds therefrom are or are expected to be used
to fund the Distribution and other than proceeds of Qualified Capital Stock to
the extent that they are used pursuant to clause (14) of the definition of
“Permitted Investments” in Section 1.01); plus (iii) 100% of the
aggregate net cash proceeds received after the Issue Date by the Company from
the issuance or sale (other than to a Subsidiary of the Company) of debt
securities or Disqualified Capital Stock (other than the Preferred Stock to the
extent that the net cash proceeds therefrom are or are expected to be used to
fund the Distribution) that have been converted into or exchanged for Qualified
Capital Stock of the Company, together with (without duplication) any net cash
proceeds received by the Company at the time of such conversion or exchange;
plus (iv) to the extent not otherwise included in the Consolidated Net Income
of the Company, an amount equal to the net reduction in Investments (other than
reductions in Permitted Investments) in Unrestricted Subsidiaries resulting
from the payments in cash of interest on Indebtedness, dividends, repayments of
loans or advances or other transfers of assets, in each case to the Company or
a Restricted Subsidiary or from the redesignation of an Unrestricted Subsidiary
as a Restricted Subsidiary; plus (v) to the extent not otherwise included in
Consolidated Net Income, net cash proceeds from sale of Investments which were
treated as Restricted Payments, but not to exceed the amounts so treated; plus
(vi) without duplication of any amounts included in clauses (C)(ii) and
(C)(iii) of this Section 4.10, 100% of the aggregate net cash
proceeds of any equity contribution received by the Company from a holder of
the Company’s Capital Stock other than proceeds of a Capital Contribution to
the extent that they are used pursuant to clause (14) of the definition of
“Permitted Investments” in Section 1.01.

 

Notwithstanding the foregoing, the provisions set
forth in the immediately preceding paragraph do not prohibit:  (1) the payment of any dividend or
redemption payment within 60 days after the date of declaration of such
dividend or redemption payment if the dividend or redemption payment would have
been permitted on the date of declaration; (2) the acquisition of any shares of
Capital Stock of the Company, either: (A) solely in exchange for shares of
Qualified Capital Stock of the Company (or warrants, options or other rights to
acquire Qualified Capital Stock of the Company (but excluding any debt security
or Disqualified Capital Stock convertible into, or exchangeable for, Qualified
Capital Stock)), or (B) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of shares of Qualified Capital Stock of the Company (or warrants,
options or other rights to acquire Qualified Capital Stock of the Company (but
excluding any debt security or Disqualified Capital Stock convertible into, or
exchangeable for, Qualified Capital Stock)); (3) the acquisition of any
Indebtedness of the Company or of any Guarantor that is subordinate or junior
in right of payment to the Notes or such Guarantor’s Guarantee, as the case may
be, either: (A) solely in exchange (i) for shares of Qualified Capital
Stock of the Company (or warrants, options or other rights to acquire Qualified
Capital Stock of the Company (but excluding any debt security or Disqualified
Capital Stock convertible into, or exchangeable for, Qualified Capital Stock));
or (ii) Refinancing Indebtedness; or (B) through the application of net
proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of (i) shares of Qualified Capital Stock of the
Company (or warrants, options or other rights to acquire Qualified Capital
Stock of the Company (but excluding any debt security or Disqualified Capital
Stock convertible into, or exchangeable for, Qualified Capital Stock)); or (ii)
Refinancing Indebtedness; (4) the purchase of any Subordinated Indebtedness at
a purchase price not greater

 

46

 

than 101% of the
principal amount thereof in the event of a Change of Control in accordance with
provisions similar to Section 4.15; provided that prior to such purchase the Company has made
the Change of Control Offer as provided in Section 4.15 with
respect to the Notes and has purchased all Notes validly tendered for payment
in connection with such Change of Control Offer and that no Default or Event of
Default is in existence prior to or as a result of such purchase; (5) so long
as no Default or Event of Default shall have occurred and be continuing,
repurchases by the Company of Equity Interests of the Company from employees,
consultants or directors of the Company or any of its Subsidiaries or their
authorized representatives upon or within 270 days after the death, disability
or termination of employment, consultancy or directorships of such employees,
consultants or directors, in an amount not to exceed (A) a cumulative amount
equal to $10.0 million per fiscal year (or partial fiscal year) beginning with
the fiscal year that included the Issue Date, minus (B) the aggregate amount of
Restricted Payments made pursuant to this clause (5); provided, however,
that the aggregate amount of Restricted Payments made pursuant to this clause
(5) shall not exceed $30.0 million in the aggregate from and after the Issue
Date; (6) the repurchase of Equity Interests deemed to occur upon the exercise
of stock options if such Equity Interests represent a portion of the exercise
price of such stock options; (7) for the avoidance of doubt only, payments
pursuant to the Management Agreement; (8) other Restricted Payments pursuant to
this clause (8) not to exceed $30.0 million in the aggregate from and after the
Issue Date; (9) the acquisition of, declaration or payment of dividends (other
than dividends paid in Disqualified Capital Stock) on, Equity Interests of the
Company in connection with the consummation of the Distribution, but excluding
any dividends declared or paid on the preferred stock issued in connection with
the consummation of the Distribution; (10) after the Holding Company Merger,
payments to the Parent pursuant to this clause (10), (A) to enable the Parent
to pay the federal, state, local, or foreign tax liabilities of itself, and of
the Company and its Subsidiaries for which it is liable; such payment shall be
determined assuming that the Parent, the Company, and the Subsidiaries file a
consolidated Federal (and where actually filed, consolidated, combined, unitary
or similar returns for state, local or foreign purposes) tax return with the
Parent as the Parent and the Company and the Subsidiaries as members and that
the Parent has no substantial assets other than the stock of the Company and
any tax payments shall either be used by the Parent to pay such tax liabilities
within 90 days of the Parent’s receipt of such payment or refunded to the
payee, and (B) in an aggregate amount not to exceed $10.0 million per year in
order to pay legal and accounting expenses, payroll and other compensation expenses
in the ordinary course of business, and other corporate overhead expenses in
the ordinary course of business; and (11) for the avoidance of doubt, the
distribution of any Equity Interests of any Subsidiary of the Company for the
purpose of establishing a holding company structure in compliance with Section 5.01.

 

In determining the aggregate amount of Restricted
Payments made subsequent to the Issue Date in accordance with clause
(C) of the first paragraph of this Section 4.10, amounts
expended pursuant to clauses (2)(A), (3)(A), (3)(B)(ii), (6), (7), (9), (10)
and (11) shall be excluded in such calculation and amounts expended pursuant to
clauses (1), (2)(B), (3)(B)(i), (4), (5) and (8) shall be included in such
calculation.

 

Not later than (1) 5 days after making any Restricted
Payment in excess of $5.0 million or the last or the last Restricted Payment of
a series of related Restricted Payments in excess of $5.0 million, or (2) 45
days after the end of any fiscal quarter in which the Company and Restricted
Subsidiaries made Restricted Payments in excess of $2.5 million, the Company

 

47

 

shall deliver to the
Trustee an Officers’ Certificate stating that such Restricted Payment (or
Restricted Payments) complies with this Indenture and setting forth in
reasonable detail the basis upon which the required calculations were computed,
which calculations may be based upon the Company’s latest available internal
quarterly financial statements; provided,
however, that no such officer’s certificate shall be required in
connection with Restricted Payments made pursuant to clauses (2)(A), (3)(A),
(3)(B)(ii), (6), (9), (10) and (11) or payments pursuant to the Management
Agreement pursuant to clause (7) of the immediately preceding paragraph.

 

SECTION 4.11.  Limitation on Transactions with
Affiliates.

 

(1) 
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an “Affiliate
Transaction”), other than: (A) Affiliate Transactions permitted under
clause (2) of this Section 4.11 and (B) Affiliate Transactions on
terms that are no less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm’s-length basis from
a Person that is not an Affiliate of the Company or such Restricted
Subsidiary.  All Affiliate Transactions
(and each series of related Affiliate Transactions which are similar or part of
a common plan) involving aggregate payments or other property with a fair
market value in excess of $1.5 million shall be approved by the Board of
Directors of the Company or such Restricted Subsidiary, as the case may be,
such approval to be evidenced by a Board Resolution delivered to the Trustee
stating that such Board of Directors has determined that such transaction
complies with the foregoing provisions. 
If the Company or any Restricted Subsidiary of the Company enters into
an Affiliate Transaction (or a series of related Affiliate Transactions related
to a common plan) that involves an aggregate fair market value of more than
$20.0 million, the Company or such Restricted Subsidiary, as the case may be,
shall, prior to the consummation thereof, obtain a favorable opinion as to the
fairness of such transaction or series of related transactions to the Company
or the relevant Restricted Subsidiary, as the case may be, from a financial
point of view, from an Independent Financial Advisor and file the same with the
Trustee.

 

(2) 
The restrictions set forth in clause (1) shall not apply to:
(A) fees and compensation paid to and indemnity provided on behalf of,
officers, directors, employees or consultants of the Company or any Restricted
Subsidiary of the Company in the ordinary course of business of the Company or
such Restricted Subsidiary; (B) transactions exclusively between or among
the Company and any of its Restricted Subsidiaries or exclusively between or
among such Restricted Subsidiaries, provided
that such transactions are not otherwise prohibited hereunder; (C) any
agreement as in effect as of the Issue Date or any amendment thereto or any
transaction contemplated thereby (including pursuant to any amendment thereto)
in any replacement agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the Holders in any
material respect than the original agreement as in effect on the Issue Date;
(D) so long as no Default or Event of Default has occurred and is
continuing, the payment of amounts owing pursuant to the Management Agreement;
(E) issuance of employee stock options approved by the Board of Directors
of the Company and the shareholders of the Company; (F) transactions
effected as part of a Qualified Securitization Transaction; (G) Restricted
Payments permitted by, and Permitted Investments made in

 

48

 

accordance with, this
Indenture; (H) any sale or issuance of Equity Interests of the Company (other
than Disqualified Capital Stock) to any Affiliate of the Company and the
entering into and performance of any obligations under any investors’ rights
agreement, any management rights agreement or other customary agreements
entered into in connection with such sale or issuance; (I) declaration and
payment of the Distribution; (J) the sale of the Preferred Stock, the net
proceeds of which are or will be used for the Distribution, on substantially
the terms described in the Company’s Final Offering Memorandum relating to the
issuance of the Notes, and the entering into and performance of any obligations
under any investors’ rights agreement, any management rights agreement or other
customary agreements entered into in connection therewith; (K) payment of
bonuses to and purchases of Equity Interests from employees, directors and
consultants of the Company or any Restricted Subsidiary; and (L) the
distribution of any Equity Interests of any Subsidiary of the Company for the
purpose of establishing a holding company structure in compliance with
Article Five.

 

SECTION 4.12.  Limitation on Incurrence of Additional
Indebtedness.  (1)  The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume, guarantee, acquire, become liable, contingently or otherwise, with
respect to, or otherwise become responsible for payment of (collectively, “incur”)
any Indebtedness; provided, however,
that if no Default or Event of Default shall have occurred and be continuing at
the time of or as a consequence of the incurrence of any such Indebtedness, the
Company or any of its Restricted Subsidiaries may incur Indebtedness
(including, without limitation, Acquired Indebtedness) if on the date of the
incurrence of such Indebtedness, after giving effect to the incurrence thereof,
the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted
Subsidiaries is greater than 2.0 to 1.0.

 

Notwithstanding the foregoing, the Company and any
Restricted Subsidiary (except as specified in this Section 4.12)
may incur each and all of the following:

 

(A) Indebtedness under the Notes offered hereby and
the Guarantees thereof;

 

(B) Indebtedness incurred pursuant to the Credit
Agreement in an aggregate principal amount at any time outstanding not to
exceed $580.0 million, less

 

(i) the aggregate amount of any Indebtedness of
Securitization Entities in Qualified Securitization Transactions incurred at a
time that the Company is not able to incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of this clause (a), provided that
the Company may elect in writing to the Trustee to have the amount of said
reduction resulting from such Indebtedness incurred in connection with a
Qualified Securitization Transaction to be reduced by an amount (the “Transferred
Reduction Amount”) up to the then remaining amount of Indebtedness that
could be incurred pursuant to clause (M) of this Section 4.12, and
in the event of such election, the amount of Indebtedness that can be incurred
pursuant to clause (M) of this Section 4.12 will be reduced by the
Transferred Reduction Amount,

 

(ii) the amount of all scheduled principal payments
actually made by the Company (excluding any such payment to the extent such
payment is made with the proceeds of Indebtedness incurred at the time of
repayment) and

 

49

 

(iii) the amount of all required permanent prepayments
of Indebtedness under the Credit Agreement actually made with the proceeds of
an Asset Sale;

 

The aggregate amount of reductions under subclauses
(1)(B)(i), (1)(B)(ii) and (1)(B)(iii) of this Section 4.12 at any
time can be established by the Company by providing the Trustee with an
Officers’ Certificate setting forth the calculations for such amount.

 

(C) Indebtedness of Foreign Subsidiaries not to exceed
$40.0 million (or the equivalent amount thereof, at the time of incurrence, in
other foreign currencies) at any time outstanding pursuant to this clause (C);

 

(D) other Indebtedness of the Company and its
Restricted Subsidiaries outstanding on the Issue Date reduced by the amount of
any scheduled amortization payments or permanent mandatory prepayments when
actually paid or permanent reductions thereon;

 

(E) Interest Swap Obligations of the Company covering
Indebtedness of the Company or any of its Restricted Subsidiaries and Interest
Swap Obligations of any Restricted Subsidiary of the Company covering
Indebtedness of such Restricted Subsidiary; provided,
however, that such Interest Swap
Obligations are entered into for the purpose of fixing or hedging interest rate
risk with respect to any floating and/or fixed rate on Indebtedness incurred in
accordance with the Indenture to the extent the notional principal amount of
such Interest Swap Obligation does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligation relates and not with the
purpose of speculation;

 

(F) Indebtedness under Currency Agreements; provided that such Currency Agreements do
not increase the Indebtedness of the Company and its Restricted Subsidiaries
outstanding other than as a result of fluctuations in foreign currency exchange
rates or by reason of fees, indemnities and compensation payable thereunder;

 

(G) Indebtedness of a Restricted Subsidiary of the
Company to the Company or to a Restricted Subsidiary of the Company for so long
as such Indebtedness is held by the Company or a Restricted Subsidiary of the
Company, in each case subject to no Lien (other than a Lien in connection with
the Credit Agreement and Permitted Liens which are not consensual) held by a
Person other than the Company or a Restricted Subsidiary of the Company; provided that if as of any date any Person
other than the Company or a Restricted Subsidiary of the Company owns or holds
any such Indebtedness or holds a Lien in respect of such Indebtedness (other
than a Lien in connection with the Credit Agreement and Permitted Liens which
are not consensual), such date shall be deemed the incurrence of Indebtedness
which is not allowed by this clause (G);

 

(H) Indebtedness of the Company to a Restricted Subsidiary
of the Company for so long as such Indebtedness is held by a Restricted
Subsidiary of the Company, in each case subject to no Lien (other than a Lien
in connection with the Credit Agreement and Permitted Liens which are not
consensual); provided that (i)
any Indebtedness of the Company to any Restricted Subsidiary of the Company
(other than a Restricted Subsidiary which is a Guarantor) is unsecured and
subordinated, pursuant to a written agreement, to the Company’s obligations
under the Indenture and the Notes and (ii) if as of any date any Person other
than a Restricted Subsidiary of the Company owns or holds any such Indebtedness
or any Person holds a Lien in

 

50

 

respect of such
Indebtedness (other than a Lien in connection with the Credit Agreement and
Permitted Liens which are not consensual), such date shall be deemed the
incurrence of Indebtedness which is not allowed by this clause (H);

 

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

 

(J) Indebtedness represented by performance bonds,
warranty or contractual service obligations, standby letters of credit or
appeal bonds, in each case to the extent incurred in the ordinary course of
business of the Company or such Restricted Subsidiary in accordance with
customary industry practices, in amounts and for the purposes customary in the
Company’s industry;

 

(K) the incurrence by a Securitization Entity of
Indebtedness in a Qualified Securitization Transaction that is not recourse to
the Company or any Subsidiary of the Company (except for Standard
Securitization Undertakings);

 

(L) Refinancing Indebtedness;

 

(M) additional Indebtedness of the Company and its
Restricted Subsidiaries in an aggregate principal amount not to exceed $100.0
million at any one time outstanding (which may be Indebtedness under the Credit
Agreement in addition to that permitted by clause (B)); and

 

(N) Acquired Indebtedness, and refinancings or
replacements thereof, not to exceed $50.0 million at any one time outstanding
pursuant to this clause (N).

 

(2) For purposes of
determining any particular amount of Indebtedness under this Section 4.12,
Indebtedness incurred under the Credit Agreement on or prior to the Issue Date
shall be treated as incurred pursuant to subclause (B) of clause (1) of this Section 4.12.  For purposes of determining compliance with
this Section 4.12, in the event that an item of Indebtedness at any
time could have been incurred (regardless of when it was actually incurred)
under more than one of the types of Indebtedness described of this Section 4.12
(other than Indebtedness incurred under the Credit Agreement on or prior to the
Issue Date, which shall be treated as incurred pursuant to subclause (B) of
clause (1) of this Section 4.12), including under the first
paragraph of clause (1) of this Section 4.12, the Company, in its
sole discretion, shall classify, and at any such time may reclassify, such item
of Indebtedness.

 

SECTION 4.13.  Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries.  The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause
or permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (1) pay dividends or
make any other distributions on or in respect of its Capital Stock to the
Company or any of its Restricted Subsidiaries; (2) make loans or advances or to
pay any Indebtedness or other obligation owed to the Company or any other
Restricted Subsidiary of the Company; or (3) transfer any of its property or
assets to the Company or any other Restricted Subsidiary of the Company, except
for such encumbrances or restrictions existing under or by

 

51

 

reason of:  (A) applicable law; (B) this Indenture; (C)
customary non-assignment provisions of any contract or any lease governing a
leasehold interest of any Restricted Subsidiary of the Company; (D) any
instrument governing Acquired Indebtedness, which encumbrance or restriction is
not applicable to any Restricted Subsidiaries, or the properties or assets of
any Restricted Subsidiaries, other than the Person or such Person’s
Subsidiaries or the properties or assets of the Person so acquired or such
Person’s Subsidiaries; (E) agreements existing on the Issue Date to the extent
and in the manner such agreements are in effect on the Issue Date; (F) any
agreement to sell assets or Capital Stock permitted under this Indenture to any
Person pending the closing of such sale; (G) any instrument governing a
Permitted Lien, to the extent and only to the extent such instrument restricts
the transfer or other disposition of assets subject to such Permitted Lien; (H)
restrictions on cash or other deposits imposed by customers under contracts
entered into in the ordinary course of business; (I) customary provisions in
joint venture agreements and other similar agreements; (J) the documentation
relating to Indebtedness of Foreign Subsidiaries incurred pursuant to the terms
of this Indenture, provided that such encumbrances or
restrictions are not more restrictive than those contained in the Credit
Agreement; (K) the Credit Agreement; (L) the documentation relating to other
Indebtedness permitted to be incurred subsequent to the Issue Date pursuant to
the provisions of Section 4.12, provided that such encumbrances or
restrictions are not more restrictive than those contained in the Credit Agreement;
(M) the documentation relating to Indebtedness of a Securitization Entity in
connection with a Qualified Securitization Transaction; provided that such
restrictions apply only to such Securitization Entity; or (N) an agreement
governing Indebtedness incurred to Refinance the Indebtedness issued, assumed
or incurred pursuant to an agreement referred to in subclause (B), (D), (E) or
(K) of this clause (3); provided, however, that the provisions
relating to such encumbrance or restriction contained in any such Indebtedness
are no less favorable to the Company in any material respect as determined by
the Board of Directors of the Company in their reasonable and good faith
judgment than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (B), (D), (E) or (K) of this
clause (3).  Nothing contained in this Section 4.13
shall prevent the Company or any Subsidiary of the Company from creating,
incurring, assuming or suffering to exist any Permitted Liens.

 

SECTION 4.14.  Limitation on Restricted and Unrestricted
Subsidiaries.

 

(1) 
The Board of Directors may designate any Subsidiary (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any
property of, the Company or any Restricted Subsidiary of the Company that is
not a Subsidiary of the Subsidiary to be so designated; provided that (A) the Company
certifies to the Trustee that such designation complies with Section 4.10
and (B) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness pursuant to which the lender has recourse to any of
the assets of the Company or any of its Restricted Subsidiaries (other than the
assets of such Restricted Subsidiary to be designated an Unrestricted
Subsidiary and its Subsidiaries).

 

(2) 
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary only if (A) immediately after giving effect to such
designation, the Company is able to incur at least $1.00 of additional
Indebtedness (other than Permitted

 

52

 

Indebtedness) in
compliance with Section 4.12 unless such designated Subsidiary
shall, at the time of designation, have no Indebtedness outstanding other than
Indebtedness pursuant to Section 4.12, and (B) immediately
before and immediately after giving effect to such designation, no Default or
Event of Default shall have occurred and be continuing.  Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing provisions.

 

(3)           Other than Federal Express Trust No. 1991-B
and Federal Express Trust No. 1991-A, subsidiaries of the Company that are not
designated by the Board of Directors of the Company as Restricted or
Unrestricted Subsidiaries will be deemed to be Restricted Subsidiaries of the
Company.

 

SECTION 4.15.  Change of Control.

 

(1) 
Upon the occurrence of a Change of Control, the Company will make an
offer described in this Section 4.15 (the “Change of Control
Offer”), and each Holder will have the right to require that the Company
purchase all or a portion of such Holder’s Notes, at a purchase price equal to
101% of the principal amount thereof plus accrued interest to the date of
purchase.

 

(2) 
Prior to the mailing of the notice referred to in Section 4.15(3),
but in any event within 30 days following any Change of Control, the Company
will: (A) obtain the requisite consents under the Credit Agreement (so
long as the terms of which provide that a Change of Control would result in a
default or event of default or would otherwise require repayment) and all other
Senior Debt (the terms of which provide that a Change of Control would result
in a default or event of default or would otherwise require repayment) to
permit the repurchase of the Notes as provided in this Section 4.15,
or (B) in the event a consent is not obtained with respect to such Credit
Agreement or any such other Senior Debt, repay in full and terminate all
commitments under Indebtedness under such Credit Agreement or such other Senior
Debt, as the case may be, or offer to repay in full and terminate all commitments
under all Indebtedness under such Credit Agreement or such other Senior Debt,
as the case may be, and to repay the Indebtedness owed to each lender which has
accepted such offer.  The Company shall
first comply with the covenant in the immediately preceding sentence before it
shall be required to repurchase Notes pursuant to the provisions described in
this Section 4.15.  The
Company’s failure to comply with the first sentence of this paragraph shall be
governed by Section 6.01(3) and not Section 6.01(2).

 

(3) 
Within 30 days following the date upon which a Change of Control occurs,
the Company must send, by first class mail, a notice to each Holder at such
Holder’s last registered address, with a copy to the Trustee, which notice
shall govern the terms of the Change of Control Offer.  The notice to the Holders shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Change of Control Offer. 
Such notice shall state:

 

(A) that the
Change of Control Offer is being made pursuant to this Section 4.15,
that all Notes tendered and not withdrawn will be accepted for

 

53

 

payment and that the Change of Control Offer
shall remain open for a period of 20 Business Days or such longer period as may
be required by law;

 

(B) the
purchase price (including the amount of accrued interest) and the purchase date
(which shall be no earlier than 30 days nor later than 45 days from the date
such notice is mailed, other than as may be required by law) (the “Change of
Control Payment Date”);

 

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

 

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

 

(E) that
Holders electing to have a Note purchased pursuant to a Change of Control Offer
will be required to surrender the Note, with the form entitled “Option of
Holder to Elect Purchase” on the reverse of the Note completed, to the Paying
Agent at the address specified in the notice prior to the close of business on
the third Business Day prior to the Change of Control Payment Date;

 

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

 

(G) that
Holders whose Notes are purchased only in part will be issued new Notes in a
principal amount equal to the unpurchased portion of the Notes surrendered; provided, however, that each Note
purchased and each new Note issued shall be in an original principal amount of
$1,000 or integral multiples thereof; and

 

(H) the
circumstances and relevant facts regarding such Change of Control.

 

On or before the Change of Control Payment Date, the
Company shall (i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent, in accordance with Section 2.14, U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Notes so tendered and (iii) deliver to the Trustee Notes so accepted
together with an Officers’ Certificate stating the Notes or portions thereof
being purchased by the Company.  Upon
receipt by the Paying Agent of the monies specified in clause (2) of this Section 4.15
and a copy of the Officers’ Certificate specified in clause (3) of this Section 4.15,
the Paying Agent shall promptly mail to the Holders of Notes so accepted
payment in an amount equal to the purchase price plus accrued interest, if any,
and the Trustee shall promptly authenticate and mail to such Holders new Notes
equal in principal amount to any unpurchased portion of the Notes surrendered.  For purposes of this Section 4.15,
the Trustee shall act as the Paying Agent.

 

54

 

Neither the Board of Directors of the Company nor the
Trustee may waive the provisions of this Section 4.15 relating to
the Company’s obligation to make a Change of Control Offer.

 

The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to a Change of Control Offer.  To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section 4.15,
the Company shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations under the provisions
of this Section 4.15 by virtue thereof.

 

SECTION 4.16.  Limitation on Asset Sales.

 

The Company will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless: (1) the
Company or the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined in good faith
by the Company’s Board of Directors), (2) at least 75% of the
consideration received by the Company or the Restricted Subsidiary, as the case
may be, from such Asset Sale shall be in the form of cash or Cash Equivalents
and is received at the time of such disposition provided that for purposes of this provision, the amount of
(A) any liabilities (as shown on the most recent balance sheet of the Company
or such Restricted Subsidiary or in the notes thereto) of the Company or such
Restricted Subsidiary that are assumed by the transferee of any such assets
(other than liabilities that are by their terms pari passu with or subordinated to the Notes or the
guarantee of the Guarantors, as applicable) and (B) any securities or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash or Cash Equivalents (or (i) are Marketable Securities that
are actually sold for cash or Cash Equivalents within 180 days of the
consummation of such Asset Sale or (ii) as to which the Company or such
Restricted Subsidiary has received at or prior to the consummation of the Asset
Sale a commitment (which may be subject to customary conditions) from a
nationally recognized investment, merchant or commercial bank to convert into
cash or Cash Equivalents within 180 days of the consummation of such Asset Sale
and which are thereafter actually converted into cash or Cash Equivalents
within such 180-day period) will be deemed to be cash or Cash Equivalents (and
shall be deemed to be Net Cash Proceeds for purposes of the following
provisions as and when reduced to cash or Cash Equivalents) to the extent of
the net cash or Cash Equivalents realized thereon, and (3) upon the
consummation of an Asset Sale, the Company shall apply, or cause such
Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset
Sale within 365 days of receipt thereof either: (A) to repay or prepay any
Senior Debt and, in the case of any Senior Debt under any revolving credit
facility, effect a permanent reduction in the availability under such revolving
credit facility, (B) to make an investment (or shall have entered into a
binding commitment to make such an investment within 180 days) in properties
and assets that replace the properties and assets that were the subject of such
Asset Sale or in properties and assets that will be used in the business of the
Company and its Subsidiaries as existing on the Issue Date or in businesses
which are the same, similar or reasonably related or complementary to the
businesses in which the Company and its Restricted Subsidiaries are engaged on
the Issue Date

 

55

 

(“Replacement Assets”),
or (C) a combination of prepayment and investment permitted by the foregoing
clauses (3)(A) and (3)(B).  On the 366th
day after an Asset Sale or such earlier date, if any, as the Board of Directors
of the Company or of such Restricted Subsidiary determines not to apply the Net
Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(A),
(3)(B) and (3)(C) of the next preceding sentence (each, a “Net Proceeds
Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have
not been applied (or committed to the purchase of replacement assets) on or
before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(A),
(3)(B) and (3)(C) of the next preceding sentence (each a “Net Proceeds Offer
Amount”) shall be applied by the Company or such Restricted Subsidiary to
make an offer to purchase (the “Net Proceeds Offer”) on a date (the “Net
Proceeds Offer Payment Date”) not less than 30 nor more than 45 days
following the applicable Net Proceeds Offer Trigger Date, from all Holders on a
pro rata basis, that amount of
Notes equal to the Net Proceeds Offer Amount at a price equal to 100% of the
principal amount of the Notes to be purchased, plus accrued and unpaid interest
thereon, if any, to the date of purchase; provided,
however, that if at any time any non-cash consideration received by
the Company or any Restricted Subsidiary of the Company, as the case may be, in
connection with any Asset Sale is converted into or sold or otherwise disposed
of for cash (other than interest received with respect to any such non-cash
consideration), then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this Section 4.16.  The Company may defer the Net Proceeds Offer
until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in
excess of $10.0 million resulting from one or more Asset Sales (at which time,
the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess
of $10.0 million, shall be applied as required pursuant to this paragraph).

 

In the event of the transfer of substantially all (but
not all) of the property and assets of the Company and its Restricted
Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01,
the successor corporation shall be deemed to have sold the properties and
assets of the Company and its Restricted Subsidiaries not so transferred for
purposes of this Section 4.16, and shall comply with the provisions
of this Section 4.16 with respect to such deemed sale as if it were
an Asset Sale.  In addition, the fair
market value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this Section 4.16.

 

(1)           Notwithstanding
the two immediately preceding paragraphs, the Company and its Restricted
Subsidiaries will be permitted to consummate an Asset Sale without complying
with such paragraphs to the extent (A) the consideration for such Asset Sale
constitutes Replacement Assets and (B) such Asset Sale is for fair market
value.

 

(2)           Each
notice of a Net Proceeds Offer pursuant to this Section 4.16 shall
be mailed or caused to be mailed, by first class mail, by the Company not more
than 25 days after the Net Proceeds Offer Trigger Date to all Holders at their
last registered addresses, with a copy to the Trustee.  The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Net Proceeds Offer and shall state the following terms:

 

(A)          that
the Net Proceeds Offer is being made pursuant to this Section 4.16,
that all Notes tendered will be accepted for payment; provided, however, that if the aggregate
principal amount of Notes tendered in a Net Proceeds Offer plus

 

56

 

accrued interest at the expiration of such offer
exceeds the aggregate amount of the Net Proceeds Offer, the Company shall
select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by
the Company so that only Notes in denominations of $1,000 or multiples thereof
shall be purchased) and that the Net Proceeds Offer shall remain open for a
period of 20 Business Days or such longer period as may be required by law;

 

(B)           the
purchase price (including the amount of accrued interest) and the Net Proceeds
Offer Payment Date (which shall be not less than 30 nor more than 45 days
following the applicable Net Proceeds Offer Trigger Date and which shall be at
least three Business Days after the Trustee receives notice thereof from the
Company unless a shorter period shall be agreed to by the Trustee);

 

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

 

(D)          that,
unless the Company defaults in making payment therefor, any Note accepted for
payment pursuant to the Net Proceeds Offer shall cease to accrue interest after
the Net Proceeds Offer Payment Date;

 

(E)           that
Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will
be required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day prior to the Net Proceeds Offer Payment Date;

 

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

 

(G)           that
Holders whose Notes are purchased only in part will be issued new Notes in a
principal amount equal to the unpurchased portion of the Notes surrendered; provided, however, that each Note
purchased and each new Note issued shall be in an original principal amount of
$1,000 or integral multiples thereof.

 

On or before the Net Proceeds Offer Payment Date, the
Company shall (1) accept for payment Notes or portions thereof tendered
pursuant to the Net Proceeds Offer which are to be purchased in accordance with
item (2)(B) of this Section 4.16, (2) deposit with the
Paying Agent in accordance with Section 2.14 U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Notes to be purchased and (3) deliver to the Trustee Notes so accepted together
with an Officers’ Certificate stating the Notes or portions thereof being
purchased by the Company.  The Paying
Agent shall promptly mail to the Holders of Notes so accepted payment in an
amount equal to the purchase price plus accrued interest, if any.  For purposes of this Section 4.16,
the Trustee shall act as the Paying Agent. 
The Trustee shall promptly authenticate and mail to such Holders new
Notes equal in principal amount to any

 

57

 

unpurchased portion of
the Notes surrendered.  Upon the payment
of the purchase price for the Notes accepted for purchase, the Trustee shall
either cancel the Notes or return the Notes purchased to the Company for
cancellation.  Any monies remaining
after the purchase of Notes pursuant to a Net Proceeds Offer shall be returned
within three Business Days by the Trustee to the Company except with respect to
monies owed as obligations to the Trustee pursuant to Article Seven.  For purposes of this Section 4.16,
the Trustee shall act as the Paying Agent.

 

To the extent the amount of Notes tendered pursuant to
any Net Proceeds Offer is less than the amount of Net Cash Proceeds subject to
such Net Proceeds Offer, the Company may use any remaining portion of such Net
Cash Proceeds not required to fund the repurchase of tendered Notes for general
corporate purposes and such Net Proceeds Offer Amount shall be reset to zero.

 

The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to a Net Proceeds Offer.  To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 4.16,
the Company shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations under the provisions
of this Indenture by virtue thereof.

 

SECTION 4.17.  Limitation on Preferred Stock of
Restricted Subsidiaries.  The
Company will not permit any of its Restricted Subsidiaries to issue any
Preferred Stock (other than to the Company or to a Wholly Owned Restricted
Subsidiary of the Company) or permit any Person (other than the Company or a
Wholly Owned Restricted Subsidiary of the Company) to own any Preferred Stock
of any Restricted Subsidiary of the Company.

 

SECTION 4.18.  Limitation
on Liens Securing Indebtedness.  The
Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or permit or
suffer to exist any Liens of any kind securing any Indebtedness against or upon
any property or assets of the Company or any of its Restricted Subsidiaries whether
owned on the Issue Date or acquired after the Issue Date, or any proceeds
therefrom, or assign or otherwise convey any right to receive income or profits
therefrom to secure any Indebtedness unless: (1) in the case of Liens
securing Indebtedness that is expressly subordinate or junior in right of
payment to the Notes or any Guarantee, the Notes and such Guarantee, as the
case may be, are secured by a Lien on such property, assets or proceeds that is
senior in priority to such Liens, and (2) in all other cases, the Notes
and the Guarantees are equally and ratably secured, except for (A) Liens
existing as of the Issue Date to the extent and in the manner such Liens are in
effect on the Issue Date; (B) Liens securing Indebtedness incurred under the
Credit Agreement; (C) Liens securing Senior Debt and Liens securing Guarantor
Senior Debt; (D) Liens securing the Notes and the Guarantees; (E) Liens of the
Company or a Restricted Subsidiary of the Company on assets of any Subsidiary
of the Company; (F) Liens securing Refinancing Indebtedness which is incurred
to Refinance any Indebtedness which has been secured by a Lien permitted under
this Indenture and which has been incurred in accordance with the provisions of
this Indenture; provided, however, that such Liens
(i) are no less favorable to the Holders and are not more favorable to the
lienholders with respect to such Liens than the Liens in respect of the
Indebtedness being Refinanced and (ii) do not extend to or cover any

 

58

 

property or assets of the
Company or any of its Restricted Subsidiaries not securing the Indebtedness so
Refinanced; and (G) Permitted Liens.

 

SECTION 4.19.  [Intentionally Omitted].

 

SECTION 4.20.  Additional Subsidiary Guarantees.  If the Company or any of its Restricted
Subsidiaries transfers or causes to be transferred, in one transaction or a
series of related transactions, any property to any Restricted Subsidiary
(other than a Foreign Subsidiary or Securitization Entity) that is not a
Guarantor and that has total assets with a book value in excess of $500,000
after giving effect to such transfer, or if the Company or any of its
Restricted Subsidiaries shall organize, acquire or otherwise invest in another
Restricted Subsidiary (other than a Foreign Subsidiary or a Securitization
Entity) having total assets with a book value in excess of $500,000 that is not
already a Guarantor, then such transferee or acquired or other Restricted
Subsidiary shall within 15 days of the end of the next succeeding fiscal
quarter (unless the book value of such Restricted Subsidiary is in excess of
$5.0 million in which case, contemporaneously with the organization,
acquisition or other investment in such Restricted Subsidiary, as the case may
be) (1) execute and deliver to the Trustee a supplemental indenture in
form reasonably satisfactory to the Trustee pursuant to which such Restricted
Subsidiary shall unconditionally guarantee all of the Company’s obligations
under the Notes and this Indenture on the terms set forth in this Indenture and
(2) deliver to the Trustee an Opinion of Counsel that such supplemental
indenture has been duly authorized, executed and delivered by such Restricted
Subsidiary and constitutes a legal, valid, binding and enforceable obligation
of such Restricted Subsidiary. 
Thereafter, such Restricted Subsidiary shall be a Guarantor for all
purposes of this Indenture.

 

SECTION 4.21.  Prohibition on Incurrence of Senior
Subordinated Debt.  The Company will
not, and will not permit any Guarantor to, incur or suffer to exist
Indebtedness that is senior in right of payment to the Notes or any Guarantee,
as the case may be, and expressly contractually subordinate in right of payment
to any other Indebtedness of the Company or such Guarantor, as the case may be.

 

SECTION 4.22.  Limitation on Repurchase of Equity
Interests from Employees.  The
Company will not, nor will it permit any of its Restricted Subsidiaries to,
repurchase any Equity Interest issued to any officer, employee, director or consultant
pursuant to the terms of the Management Equity Plan other than:

 

(1) a repurchase of any Equity Interest that
is made pursuant to the Distribution;

 

(2) a repurchase of any Equity Interest that
is made after the death or Permanent Disability of such officer, employee,
director or consultant;

 

(3) a repurchase of any Capital Stock which
has been owned by such officer, employee, director or consultant for a period
of time greater than six months;

 

(4) a repurchase of any Equity Interest in
connection with a Change of Control or in connection with a merger or
consolidation, or sale, assignment, transfer, lease, conveyance, or disposition
of all or substantially all or the Company’s assets, which is permitted
pursuant to the terms of Section 5.01;

 

59

 

(5) a repurchase of any Equity Interest at
any point in time at which all options issued and outstanding under the
Management Equity Plan are subject to variable plan accounting pursuant to the
accounting provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”;

 

(6) a repurchase of any Equity Interest to
the extent necessary or advisable pursuant to Section 10 or 13 of the
Management Equity Plan; however, for purposes of clarity, the Company’s call
right upon a participant’s termination of employment, except in the case of
death or Permanent Disability, described in Section 10(a) of the
Management Equity Plan shall not be considered necessary or advisable;

 

(7) a repurchase of any Equity Interest to
the extent used to satisfy Minimum Tax Withholding requirements associated with
the exercise of such Equity Interest; or

 

(8) a repurchase of any Equity Interest at any point
subsequent to the Company’s adoption of the accounting provisions of Financial
Accounting Standards Board Issuance No. 123 — “Accounting
for Stock-Based Compensation”, or any other fair value method of
accounting generally accepted in the United States, such that the repurchase of
such Equity Interest would not trigger liability accounting for all options
under the Management Equity Plan.

 

Notwithstanding the foregoing, the Company and its
Restricted Subsidiaries must comply with the provisions of Articles Four and
Five in connection with such repurchases.

 

SECTION 4.23.  Special Redemption.  On the Closing Date, the Company shall
deposit with the Securities Intermediary as hereinafter provided the net
proceeds from the issuance of the Notes (the “Proceeds”).

 

(1)  In order to secure the full and punctual
payment and performance of the Company’s obligation to redeem the Notes upon a
Special Redemption, if any, the Company hereby grants to the Trustee, for the
ratable benefit of the Holders, a continuing perfected security interest in and
to the Collateral, whether now owned or existing or hereafter acquired or
arising.  The Company shall be required
to effect the Special Redemption upon the occurrence of an event specified in
this Section 4.23 at a redemption price equal to 100% of the
principal amount of the Notes to be redeemed plus accrued and unpaid interest
thereon to the date of redemption.

 

(2) 
At all times until the release of the proceeds in accordance with this Section 4.23
and the Security Agreement, there shall be maintained with the Securities
Intermediary an account (the “Secured Proceeds Account”), which account
shall be under the sole dominion and control of the Securities
Intermediary.  On the Closing Date, the
Company shall cause the Proceeds to be deposited in the Secured Proceeds Account.  Amounts on deposit in the Secured Proceeds
Account shall be held in cash or invested (and reinvested from time to time) in
U.S. Government Obligations or Money Market Funds investing in U.S. Government
Obligations (such investments collectively referred to herein as “Eligible
Investments”), which Eligible Investments shall be held in the Secured
Proceeds Account.  Any income, including
any interest or capital gains received with respect to the balance from time to
time standing to the credit of the Secured Proceeds Account, shall remain, or
be deposited, in the Secured Proceeds Account.

 

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The Securities
Intermediary shall in no event have any liability for any tax, fee, loss or
other charge incurred in connection with the Company’s written instructions to
the Securities Intermediary regarding any investment, reinvestment or
liquidation of any such investment.

 

(3) 
Upon the earlier to occur of (A) any Proceeds being released by the
Securities Intermediary to be used in the redemption of all of the outstanding
Existing Notes and (B) the Special Redemption Date, the security interests
in the Collateral shall automatically terminate.

 

(4) 
Upon receipt by the Securities Intermediary on or prior to
November 7, 2003 of a certificate signed by the President or any Vice
President and any other officer of the Company (the “Redemption Disbursement
Request”) stating, among other things, that the redemption of all of the
outstanding Existing Notes is to be effected on the terms and conditions
described in all material respects in the indenture, as amended, relating to
the Existing Notes on a date specified therein, but no later than
November 7, 2003, and requesting the Securities Intermediary to release
the Proceeds, which along with additional proceeds from the Company, will be
used to effect the redemption of all of the outstanding Existing Notes in
accordance with the terms of the indenture relating to the Existing Notes, the
Securities Intermediary shall disburse all such Proceeds to, or at the
direction of, the Company on the closing date of the redemption (or the
Business Day before such closing date if the trustee with respect to the
Existing Notes so requires) of all of the outstanding Existing Notes, which shall
be specified in such certificate.  If
the redemption of the Existing Notes is not effected on such closing date, the
Company shall redeposit any such Proceeds in the Secured Proceeds Account.  The Redemption Disbursement Request may be
withdrawn by the Company upon written notice to the Securities Intermediary at
anytime on or prior to the business day immediately prior to such closing date.

 

(5) 
If the Securities Intermediary has not received the Redemption
Disbursement Request by 5:00 p.m. New York time on or prior to November 7,
2003 (such an event constituting an “Event of Failure”), the Company
will make an offer described in this Section 4.23 (the “Special
Redemption Offer”), and each Holder will have the right to require that the
Company purchase all or a portion of such Holder’s Notes, at a purchase price
equal to 100% of the principal amount thereof plus accrued interest to the date
of purchase.

 

(A) Within
five days following the date upon which the Event of Failure occurs (the “Special
Redemption Offer Date”), the Company must send, by first class mail, a
notice to each Holder at such Holder’s last registered address, with a copy to
the Trustee, which notice shall govern the terms of the Special Redemption
Offer.  The notice to the Holders shall contain
all instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Offer.  Such notice
shall state:

 

(i)            that
the Special Redemption Offer is being made pursuant to this Section 4.23,
that all Notes tendered and not withdrawn will be accepted for payment and that
the Special Redemption Offer shall remain open until December 1, 2003 or
such longer period as may be required by law;

 

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(ii)           the
purchase price (including the amount of accrued interest) and the purchase date
(which shall be December 1, 2003, other than as may be required by law)
(the “Special Redemption Payment Date”);

 

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

 

(iv)          that,
unless the Company defaults in making payment therefor, any Note accepted for
payment pursuant to the Special Redemption Offer shall cease to accrue interest
after the Special Redemption Payment Date;

 

(v)           that
Holders electing to have a Note purchased pursuant to a Special Redemption
Offer will be required to surrender the Note to the Paying Agent at the address
specified in the notice prior to the close of business on November 26,
2003;

 

(vi)          that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than November 26, 2003, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing its election to have such Notes purchased; and

 

(vii)         that Holders whose Notes are purchased only in
part will be issued new Notes in a principal amount equal to the unpurchased
portion of the Notes surrendered; provided,
however, that each Note purchased and each new Note issued shall be
in an original principal amount of $1,000 or integral multiples thereof.

 

(B) By 10:30
A.M., New York City time, on the Special Redemption Offer Date, the Securities
Intermediary shall disburse all Proceeds to the Paying Agent in connection with
the redemption of the Notes; and

 

(C) On or
before the Special Redemption Payment Date, the Company shall (1) accept
for payment Notes or portions thereof tendered pursuant to the Special
Redemption Offer, (2) deposit with the Paying Agent U.S. Legal Tender,
which along with the Proceeds, that is sufficient to pay the purchase price
plus accrued interest, if any, of all Notes so tendered and (3) deliver to
the Trustee Notes so accepted together with an Officers’ Certificate stating
the Notes or portions thereof being purchased by the Company.  Upon receipt by the Paying Agent of the
monies specified in clause (2) of this Section 4.23 and a copy
of the Officers’ Certificate specified in clause (3) of this Section 4.23,
the Paying Agent shall promptly mail to the Holders of Notes so accepted
payment in an amount equal to the purchase price plus accrued interest, if any,
and the Trustee shall promptly authenticate and mail to such Holders new Notes
equal in principal amount to any unpurchased portion of the Notes surrendered.

 

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ARTICLE FIVE

SUCCESSOR CORPORATION

 

SECTION 5.01.  Merger, Consolidation and Sale of Assets.

 

(1) 
The Company will not, in a single transaction or series of related transactions,
consolidate or merge with or into any Person, or sell, assign, transfer, lease,
convey or otherwise dispose of (or cause or permit any Restricted Subsidiary of
the Company to sell, assign, transfer, lease, convey or otherwise dispose of)
all or substantially all of the Company’s assets (determined on a consolidated
basis for the Company and the Company’s Restricted Subsidiaries) whether as an
entirety or substantially as an entirety to any Person (other than the Company
or any Wholly Owned Restricted Subsidiary that is a Guarantor) unless:  (A) either (i) with respect to such a
consolidation or merger, the Company shall be the surviving or continuing
corporation or (ii) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquires
by sale, assignment, transfer, lease, conveyance or other disposition the
properties and assets of the Company and of the Company’s Restricted
Subsidiaries substantially as an entirety (the “Surviving Entity”) (a)
shall be a corporation organized and validly existing under the laws of the
United States or any State thereof or the District of Columbia and (b) shall
expressly assume, by supplemental indenture (in form and substance satisfactory
to the Trustee), executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on all of the
Notes and the performance of every covenant of the Notes, this Indenture and
the Registration Rights Agreement on the part of the Company to be performed or
observed; (B) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(A)(ii)(b) of this Section 5.01
(including giving effect to any Indebtedness and Acquired Indebtedness incurred
or anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be, shall
be able to incur at least $1.00 of additional Indebtedness pursuant to the
first paragraph of clause (1) Section 4.12; (C) immediately
after giving effect to such transaction and the assumption contemplated by
clause (1)(A)(ii)(b) of this Section 5.01 (including, without
limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred
or anticipated to be incurred and any Lien granted in connection with or in
respect of the transaction), no Default or Event of Default shall have occurred
or be continuing; and (D) the Company or the Surviving Entity, as the case
may be, shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such
transaction have been satisfied.

 

(2) 
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.

 

(3) 
Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any

 

63

 

transaction complying
with the provisions of Section 4.16) will not, and the Company will
not cause or permit any Guarantor to, consolidate with or merge with or into
any Person other than the Company or any other Guarantor unless:  (A) the entity formed by or surviving
any such consolidation or merger (if other than the Guarantor) or to which such
sale, lease, conveyance or other disposition shall have been made is a Person
organized and existing under the laws of the United States or any State thereof
or the District of Columbia; (B) such entity assumes by supplemental
indenture all of the obligations of the Guarantor on the Guarantee; and
(C) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing.  Any merger or consolidation of a Guarantor
with and into the Company (with the Company being the surviving entity) or another
Guarantor that is a Wholly Owned Restricted Subsidiary of the Company need only
comply with clause (D) of the first paragraph of this Section 5.01.

 

The foregoing restrictions shall not apply to any
transaction involving (A) a merger of the Company and one of its Subsidiaries
for the purposes of establishing a holding company structure (the “Holding
Company Merger”) or (B) the merger of the Company and one of its
Subsidiaries for the purpose of reincorporating into another jurisdiction.  Either of the transactions described in
clause (A) or clause (B) of this paragraph may be effected individually or in
connection with one or more related transactions; provided that (i) such transaction or transactions
(individually or taken as a whole) is not for the purposes of evading the
provisions set forth in this Section 5.01 and (ii) clause (1) of
the first paragraph of this Section 5.01 applies to such
transaction or transactions.

 

SECTION 5.02.  Successor Corporation Substituted.  Upon any consolidation, combination or
merger or any transfer of all or substantially all of the assets of the Company
in accordance with Section 5.01, in which the Company is not the
continuing corporation, the successor Person formed by such consolidation or
into which the Company is merged or to which such conveyance, lease or transfer
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture and the Notes with the same
effect as if such successor had been named as the Company herein and thereafter
(except in the case of a sale, assignment, transfer, lease, conveyance or other
disposition) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture and the Notes; provided that solely for purposes of computing the amounts described in
subclauses (4)(C)(i), (4)(C)(ii) and (4)(C)(iii) of Section 4.10,
any successor Person shall only be deemed to have succeeded to and be
substituted for the Company with respect to periods subsequent to the effective
time of such merger, consolidation or transfer of assets.

 

ARTICLE SIX

REMEDIES

 

SECTION 6.01.  Events of Default.  An “Event of Default” means any of
the following events:

 

(1) 
the failure to pay interest on any Notes when the same becomes due and
payable and the default continues for a period of 30 days (whether or not such
payment shall be prohibited by Article Ten of this Indenture);

 

64

 

(2) 
the failure to pay the principal on any Notes, when such principal
becomes due and payable, at maturity, upon redemption or otherwise (including
the failure to make a payment to purchase Notes tendered pursuant to a Change
of Control Offer or a Net Proceeds Offer) (whether or not such payment shall be
prohibited by Article Ten of this Indenture);

 

(3)  a
default in the observance or performance of any other covenant or agreement
contained in this Indenture which default continues for a period of 30 days
after the Company receives written notice specifying the default (and demanding
that such default be remedied) from the Trustee or the Holders of at least 25%
of the outstanding principal amount of the Notes (except in the case of a
default with respect to Section 5.01, which will constitute an
Event of Default with such notice requirement but without such passage of time
requirement);

 

(4) 
the failure to pay at final maturity (giving effect to any applicable
grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or any Restricted Subsidiary of the Company (other
than a Securitization Entity) and such failure continues for a period of 30
days or more, or the acceleration of the final stated maturity of any such
Indebtedness (which acceleration is not rescinded, annulled or otherwise cured
within 30 days of receipt by the Company or such Restricted Subsidiary of
notice of any such acceleration) if the aggregate principal amount of such
Indebtedness, together with the principal amount of any other such Indebtedness
in default for failure to pay principal at final maturity or which has been
accelerated, in each case with respect to which the 30-day period described in
this Section 6.01 has passed, aggregates $25.0 million or more at
any time;

 

(5) 
one or more judgments which exceeds in the aggregate $25.0 million
(excluding judgments to the extent covered by insurance by a reputable insurer
as to which the insurer has acknowledged coverage) shall have been rendered
against the Company or any of its Significant Subsidiaries that is a Restricted
Subsidiary of the Company and such judgments remain undischarged, unvacated,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable;

 

(6) 
the Company or any of its Significant Subsidiaries (A) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to itself,
(B) consents to the entry of a judgment, decree or order for relief against it
in an involuntary case or proceeding under any Bankruptcy Law,
(C) consents to the appointment of a Custodian of it or for substantially
all of its property, (D) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, (E) makes a general
assignment for the benefit of its creditors, or (F) takes any corporate action
to authorize or effect any of the foregoing;

 

(7)  a
court of competent jurisdiction enters a judgment, decree or order for relief
in respect of the Company or any of its Significant Subsidiaries in an involuntary
case or proceeding under any Bankruptcy Law, which shall (A) approve as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition in respect of the Company or any of its Significant Subsidiaries,
(B) appoint a Custodian of the Company or any of its Significant Subsidiaries
or for substantially all of its property or (C) order the winding-up or
liquidation of its affairs; and such judgment, decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;

 

65

 

(8)           any
of the Guarantees ceases to be in full force and effect or any of the
Guarantees is declared to be null and void and unenforceable or any of the
Guarantees is found to be invalid or any of the Guarantors denies its liability
under its Guarantee (other than (A) by reason of release of a Guarantor in
accordance with the terms of this Indenture or (B) in connection with the
bankruptcy of a Guarantor, so long as the aggregate assets of such Guarantor
and any other Guarantor whose Guarantee ceased or ceases to be in full force as
a results of a bankruptcy are less than $25.0 million); or

 

(9)           the
failure by the Company to deposit funds, as required in order to secure the
redemption of the Notes upon an Event of Failure, pursuant to Section 4.23
or the Security Agreement shall cease to be in full force and effect or
enforceable in accordance with its terms, other than in accordance with its
terms.

 

SECTION 6.02.  Acceleration.

 

If an Event of Default (other than an Event of Default
specified in clause (6) or (7) of Section 6.01 with
respect to the Company) shall occur and be continuing, the Trustee or the
Holders of at least 25% in principal amount of outstanding Notes may declare
the principal of and accrued interest on all the Notes to be due and payable by
notice in writing to the Company and the Trustee specifying the respective
Event of Default and that it is a “notice of acceleration” (the “Acceleration
Notice”), and the same (1) shall become immediately due and payable,
or (2) if there are any amounts outstanding under the Credit Agreement,
shall become immediately due and payable upon the first to occur of an
acceleration under the Credit Agreement or 5 Business Days after receipt by the
Company and the representative under the Credit Agreement of such Acceleration
Notice.  If an Event of Default
specified in clause (6) or (7) of Section 6.01 with
respect to the Company occurs and is continuing, then all unpaid principal of,
and premium, if any, and accrued and unpaid interest on all of the outstanding
Notes shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder.

 

At any time after a declaration of acceleration with
respect to the Notes as described in the preceding paragraph, the Holders of a
majority in principal amount of the Notes may rescind and cancel such
declaration and its consequences: (1) if the rescission would not conflict
with any judgment or decree, (2) if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of the acceleration, (3) to the extent the payment of
such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (4) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances, and (5) in the event of the cure or waiver of
an Event of Default of the type described in clause (6) or (7) of Section 6.01,
the Trustee shall have received an Officers’ Certificate and an Opinion of
Counsel that such Event of Default has been cured or waived.  No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

 

SECTION 6.03.  Other Remedies.  If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to

 

66

 

collect the payment of
the principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

 

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

 

SECTION 6.04.  Waiver of Past Defaults.  Prior to the declaration of acceleration of
the Notes, the Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may, on behalf of
the Holders of all the Notes, waive any existing Default or Event of Default
and its consequences under this Indenture, except a Default or Event of Default
specified in Section 6.01(1) or (2) or in respect of any
provision hereof which cannot be modified or amended without the consent of the
Holder so affected pursuant to Section 9.01.  When a Default or Event of Default is so
waived, it shall be deemed cured and shall cease to exist.  This Section 6.04 shall be in
lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B)
of the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.

 

SECTION 6.05.  Control by Majority.  Subject to Section 2.09, the
Holders of the Notes may not enforce this Indenture or the Notes except as
provided in this Article Six and under the TIA.  The Holders of not less than a majority in aggregate principal
amount of the outstanding Notes shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, provided, however, that the Trustee may
refuse to follow any direction (1) that conflicts with any rule of law or this
Indenture, (2) that the Trustee determines may be unduly prejudicial to the
rights of another Holder, or (3) that may expose the Trustee to personal
liability for which reasonable indemnity provided to the Trustee against such
liability shall be inadequate; provided, further, however, that the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent
with such direction or this Indenture. 
This Section 6.05 shall be in lieu of Section 316(a)(1)(A)
of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.

 

SECTION 6.06.  Limitation
on Suits.  No Holder of any
Notes shall have any right to institute any proceeding with respect to this
Indenture or the Notes or any remedy hereunder, unless the Holders of at least
25% in aggregate principal amount of the outstanding Notes have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as Trustee under the Notes and this Indenture, the Trustee has
failed to institute such proceeding within 45 days after receipt of such
notice, request and offer of indemnity and the Trustee, within such 45-day
period, has not received directions inconsistent with such written request by
Holders of not less than a majority in aggregate principal amount of the
outstanding Notes.

 

67

 

The foregoing limitations shall not apply to a suit
instituted by a Holder of a Note for the enforcement of the payment of the
principal of, premium, if any, or interest on, such Note on or after the
respective due dates expressed or provided for in such Note.

 

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

 

SECTION 6.07.  Right of Holders To Receive Payment.  Notwithstanding any other provision in this
Indenture, the right of any Holder of a Note to receive payment of the
principal of, premium, if any, and interest on such Note, on or after the
respective due dates expressed or provided for in such Note, or to bring suit
for the enforcement of any such payment on or after the respective due dates,
is absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.

 

SECTION 6.08.  Collection Suit by Trustee.  If an Event of Default specified in clause
(1) or (2) of Section 6.01 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company, or any other obligor on the Notes for the whole amount of
the principal of, premium, if any, and accrued interest remaining unpaid,
together with interest on overdue principal and, to the extent that payment of
such interest is lawful, interest on overdue installments of interest, in each
case at the rate per annum provided for by the Notes and such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.

 

SECTION 6.09.  Trustee May File Proofs of Claim.  The Trustee may file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents, counsel,
accountants and experts) and the Holders allowed in any judicial proceedings
relative to the Company or Restricted Subsidiaries (or any other obligor upon
the Notes), their creditors or their property and shall be entitled and
empowered to participate as a member, voting or otherwise, of any official
committee of creditors appointed in such matter and to collect and receive any
monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agent and counsel, and any other amounts due the Trustee under Section 7.07.  The Company’s payment obligations under this
Section 6.09 shall be secured in accordance with the provisions of Section 7.07.  Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

 

SECTION 6.10.  Priorities.  If the Trustee collects any money pursuant to this
Article Six it shall pay out such money in the following order:

 

68

 

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

 

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

 

Third:  to
Holders for the principal amounts (including any premium) owing under the
Notes, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for the principal (including any premium);
and

 

Fourth:  the
balance, if any, to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.

 

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

 

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

 

SECTION 6.12.  Restoration of Rights and Remedies.  If the Trustee or any Holder has instituted
any proceeding to enforce any right or remedy under this Indenture or any Note
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every
such case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.

 

ARTICLE SEVEN

TRUSTEE

 

SECTION 7.01.  Duties of Trustee.

 

(1) 
If an Event of Default has occurred and is continuing, the Trustee may
exercise such of the rights and powers vested in it by this Indenture and shall
use the same degree of care and skill in its exercise thereof as a prudent
person would exercise or use under the circumstances in the conduct of such
person’s own affairs.

 

(2) 
Except during the continuance of an Event of Default:

 

69

 

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

 

(B)           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 any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture (but need not conform or
investigate the accuracy or mathematical calculations or other facts stated
therein or otherwise verify the contents thereof).

 

(3) 
Notwithstanding anything to the contrary herein contained, the Trustee
may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

 

(A)          This
paragraph does not limit the effect of paragraph (2) of this Section 7.01.

 

(B)           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.

 

(C)           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 6.02,
6.04 or 6.05.

 

(4) 
No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.

 

(5) 
Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (1), (2), (3) and (4) of this Section 7.01
and Section 7.02.

 

(6) 
The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the
Company.  Assets held in trust by the
Trustee need not be segregated from other assets except to the extent required
by law.

 

(7) 
The Trustee may refuse to perform any duty or exercise any right or
power hereunder unless (A) it is provided adequate funds to enable it to
do so and (B) it receives indemnity reasonably satisfactory to it against
any loss, liability, fee or expense.

 

SECTION 7.02.  Rights of Trustee.  Subject to Section 7.01:

 

70

 

(1) 
The Trustee may conclusively rely and shall be fully protected in acting
or refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper Person.  The Trustee need not and shall not be required to investigate any
fact or matter stated in the document.

 

(2) 
Before the Trustee acts or refrains from acting, it may consult with
counsel of its selection and may require an Officers’ Certificate or an Opinion
of Counsel, or both, which shall conform to Sections 13.04 and 13.05.  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel.

 

(3) 
The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.

 

(4) 
The Trustee shall not be liable for any action that it takes or omits to
take in good faith which it reasonably believes to be authorized or within its
rights or powers.

 

(5) 
The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled, upon reasonable notice to the Company, to examine the books,
records, and premises of the Company, personally or by agent or attorney and to
consult with the officers and representatives of the Company, including the
Company’s accountants and attorneys.

 

(6) 
The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities which
may be incurred by it in compliance with such request, order or direction.

 

(7) 
The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.

 

(8) 
Delivery of reports, information and documents to the Trustee under Section 4.08
is for informational purposes only and the Trustee’s receipt of the foregoing
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company’s
compliance with any of their covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates).  The Trustee shall not be deemed to have
knowledge of any defaults until such time as the Trustee receives written
knowledge or has actual knowledge of the default.

 

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

 

71

 

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

 

SECTION 7.05.  Notice of Default.  If a Default or an Event of Default occurs
and is continuing and if it is known to a Trust Officer, the Trustee shall mail
to each Holder notice of the uncured Default or Event of Default within 90 days
after obtaining knowledge thereof. 
Except in the case of a Default or an Event of Default in payment of
principal of, or interest on, any Note, including an accelerated payment, a
Default in payment on the Change of Control Payment Date pursuant to a Change
of Control Offer or on the Net Proceeds Offer Payment Date pursuant to a Net
Proceeds Offer and a Default in compliance with Article Five hereof, the
Trustee may withhold the notice if and so long as its Board of Directors, the
executive committee of its Board of Directors or a committee of its directors
and/or Trust Officers in good faith determines that withholding the notice is
in the interest of the Holders.  The
foregoing sentence of this Section 7.05 shall be in lieu of the
proviso to Section 315(b) of the TIA and such proviso to
Section 315(b) of the TIA is hereby expressly excluded from this Indenture
and the Notes, as permitted by the TIA.

 

SECTION 7.06.  Reports by Trustee to Holders.  Within 60 days after May 15 of each
year beginning with 2004, the Trustee shall, to the extent that any of the
events described in TIA Section 313(a) occurred within the previous twelve
months, but not otherwise, mail to each Holder a brief report dated as of such
date that complies with TIA Section 313(a).  The Trustee also shall comply with TIA Sections 313(b), (c) and
(d).

 

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

 

The Company shall promptly notify the Trustee if the
Notes become listed on any stock exchange and the Trustee shall comply with TIA
Section 313(d).

 

SECTION 7.07.  Compensation and Indemnity.  The Company and the Guarantors, jointly,
shall pay to the Trustee from time to time such compensation for its services
as has been agreed to in writing signed by the Company and the Trustee.  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,
shall reimburse the Trustee upon request for all reasonable out-of-pocket
disbursements, advances or expenses incurred or made by it in connection with
the performance of its duties under this Indenture.  Such expenses shall include the reasonable fees and expenses of
the Trustee’s agents, counsel, accountants and experts.

 

The Company and the Guarantors, jointly, shall
indemnify each of the Trustee (or any predecessor Trustee) and its agents,
employees, stockholders, Affiliates and directors and officers for, and hold
them each harmless against, any and all loss, liability, damage, claim or
expense (including reasonable fees and expenses of counsel), including taxes
(other than taxes

 

72

 

based on the income of
the Trustee) incurred by any of them except for such actions to the extent
caused by any negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the acceptance or administration of this
trust including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or performance
of any of their rights, powers or duties hereunder.  The Trustee shall notify the Company and the Guarantors promptly
of any claim asserted against the Trustee for which it may seek indemnity, provided, however, that failure to so
notify the Company and the Guarantors shall not release the Company and the
Guarantors of its obligations hereunder unless and to the extent such failure
results in the forfeiture by the Company and the Guarantors of substantial
rights and defenses.  At the Trustee’s
sole discretion, the Company and the Guarantors shall defend the claim and the
Trustee shall cooperate and may participate in the defense; provided, however, that any settlement of
a claim shall be approved in writing by the Trustee if such settlement would
result in an admission of liability by the Trustee or if such settlement would
not be accompanied by a full release of the Trustee for all liability arising
out of the events giving rise to such claim. 
Alternatively, the Trustee may at its option have separate counsel of
its own choosing and the Company shall pay the reasonable fees and expenses of
such counsel; provided that the
Company will not be required to pay such fees and expenses if it assumes the
Trustee’s defense and there is no conflict of interest between the Company and
the Trustee in connection with such defense as reasonably determined by the
Trustee.  The Company need not pay for
any settlement made without its written consent, which consent will not be
unreasonably withheld.  The Company need
not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith or willful
misconduct.

 

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

 

When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(6) or (7) occurs,
such expenses and the compensation for such services are intended to constitute
expenses of administration under any Bankruptcy Law.

 

The provisions of this Section 7.07 shall
survive the termination of this Indenture.

 

SECTION 7.08.  Replacement of Trustee.  The Trustee may resign at any time by so
notifying the Company in writing at least 30 days in advance of such
resignation; provided, however,
that no such resignation shall be effective until a successor Trustee has
accepted its appointment pursuant to this Section 7.08.  The Holders of a majority in principal
amount of the outstanding Notes may remove the Trustee and appoint a successor
Trustee with the Company’s consent, by so notifying the Company and the
Trustee.  The Company may remove the
Trustee if:

 

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

 

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

 

73

 

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

 

(4)           the
Trustee becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall notify each
Holder of such event and shall promptly appoint a successor Trustee.  Within one year after the successor Trustee
takes office, the Holders of a majority in aggregate principal amount of the
outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.

 

A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.  Immediately after that, the retiring Trustee
shall transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided in Section 7.07, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture.  The successor Trustee shall
mail notice of such successor Trustee’s appointment to each Holder.

 

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

 

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

 

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

 

SECTION 7.10.  Eligibility; Disqualification.  This Indenture shall always have a Trustee
who satisfies the requirement of TIA Sections 310(a)(1), (2) and (5).  The Trustee (or, in the case of a Trustee
that is a corporation included in a bank holding company system, the related
bank holding company) shall have a combined capital and surplus of at least
$100 million as set forth in its most recent published annual report of
condition, and have a Corporate Trust Office in the City of New York.  In addition, if the Trustee is a corporation
included in a bank holding company system, the Trustee, independently of such
bank holding company, shall meet the capital requirements of TIA
Section 310(a)(2).  The Trustee
shall comply with TIA Section 310(b); provided,
however, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or

 

74

 

participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.

 

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

 

ARTICLE EIGHT

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.01.  Termination of Company’s Obligations.  This Indenture will be discharged and will
cease to be of further effect (except as to surviving rights of registration of
transfer or exchange of the Notes, as expressly provided for in this Indenture)
as to all outstanding Notes when: (1) either (A) all Notes theretofore
authenticated and delivered (except lost, stolen or destroyed Notes which have
been replaced or paid and Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or (B) all Notes not theretofore
delivered to the Trustee for cancellation have become due and payable or have
been called for redemption in accordance with this Indenture and the Company
has irrevocably deposited or caused to be deposited with the Trustee funds in
an amount sufficient to pay and discharge the entire Indebtedness on the Notes
not theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit (or to the date
of redemption in the case of the Notes being called for redemption) together
with irrevocable instructions from the Company directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case may
be; (2) the Company has paid all other sums payable under this Indenture
by the Company; and (3) the Company has delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel stating that all conditions
precedent under this Indenture relating to the satisfaction and discharge of
this Indenture have been complied with; provided,
however, that such counsel may rely, as to matters of fact, on a
certificate or certificates of officers of the Company.

 

The Company may, at its option and at any time, elect
to have its obligations and the obligations of the Guarantors discharged with
respect to the outstanding Notes (“Legal Defeasance”).  Such Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Debt represented by the
outstanding Notes, and satisfied all of their obligations with respect to the
Notes, except for (1) the rights of Holders to receive payments from a
trust established by the Company in respect of the principal of, premium, if
any, and interest on the Notes when such payments are due, (2) the
Company’s obligations with respect to the Notes concerning issuing temporary
Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and
the maintenance of an office or agency for payments, (3) the rights,
powers, trust, duties and immunities of the Trustee and the Company’s
obligations in connection therewith, and (4) the Legal Defeasance
provisions of this Article Eight. 
In addition, the Company may, at its option and at any time, elect to
have the obligations of the Company released with respect to covenants
contained in Sections 4.04, 4.05, 4.06, 4.07, 4.08,
4.10 through 4.20 and Article Five (“Covenant Defeasance”)
and thereafter any omission to comply with such obligations shall not
constitute a Default or Event of Default with respect to the Notes.

 

75

 

In the event of Covenant
Defeasance, those events described under Section 6.01 (except those
events described in Section 6.01(1), (2), (6) and (7)) will no
longer constitute an Event of Default with respect to the Notes.

 

In order to exercise either Legal Defeasance or
Covenant Defeasance:

 

(1)           the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders cash in U.S. dollars, non-callable U.S. government obligations, or
a combination thereof, in such amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on the Notes on the stated date for
payment thereof or on the applicable Redemption Date, as the case may be;

 

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

 

(3)           in
the case of Covenant Defeasance, the Company shall have delivered to the
Trustee an Opinion of Counsel in the United States reasonably acceptable to the
Trustee confirming that the Holders will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such Covenant Defeasance and
will be subject to U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;

 

(4)           (A)
no Default or Event of Default shall have occurred and be continuing on the
date of such deposit or (B) in the case of Legal Defeasance, no Defaults or
Events of Default under Section 6.01(6) or (7) shall have
occurred, at any time in the period ending on the 123rd day after the date of
deposit;

 

(5)           the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that such Legal Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under this Indenture or any other
material agreement or instrument to which the Company or any of its Restricted
Subsidiaries is a party or by which the Company or any of its Restricted
Subsidiaries is bound;

 

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

 

(7)           the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for or
relating to

 

76

 

the Legal Defeasance or
the Covenant Defeasance, as the case may be, have been complied with; and

 

(8)           the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that creation of the defeasance trust does not violate the Investment Company
Act of 1940, as amended, and, assuming that no Holder is an “insider” as that
term is defined in the United States Bankruptcy Code, after the passage of 123
days following the deposit, the trust fund will not be subject to the effect of
Section 547 of the United States Bankruptcy Code or Section 15
of the New York Debtor and Creditor Law.

 

SECTION 8.02.  Application of Trust Money.  The Trustee or Paying Agent shall hold in
trust U.S. Legal Tender or U.S. Government Obligations deposited with it
pursuant to Section 8.01, and shall apply the deposited U.S. Legal
Tender and the money from U.S. Government Obligations in accordance with this
Indenture to the payment of the principal of and interest on the Notes.  The Trustee shall be under no obligation to
invest said U.S. Legal Tender or U.S. Government Obligations except as it may
agree in writing with the Company.

 

The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Legal Tender or U.S. Government Obligations deposited pursuant to Section 8.01
or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of
outstanding Notes.

 

SECTION 8.03.  Repayment to the Company.  Subject to Section 8.01, the
Trustee and the Paying Agent shall promptly pay to the Company upon request any
excess U.S. Legal Tender or U.S. Government Obligations held by them at any
time and thereupon shall be relieved from all liability with respect to such
money.  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 one year; provided, however, that the Trustee or
such Paying Agent, before being required to make any payment, may at the
expense of the Company cause to be published once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein which shall be no more than 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to the Company.  After payment
to the Company, Holders entitled to such money must look to the Company for
payment as general creditors unless an applicable law designates another
Person.

 

SECTION 8.04.  Reinstatement.  If the Trustee or Paying Agent is unable to
apply any U.S. Legal Tender or U.S. Government Obligations in accordance with Section 8.01
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 Notes
shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01
until such time as the Trustee or Paying Agent is permitted to apply all such
U.S. Legal Tender or U.S. Government Obligations in accordance with Section 8.01;
provided, however, that if the Company
has made any payment of interest on or principal of any Notes because of the
reinstatement of their obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment 

 

77

 

from the U.S. Legal
Tender or U.S. Government Obligations held by the Trustee or Paying Agent.

 

SECTION 8.05.  Acknowledgment of Discharge by Trustee.  After the conditions of Section 8.01
have been satisfied, the Trustee upon request shall acknowledge in writing the
discharge of the Company’s obligations under this Indenture except for those
surviving obligations specified in Section 8.01; provided the legal
counsel delivering such Opinion of Counsel may rely as to matters of fact on
one or more Officers’ Certificates of the Company.

 

ARTICLE NINE

MODIFICATION OF THIS INDENTURE

 

SECTION 9.01.  Without Consent of Holders.  Notwithstanding Section 9.02,
the Company, the Guarantors and the Trustee may amend, waive or supplement this
Indenture without notice to or consent of any Holder:  (1) to cure any ambiguity, defect or inconsistency; (2) to
comply with Article Five of this Indenture; (3) to provide for
uncertificated Notes in addition to certificated Notes; (4) to comply with any
requirements of the Commission in order to effect or maintain the qualification
of this Indenture under the TIA; (5) to make any change that would provide any
additional benefit or rights to the Holders; (6) to make any other change that
does not adversely affect in any material respect the rights of any Holder
hereunder; or (7) in connection with the issuance of any Additional Notes, so
long as in each case, such change does not, in the opinion of the Trustee,
adversely affect the rights of any of the Holders in any material respect under
this Indenture.  In formulating its
opinion on such matters, the Trustee will be entitled to rely on such evidence
as it deems appropriate, including, without limitation, solely on an Opinion of
Counsel; provided, however, that in delivering
such Opinion of Counsel, such counsel may rely as to matters of fact, on a
certificate or certificates of officers of the Company.

 

SECTION 9.02.  With Consent of Holders.  All other modifications, waivers and
amendments of this Indenture may be made with the consent of the Holders of a
majority in principal amount of the then outstanding Notes, except that,
without the consent of each Holder of the Notes affected thereby, no amendment
or waiver may:  (1) reduce the
amount of Notes whose Holders must consent to an amendment; (2) reduce the
rate of or change or have the effect of changing the time for payment of
interest, including defaulted interest, on any Notes; (3) reduce the
principal of or change or have the effect of changing the fixed maturity of any
Notes, or change the date on which any Notes may be subject to redemption or
repurchase, or reduce the redemption or repurchase price therefor;
(4) make any Notes payable in money other than that stated in the Notes;
(5) make any change in provisions of this Indenture protecting the right
of each Holder to receive payment of principal of and interest on such Note on
or after the due date thereof or to bring suit to enforce such payment, or
permitting Holders of a majority in principal amount of Notes to waive Defaults
or Events of Default; (6) amend, change or modify in any material respect
the obligation of the Company to make and consummate a Change of Control Offer
in the event a Change of Control has occurred or make and consummate a Net
Proceeds Offer with respect to any Asset Sale that has been consummated, or,
following the occurrence or consummation of a Change of Control or Asset Sale,
modify any of the provisions or definitions with respect thereto;
(7) modify or change any provision of this Indenture or the related
definitions affecting the subordination or ranking of the Notes or any
Guarantee in a manner which adversely affects the Holders; (8) release any
Guarantor from any of its

 

78

 

obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms of this
Indenture; or (9) amend, change or modify in any material respect any provision
of this Indenture relating to an offer to redeem upon an Event of Failure.

 

After an amendment, supplement or waiver under this Section 9.02
becomes effective (as provided in Section 9.04), the Company shall
mail to the Holders affected thereby a notice briefly describing the amendment,
supplement or waiver.  Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.

 

SECTION 9.03.  Compliance with TIA.  Every amendment, waiver or supplement of
this Indenture or the Notes shall comply with the TIA as then in effect; provided, however, that this Section 9.03
shall not of itself require that this Indenture or the Trustee be qualified
under the TIA or constitute any admission or acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and
the Trustee are required by the TIA to be so qualified.

 

SECTION 9.04.  Revocation and Effect of Consents.  Until an amendment, waiver or supplement
becomes effective, a consent to it by a Holder is a continuing consent by the
Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder’s Note, even if notation of
the consent is not made on any Note. 
Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder’s Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers’ Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.  An amendment, supplement or waiver becomes effective upon receipt
by the Trustee of such Officers’ Certificate and evidence of consent by the
Holders of the requisite percentage in principal amount of outstanding Notes.

 

The Company may, but shall not be obligated to, fix a
Record Date for the purpose of determining the Holders entitled to consent to
any amendment, supplement or waiver, which Record Date shall be at least 30
days prior to the first solicitation of such consent.  If a Record Date is fixed, then notwithstanding the second
sentence of the immediately preceding paragraph, those Persons who were Holders
at such Record Date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such Record Date.  No such consent shall be valid or effective
for more than 90 days after such Record Date unless consents from Holders of
the requisite percentage in principal amount of outstanding Notes required
hereunder for the effectiveness of such consents shall have also been given and
not revoked within such 90 day period.

 

SECTION 9.05.  Notation on or Exchange of Notes.  If an amendment, supplement or waiver
changes the terms of a Note, the Trustee may require the Holder of such Note to
deliver it to the Trustee.  The Trustee
may place an appropriate notation on the Note about the changed terms and return
it to the Holder.  Alternatively, if the
Company or the Trustee

 

79

 

so determine, the Company
in exchange for the Note shall issue and the Trustee shall authenticate a new
Note that reflects the changed terms.

 

SECTION 9.06.  Trustee To Sign Amendments, Etc.  The Trustee shall execute any amendment,
supplement or waiver authorized pursuant to this Article Nine; provided, however, that the Trustee may,
but shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee’s own rights, duties or immunities under this
Indenture.  In executing such supplement
or waiver the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it, and shall be fully protected in relying upon an Opinion of
Counsel and an Officers’ Certificate of the Company, stating that no event of
default shall occur as a result of such amendment, supplement or waiver and
that the execution of any amendment, supplement or waiver authorized pursuant
to this Article Nine is authorized or permitted by this Indenture;
provided the legal counsel delivering such Opinion of Counsel may rely as to
matters of fact on one or more Officers’ Certificates of the Company.  Such Opinion of Counsel shall not be an
expense of the Trustee.

 

ARTICLE TEN

SUBORDINATION

 

SECTION 10.01.  Notes Subordinated to Senior Debt.  The Company covenants and agrees, and each
Holder of the Notes, by its acceptance thereof, likewise covenants and agrees,
that all Notes shall be issued subject to the provisions of this
Article Ten; and each Person holding any Note, whether upon original issue
or upon transfer, assignment or exchange thereof, accepts and agrees that the
payment of all Obligations on the Notes by the Company shall, to the extent and
in the manner herein set forth, be subordinated and junior in right of payment
to the prior payment in full in cash or in Cash Equivalents (other than clause
(7) in the definition of “Cash Equivalents” in Section 1.01)
of all Obligations on Senior Debt, including, without limitation, the Company’s
obligations under the Credit Agreement; provided that
the subordination is for the benefit of, and shall be enforceable directly by,
the holders of Senior Debt, and that each holder of Senior Debt whether now
outstanding or hereafter created, incurred, assumed or guaranteed shall be
deemed to have acquired Senior Debt in reliance upon the covenants and
provisions contained in this Indenture and the Notes; provided,
further that the Company’s obligations under the Notes shall not be
subordinated to, and shall rank pari passu
with, the Company’s obligations under the Existing Notes.

 

SECTION 10.02.  Suspension of Payment When Senior Debt Is
in Default.

 

(1) 
If any default occurs and is continuing in the payment when due, whether
at maturity, upon any redemption, by declaration or otherwise, of any principal
of, interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees or commissions with respect to, any Senior Debt, no
payment or distribution of any kind or character shall be made by or on behalf
of the Company or any other Person on its or their behalf with respect to any
Obligations on the Notes or to acquire any of the Notes for cash or property or
otherwise.  In addition, if any other
event of default occurs and is continuing with respect to any Designated Senior
Debt, as such event of default is defined in the instrument creating or
evidencing such Designated Senior Debt, permitting the holders of such
Designated Senior Debt then outstanding to accelerate the maturity thereof and
if the Representative for the respective

 

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issue of Designated
Senior Debt gives written notice of the event of default to the Trustee (a “Default
Notice”), then, unless and until all events of default have been cured or
waived or have ceased to exist or the Trustee receives notice thereof from the
Representative for the respective issue of Designated Senior Debt terminating
the Blockage Period (as defined in this Section 10.02), during the
180 days after the delivery of such Default Notice (the “Blockage Period”),
neither the Company nor any other Person on its behalf shall: (A) make any
payment or distribution of any kind or character with respect to any Obligations
on the Notes, or (B) acquire any of the Notes for cash or property or
otherwise.  Notwithstanding anything
herein to the contrary, in no event will a Blockage Period extend beyond 180
days from the date the payment on the Notes was due and only one such Blockage
Period may be commenced within any 360 consecutive days.  No event of default which existed or was
continuing on the date of the commencement of any Blockage Period with respect
to the Designated Senior Debt shall be, or be made, the basis for commencement
of a second Blockage Period by the Representative of such Designated Senior
Debt whether or not within a period of 360 consecutive days, unless such event
of default shall have been cured or waived for a period of not less than 90
consecutive days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after the date of
commencement of such Blockage Period that, in either case, would give rise to
an event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default
for this purpose).  Notwithstanding any
of the provisions of this Article 10, the Company shall be allowed to
make, and make payments related to, the Special Redemption Offer pursuant to Section 4.23.

 

(2) 
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by Section 10.02(1),
such payment shall be held for the benefit of, and shall be paid over or
delivered to, the holders of Senior Debt (pro
rata to such holders on the basis of the respective amount of Senior
Debt held by such holders) or their respective Representatives, as their
respective interests may appear.  The
Trustee shall be entitled to rely on information regarding amounts then due and
owing on the Senior Debt, if any, received from the holders of such Senior Debt
(or their Representatives) or, if such information is not received from such
holders or their Representatives after written request therefor, from the
Company and only amounts included in the information provided to the Trustee
shall be paid to the holders of Senior Debt.

 

Nothing contained in this Article Ten shall limit
the right of the Trustee or the Holders of Notes to take any action to
accelerate the maturity of the Notes pursuant to Section 6.02 or to
pursue any rights or remedies hereunder; provided
that all Senior Debt thereafter due or declared to be due shall
first be paid in full in cash or in Cash Equivalents (other than clause
(7) in the definition of “Cash Equivalents” in Section 1.01)
before the Holders are entitled to receive any payment of any kind or character
with respect to Obligations on the Notes.

 

SECTION 10.03.  Notes Subordinated to Prior Payment of
All Senior Debt on Dissolution, Liquidation or Reorganization of Company.

 

(1) 
Upon any direct or indirect payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any

 

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liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors or
marshaling of assets of the Company or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to the Company or its
property, whether voluntary or involuntary, all Obligations due or to become
due upon all Senior Debt shall first be paid in full in cash or in Cash
Equivalents (other than clause (7) in the definition of “Cash Equivalents”
in Section 1.01), or such payment duly provided for to the
satisfaction of the holders of Senior Debt, before any payment or distribution
of any kind or character is made on account of any Obligations on the Notes, or
for the acquisition, repurchase, redemption or defeasance of any of the Notes
for cash or property or otherwise.  Upon
any such dissolution, winding-up, liquidation, reorganization, receivership or
similar proceeding, any direct or indirect payment or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to which the Holders of the Notes or the Trustee under this Indenture would be
entitled, except for the provisions hereof, shall be paid by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them, directly to the holders of Senior Debt (pro
rata to such holders on the basis of the respective amounts of Senior Debt held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of Senior Debt remaining unpaid until all such Senior Debt has been
paid in full in cash or in Cash Equivalents (other than clause (7) in the
definition of “Cash Equivalents” in Section 1.01), after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of Senior Debt.

 

(2) 
To the extent any payment of Senior Debt (whether by or on behalf of the
Company, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Debt or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such
payment has not occurred.

 

(3) 
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, shall be received by any Holder when such payment
or distribution is prohibited by this Section 10.03(3), such
payment or distribution shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of Senior Debt (pro rata to such holders on the basis of
the respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective interests
may appear, for application to the payment of Senior Debt remaining unpaid
until all such Senior Debt has been paid in full in cash or in Cash Equivalents
(other than clause (7) in the definition of “Cash Equivalents” in Section 1.01),
after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of such Senior Debt.

 

(4) 
The consolidation of the Company with, or the merger of the Company with
or into, another corporation or the liquidation or dissolution of the Company
following the

 

82

 

conveyance or transfer of
all or substantially all of its assets, to another corporation upon the terms
and conditions provided in Article Five hereof and as long as permitted under
the terms of the Senior Debt shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 10.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, assume the Company’s obligations hereunder in
accordance with Article Five hereof.

 

SECTION 10.04.  Holders To Be Subrogated to Rights of
Holders of Senior Debt.  Subject to
the payment in full in cash or in Cash Equivalents (other than clause
(7) in the definition of “Cash Equivalents” in Section 1.01)
of all Senior Debt, the Holders of the Notes shall be subrogated to the rights
of the holders of Senior Debt to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Debt until the
Notes shall be paid in full; and, for the purposes of such subrogation, no such
payments or distributions to the holders of the Senior Debt by or on behalf of
the Company or by or on behalf of the Holders by virtue of this Article Ten
which otherwise would have been made to the Holders shall, as between the
Company and the Holders of the Notes, be deemed to be a payment by the Company
to or on account of the Senior Debt, it being understood that the provisions of
this Article Ten are and are intended solely for the purpose of defining
the relative rights of the Holders of the Notes, on the one hand, and the
holders of the Senior Debt, on the other hand.

 

Each Holder by purchasing or accepting a Note waives
any and all notice of the creation, modification, renewal, extension or accrual
of any Senior Debt of the Company and notice of or proof of reliance by any
holder or owner of Senior Debt of the Company upon this Article Ten and
the Senior Debt of the Company shall conclusively be deemed to have been
created, contracted or incurred in reliance upon this Article Ten, and all
dealings between the Company and the holders and owners of the Senior Debt of
the Company shall be deemed to have been consummated in reliance upon this
Article Ten.

 

SECTION 10.05.  Obligations of the Company Unconditional.  Nothing contained in this Article Ten
or elsewhere in this Indenture or in the Notes is intended to or shall impair,
as between the Company and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the principal of and interest
on the Notes as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of the Senior Debt,
nor shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this
Article Ten of the holders of Senior Debt in respect of cash, property or
Notes of the Company received upon the exercise of any such remedy.  Upon any payment or distribution of assets
or securities of the Company referred to in this Article Ten, the Trustee,
subject to the provisions of Sections 7.01 and 7.02, and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any liquidation, dissolution, winding-up or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidating trustee or agent or other Person making any
payment or distribution to the Trustee or to the Holders for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other Indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this
Article Ten.

 

83

 

Nothing in this
Article Ten shall apply to the claims of, or payments to, the Trustee
under or pursuant to Section 7.07.

 

The Trustee shall be entitled to rely on the delivery
to it of a written notice by a Person representing himself or itself to be a
holder of any Senior Debt (or a trustee on behalf of, or other representative
of, such holder) to establish that such notice has been given by a holder of
such Senior Debt or a trustee or representative on behalf of any such holder.

 

In the event that the Trustee determines in good faith
that any evidence is required with respect to the right of any Person as a
holder of Senior Debt to participate in any payment or distribution pursuant to
this Article Ten, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of Senior Debt
held by such Person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article Ten, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.

 

SECTION 10.06.  Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. 
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by
the Trustee in respect of the Notes pursuant to the provisions of this
Article Ten.  Regardless of
anything to the contrary contained in this Article Ten or elsewhere in
this Indenture, the Trustee shall not be charged with knowledge of the
existence of any default or event of default with respect to any Senior Debt or
of any other facts which would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing from
the Company, or from a holder of Senior Debt or a Representative therefor,
together with proof satisfactory to the Trustee of such holding of Senior Debt
or of the authority of such Representative, and, prior to the receipt of any
such written notice, the Trustee shall be entitled to assume (in the absence of
actual knowledge to the contrary) that no such facts exist.

 

SECTION 10.07.  Application by Trustee of Assets
Deposited with It.  U.S. Legal
Tender or U.S. Government Obligations deposited in trust with the Trustee
pursuant to and in accordance with Sections 8.01 and 8.02 shall be for
the sole benefit of the Holders of the Notes and, to the extent allocated for
the payment of Notes, shall not from and after the time of such deposit be
subject to the subordination provisions of this Article Ten.  Otherwise, any deposit of assets or
securities by or on behalf of the Company with the Trustee or any Paying Agent
(whether or not in trust) for the payment of principal of or interest on any
Notes shall be subject to the provisions of this Article Ten; provided, however, that if prior to the second Business Day
preceding the date on which by the terms of this Indenture any such assets may
become distributable for any purpose (including, without limitation, the
payment of either principal of or interest on any Note) the Trustee or such
Paying Agent shall not have received with respect to such assets any notice
provided for in Section 10.06, then the Trustee or such Paying
Agent shall have full power and authority to receive such assets and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary received by it on or after such date.  The foregoing shall not apply to the Paying
Agent if the Company or any Subsidiary or Affiliate of the Company is acting as
Paying Agent.  Nothing contained in this

 

84

 

Section 10.07
shall limit the right of the holders of Senior Debt to recover payments as
contemplated by this Article Ten.

 

SECTION 10.08.  No Waiver of Subordination Provisions.

 

(1) 
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act by any such holder, or by any non-compliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.

 

(2) 
Without limiting the generality of subsection (1) of this Section 10.08,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Notes, without
incurring responsibility to the Holders of the Notes and without impairing or
releasing the subordination provided in this Article Ten or the
obligations hereunder of the Holders of the Notes to the holders of Senior
Debt, do any one or more of the following: 
(A) change the manner, place, terms or time of payment of, or renew,
refinance, replace or alter, Senior Debt or any instrument evidencing the same
or any agreement under which Senior Debt is outstanding; (B) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (C) release any Person liable in any manner for the
collection or payment of Senior Debt; and (D) exercise or refrain from
exercising any rights against the Company and any other Person.

 

SECTION 10.09.  Holders Authorize Trustee To Effectuate Subordination
of Notes.  Each Holder of the Notes
by such Holder’s acceptance thereof authorizes and expressly directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effect the subordination provisions contained in this Article Ten, and
appoints the Trustee such Holder’s attorney-in-fact for such purpose,
including, in the event of any liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or marshaling of assets
of the Company tending towards liquidation or reorganization of the business
and assets of the Company, the immediate filing of a claim for the unpaid
balance of such Holder’s Notes in the form required in said proceedings and
cause said claim to be approved.  If the
Trustee does not file a proper claim or proof of debt in the form required in
such proceeding prior to 30 days before the expiration of the time to file such
claim or claims, then any of the holders of the Senior Debt or their
Representative is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Notes. 
Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Debt or their Representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof, or to authorize the Trustee or the holders of Senior Debt or
their Representative to vote in respect of the claim of any Holder in any such
proceeding.

 

SECTION 10.10.  Right of Trustee to Hold Senior Debt.  The Trustee and any agent of the Company or
the Trustee shall be entitled to all the rights set forth in this
Article Ten with respect to any Senior Debt which may at any time be held
by it in its individual or any other

 

85

 

capacity to the same
extent as any other holder of Senior Debt and nothing in this Indenture shall
deprive the Trustee or any such agent of any of its rights as such holder.

 

Whenever a distribution is to be made or a notice
given to holders or owners of Senior Debt, the distribution may be made and the
notice may be given to their Representative, if any.

 

SECTION 10.11.  This Article Ten Not To Prevent
Events of Default.  The failure to
make a payment on account of principal of or interest on the Notes by reason of
any provision of this Article Ten will not be construed as preventing the
occurrence of an Event of Default.

 

Nothing contained in this Article Ten shall limit
the right of the Trustee or the Holders of Notes to take any action to
accelerate the maturity of the Notes pursuant to Article Six or to pursue
any rights or remedies hereunder or under applicable law, subject to the rights,
if any, under this Article Ten of the holders, from time to time, of
Senior Debt.

 

SECTION 10.12.  No Fiduciary Duty of Trustee to Holders
of Senior Debt.  The Trustee shall
not be deemed to owe any fiduciary duty to the holders of Senior Debt, and it
undertakes to perform or observe such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the Senior Debt shall be read into this Indenture
against the Trustee.  The Trustee shall
not be liable to any such holders (other than for its willful misconduct or
gross negligence) if it shall pay over or deliver to the Holders of Notes or
the Company or any other Person money or assets in compliance with the terms of
this Indenture.  Nothing in this Section 10.12
shall affect the obligation of any Person other than the Trustee to hold such
payment for the benefit of, and to pay such payment over to, the holders of
Senior Debt or their Representative.

 

ARTICLE ELEVEN

GUARANTEE OF NOTES

 

SECTION 11.01.  Unconditional Guarantee.  Subject to the provisions of this
Article Twelve, each Guarantor, if any, hereby, jointly and severally,
unconditionally and irrevocably guarantees, on a senior subordinated basis
(such guarantee to be referred to herein as a “Guarantee”) to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, the Notes or the obligations of the Company
hereunder or thereunder, that:  (1) the
principal of, premium, if any, and interest on the Notes (and any Additional
Interest payable thereon) shall be duly and punctually paid in full when due,
whether at maturity, upon redemption at the option of Holders pursuant to the
provisions of the Notes relating thereto, by acceleration or otherwise, and
interest on the overdue principal and (to the extent permitted by law)
interest, if any, on the Notes and all other obligations of the Company or the
Guarantors to the Holders or the Trustee hereunder or thereunder (including
amounts due the Trustee under Section 7.07) and all other
obligations shall be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (2) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, the same
shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at maturity, by acceleration or
otherwise.  Failing payment when due of
any amount so guaranteed, or failing performance of any other obligation of the
Company to the

 

86

 

Holders under this
Indenture or under the Notes, for whatever reason, each Guarantor shall be
obligated to pay, or to perform or cause the performance of, the same
immediately.  An Event of Default under
this Indenture or the Notes shall constitute an event of default under this
Guarantee, and shall entitle the Holders of Notes to accelerate the obligations
of the Guarantors hereunder in the same manner and to the same extent as the
obligations of the Company.

 

Each of the Guarantors hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, any release of any other
Guarantor, the recovery of any judgment against the Company, any action to
enforce the same, whether or not a Guarantee is affixed to any particular Note,
or any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. 
Each of the Guarantors hereby waives the benefit of diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands whatsoever and
covenants that its Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and this
Guarantee.  This Guarantee is a
guarantee of payment and not of collection. 
If any Holder or the Trustee is required by any court or otherwise to
return to the Company or to any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or such
Guarantor, any amount paid by the Company or such Guarantor to the Trustee or
such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. 
Each Guarantor further agrees that, as between it, on the one hand, and
the Holders of Notes and the Trustee, on the other hand, (1) subject to this
Article Eleven, the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six hereof for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (2) in
the event of any acceleration of such obligations as provided in
Article Six hereof, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantors for the purpose of
this Guarantee.

 

No stockholder, officer, director, employee or
incorporator, past, present or future, of any Guarantor, as such, shall have
any personal liability under this Guarantee by reason of his, her or its status
as such stockholder, officer, director, employee or incorporator.

 

Each Guarantor that makes a payment or distribution
under its Guarantee shall be entitled to a contribution from each other
Guarantor in an amount pro rata, based on the net assets of each Guarantor,
determined in accordance with GAAP.

 

SECTION 11.02.  Limitations on Guarantees.  The obligations of each Guarantor under its
Guarantee will be limited to the maximum amount which, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to its contribution obligations under this Indenture,
will result in the obligations of such Guarantor under its Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law.

 

87

 

SECTION 11.03.  Execution and Delivery of Guarantee.  To further evidence the Guarantee set forth
in Section 11.01, each Guarantor hereby agrees that a notation of
such Guarantee, substantially in the form of Exhibit F hereto, shall be
endorsed on each Note authenticated and delivered by the Trustee.  Such Guarantee shall be executed on behalf
of each Guarantor by either manual or facsimile signature of one Officer of
each Guarantor, each of whom, in each case, shall have been duly authorized to
so execute by all requisite corporate action. 
The validity and enforceability of any Guarantee shall not be affected
by the fact that it is not affixed to any particular Note.

 

Each of the Guarantors hereby agrees that its
Guarantee set forth in Section 11.01 shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Guarantee.

 

If an Officer of a Guarantor whose signature is on
this Indenture or a Guarantee no longer holds that office at the time the
Trustee authenticates the Note on which such Guarantee is endorsed or at any
time thereafter, such Guarantor’s Guarantee of such Note shall be valid
nevertheless.

 

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

 

SECTION 11.04.  Release of a Guarantor.

 

(1) 
If no Default exists or would exist under this Indenture, upon the sale
or disposition of all of the Capital Stock of a Guarantor by the Company or one
or more Restricted Subsidiaries of the Company, or upon the consolidation or
merger of a Guarantor with or into any Person in compliance with
Article Five (in each case, other than to the Company or a Wholly Owned
Restricted Subsidiary), or if any Guarantor is dissolved or liquidated in
accordance with this Indenture, or if a Guarantor is designated an Unrestricted
Subsidiary in accordance with Section 4.14, such Guarantor and each
Subsidiary of such Guarantor that is also a Guarantor shall be automatically
and unconditionally released from all obligations under this Article Eleven
without any further action required on the part of the Trustee or any Holder; provided, however, that each such
Guarantor is sold or disposed of in accordance with this Indenture.  Any Guarantor not so released or the entity
surviving such Guarantor, as applicable, shall remain or be liable under its
Guarantee as provided in this Article Eleven.

 

(2) 
The Trustee shall deliver an appropriate instrument evidencing the
release of a Guarantor upon receipt of a request by the Company or such
Guarantor accompanied by an Officers’ Certificate and an Opinion of Counsel
certifying as to the compliance with this Section 11.04, provided
the legal counsel delivering such Opinion of Counsel may rely as to matters of
fact on one or more Officers’ Certificates.

 

The Trustee shall execute any documents reasonably
requested by the Company or a Guarantor in order to evidence the release of
such Guarantor from its obligations under its Guarantee endorsed on the Notes
and under this Article Eleven.

 

88

 

Except as set forth in Articles Four and Five and this
Section 11.04, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.

 

SECTION 11.05.  Waiver of Subrogation.  Until this Indenture is discharged and all
of the Notes are discharged and paid in full, each Guarantor hereby irrevocably
waives and agrees not to exercise any claim or other rights which it may now or
hereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of the Company’s obligations under the Notes or this
Indenture and such Guarantor’s obligations under this Guarantee and this
Indenture, in any such instance including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, and any
right to participate in any claim or remedy of the Holders against the Company,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Company, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account of such claim
or other rights.  If any amount shall be
paid to any Guarantor in violation of the preceding sentence and any amounts
owing to the Trustee or the Holders of Notes under the Notes, this Indenture,
or any other document or instrument delivered under or in connection with such
agreements or instruments, shall not have been paid in full, such amount shall
have been deemed to have been paid to such Guarantor for the benefit of, and
held in trust for the benefit of, the Trustee or the Holders and shall
forthwith be paid to the Trustee for the benefit of itself or such Holders to
be credited and applied to the obligations in favor of the Trustee or the
Holders, as the case may be, whether matured or unmatured, in accordance with
the terms of this Indenture.  Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Indenture and that the waiver
set forth in this Section 11.05 is knowingly made in contemplation
of such benefits.

 

SECTION 11.06.  No Set-Off.  Each payment to be made by a Guarantor hereunder in respect of
the Obligations shall be payable in the currency or currencies in which such
Obligations are denominated, and shall be made without set-off, counterclaim,
reduction or diminution of any kind or nature.

 

SECTION 11.07.  Obligations Absolute.  The obligations of each Guarantor hereunder
are and shall be absolute and unconditional and any monies or amounts expressed
to be owing or payable by each Guarantor hereunder which may not be recoverable
from such Guarantor on the basis of a Guarantee shall be recoverable from such
Guarantor as a primary obligor and principal debtor in respect thereof.

 

SECTION 11.08.  Obligations Continuing.  The obligations of each Guarantor hereunder
shall be continuing and shall remain in full force and effect until all the
obligations have been paid and satisfied in full.  Each Guarantor agrees with the Trustee that, if requested, it
will from time to time deliver to the Trustee suitable acknowledgments of this
continued liability hereunder and under any other instrument or instruments in
such form as counsel to the Trustee may advise and as will prevent any action
brought against it in respect of any default hereunder being barred by any
statute of limitations now or hereafter in force and, in the event of the
failure

 

89

 

of a Guarantor so to do, it hereby irrevocably appoints the Trustee the
attorney and agent of such Guarantor to make, execute and deliver such written
acknowledgment or acknowledgments or other instruments as may from time to time
become necessary or advisable, in the judgment of the Trustee on the advice of
counsel, to fully maintain and keep in force the liability of such Guarantor
hereunder.

 

SECTION 11.09.  Obligations Not Reduced.  The obligations of each Guarantor hereunder
shall not be satisfied, reduced or discharged solely by the payment of such
principal, premium, if any, interest, fees and other monies or amounts as may
at any time prior to discharge of this Indenture pursuant to Article Eight
be or become owing or payable under or by virtue of or otherwise in connection
with the Notes or this Indenture.

 

SECTION 11.10.  Obligations Reinstated.  The obligations of each Guarantor hereunder
shall continue to be effective or shall be reinstated, as the case may be, if
at any time any payment which would otherwise have reduced the obligations of
any Guarantor hereunder (whether such payment shall have been made by or on
behalf of the Company or by or on behalf of a Guarantor) is rescinded or
reclaimed from any of the Holders upon the insolvency, bankruptcy, liquidation
or reorganization of the Company or any Guarantor or otherwise, all as though
such payment had not been made.  If
demand for, or acceleration of the time for, payment by the Company is stayed
upon the insolvency, bankruptcy, liquidation or reorganization of the Company,
all such Indebtedness otherwise subject to demand for payment or acceleration
shall nonetheless be payable by each Guarantor as provided herein.

 

SECTION 11.11.  Obligations Not Affected.  The obligations of each Guarantor hereunder
shall not be affected, impaired or diminished in any way by any act, omission,
matter or thing whatsoever, occurring before, upon or after any demand for
payment hereunder (and whether or not known or consented to by any Guarantor or
any of the Holders) which, but for this provision, might constitute a whole or
partial defense to a claim against any Guarantor hereunder or might operate to
release or otherwise exonerate any Guarantor from any of its obligations
hereunder or otherwise affect such obligations, whether occasioned by default
of any of the Holders or otherwise, including, without limitation:

 

(1) 
any limitation of status or power, disability, incapacity or other
circumstance relating to the Company or any other person, including any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, winding up or other proceeding involving or affecting the Company
or any other person;

 

(2) 
any irregularity, defect, unenforceability or invalidity in respect of
any Indebtedness or other obligation of the Company or any other person under
this Indenture, the Notes or any other document or instrument;

 

(3) 
any failure of the Company, whether or not without fault on its part, to
perform or comply with any of the provisions of this Indenture or the Notes, or
to give notice thereof to a Guarantor;

 

90

 

(4) 
the taking or enforcing or exercising or the refusal or neglect to take
or enforce or exercise any right or remedy from or against the Company or any
other Person or their respective assets or the release or discharge of any such
right or remedy;

 

(5) 
the granting of time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any other
Person;

 

(6) 
any change in the time, manner or place of payment of, or in any other
term of, any of the Notes, or any other amendment, variation, supplement,
replacement or waiver of, or any consent to departure from, any of the Notes or
this Indenture, including, without limitation, any increase or decrease in the
principal amount of or premium, if any, or interest on any of the Notes;

 

(7) 
any change in the ownership, control, name, objects, businesses, assets,
capital structure or constitution of the Company or a Guarantor;

 

(8) 
any merger or amalgamation of the Company or a Guarantor with any Person
or Persons;

 

(9) 
the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of the
Obligations or the obligations of a Guarantor under its Guarantee; and

 

(10) 
any other circumstance (other than by complete, irrevocable payment or a
release made pursuant to Section 11.04) that might otherwise
constitute a legal or equitable discharge or defense of the Company under this
Indenture or the Notes or of a Guarantor in respect of its Guarantee hereunder.

 

SECTION 11.12.  Waiver.  Without in any way limiting the provisions of Section 11.01
hereof, each Guarantor hereby waives notice of acceptance hereof, notice of any
liability of any Guarantor hereunder, notice or proof of reliance by the
Holders upon the obligations of any Guarantor hereunder, and diligence,
presentment, demand for payment on the Company, protest, notice of dishonor or
non-payment of any of the Obligations, or other notice or formalities to the
Company or any Guarantor of any kind whatsoever.

 

SECTION 11.13.  No Obligation To Take Action Against the
Company.  Neither the Trustee nor
any other Person shall have any obligation to enforce or exhaust any rights or
remedies or to take any other steps under any security for the Obligations or
against the Company or any other Person or any Property of the Company or any
other Person before the Trustee is entitled to demand payment and performance
by any or all Guarantors of their liabilities and obligations under their
Guarantees or under this Indenture.

 

SECTION 11.14.  Dealing with the Company and Others.  The Holders, without releasing, discharging,
limiting or otherwise affecting in whole or in part the obligations and
liabilities of any Guarantor hereunder and without the consent of or notice to
any Guarantor, may

 

91

 

(1) 
grant time, renewals, extensions, compromises, concessions, waivers,
releases, discharges and other indulgences to the Company or any other Person;

 

(2) 
take or abstain from taking security or collateral from the Company or
from perfecting security or collateral of the Company;

 

(3) 
release, discharge, compromise, realize, enforce or otherwise deal with
or do any act or thing in respect of (with or without consideration) any and
all collateral, mortgages or other security given by the Company or any third
party with respect to the obligations or matters contemplated by this Indenture
or the Notes;

 

(4) 
accept compromises or arrangements from the Company;

 

(5) 
apply all monies at any time received from the Company or from any
security upon such part of the Obligations as the Holders may see fit or change
any such application in whole or in part from time to time as the Holders may
see fit; and

 

(6) 
otherwise deal with, or waive or modify their right to deal with, the
Company and all other Persons and any security as the Holders or the Trustee
may see fit.

 

SECTION 11.15.  Default and Enforcement.  If any Guarantor fails to pay in accordance
with Section 11.01 hereof, the Trustee may proceed in its name as
trustee hereunder in the enforcement of the Guarantee of any such Guarantor and
such Guarantor’s obligations thereunder and hereunder by any remedy provided by
law, whether by legal proceedings or otherwise, and to recover from such
Guarantor the obligations.

 

SECTION 11.16.  Amendment, Etc.  No amendment, modification or waiver of any
provision of this Indenture relating to any Guarantor or consent to any
departure by any Guarantor or any other Person from any such provision will in
any event be effective unless it is signed by such Guarantor and the Trustee.

 

SECTION 11.17.  Acknowledgment.  Each Guarantor hereby acknowledges
communication of the terms of this Indenture and the Notes and consents to and
approves of the same.

 

SECTION 11.18.  Costs and Expenses.  Each Guarantor shall pay on demand by the
Trustee any and all costs, fees and expenses (including, without limitation,
legal fees on a solicitor and client basis) incurred by the Trustee, its
agents, advisors and counsel or any of the Holders in enforcing any of their
rights under any Guarantee in the same manner as the Company shall be requested
to pay the Trustee’s fees.

 

SECTION 11.19.  No Merger or Waiver; Cumulative Remedies.  No Guarantee shall operate by way of merger
of any of the obligations of a Guarantor under any other agreement, including,
without limitation, this Indenture.  No
failure to exercise and no delay in exercising, on the part of the Trustee or
the Holders, any right, remedy, power or privilege hereunder or under this
Indenture or the Notes, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder or under
this Indenture or the Notes preclude any other or further exercise thereof or
the exercise of any other

 

92

 

right, remedy,
power or privilege.  The rights,
remedies, powers and privileges in the Guarantee and under this Indenture, the
Notes and any other document or instrument between a Guarantor and/or the
Company and the Trustee are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

 

SECTION 11.20.  Survival of Obligations.  Without prejudice to the survival of any of
the other obligations of each Guarantor hereunder, the obligations of each
Guarantor under Section 11.01 shall survive the payment in full of
the Obligations and shall be enforceable against such Guarantor without regard
to and without giving effect to any defense, right of offset or counterclaim
available to or which may be asserted by the Company or any Guarantor.

 

SECTION 11.21.  Guarantee in Addition to Other
Obligations.  The obligations of
each Guarantor under its Guarantee and this Indenture are in addition to and
not in substitution for any other obligations to the Trustee or to any of the
Holders in relation to this Indenture or the Notes and any guarantees or
security at any time held by or for the benefit of any of them.

 

SECTION 11.22.  Severability.  Any provision of this Article Eleven
which is prohibited or unenforceable in any jurisdiction shall not invalidate
the remaining provisions and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction unless its removal would substantially defeat the basic
intent, spirit and purpose of this Indenture and this Article Eleven.

 

SECTION 11.23.  Successors and Assigns.  Each Guarantee shall be binding upon and
inure to the benefit of each Guarantor and the Trustee and the other Holders
and their respective successors and permitted assigns, except that no Guarantor
may assign any of its obligations hereunder or thereunder.

 

ARTICLE TWELVE

SUBORDINATION OF GUARANTEE

 

SECTION 12.01.  Obligations of Guarantors Subordinated to
Guarantor Senior Debt.  Anything
herein to the contrary notwithstanding, each of the Guarantors, for itself and
its successors, and each Holder, by his or her acceptance of Guarantees, agrees
that the payment of all Obligations owing to the Holders in respect of its
Guarantee (collectively, as to any Guarantor, its “Guarantee Obligations”) is
subordinated, to the extent and in the manner provided in this Article Twelve,
to the prior payment in full in cash or in Cash Equivalents (other than clause
(7) of the definition of “Cash Equivalents” in Section 1.01),
or such payment duly provided for to the satisfaction of the holders of
Guarantor Senior Debt, of all Obligations on Guarantor Senior Debt of such
Guarantor, including without limitation, the Guarantors’ obligations under the
Credit Agreement; that the subordination is for the benefit of, and shall be
enforceable directly by, any holder of Guarantor Senior Debt, and that each
holder of Guarantor Senior Debt whether now outstanding or hereafter created,
incurred, assumed or guaranteed shall be deemed to have acquired Guarantor
Senior Debt in reliance upon the covenants and provisions contained in this
Indenture and the Notes; provided that
the Guarantee Obligations of each Guarantor will rank on a pari passu basis
with any guarantees on the Existing Notes.

 

93

 

This Article Twelve shall constitute a continuing
offer to all Persons who become holders of, or continue to hold, Guarantor
Senior Debt, and such provisions are made for the benefit of the holders of
Guarantor Senior Debt and such holders are made obligees hereunder and any one
or more of them may enforce such provisions.

 

SECTION 12.02.  Suspension of Guarantee Obligations When
Guarantor Senior Debt Is in Default.

 

(1) 
If any default occurs and is continuing in the payment when due, whether
at maturity, upon any redemption, by declaration or otherwise, of any principal
or interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees or commissions with respect to, any Guarantor Senior
Debt of a Guarantor or guaranteed by a Guarantor, no payment or distribution of
any kind or character shall be made by or on behalf of such Guarantor or any
other Person on its or their behalf with respect to any Obligations on the
Notes or to acquire, repurchase, redeem or defease any of the Notes for cash or
property or otherwise.  In addition, if
any other event of default occurs and is continuing with respect to any
Designated Guarantor Senior Debt of any Guarantor, as such event of default is
defined in the instrument creating or evidencing such Designated Guarantor
Senior Debt, permitting the holders of such Designated Guarantor Senior Debt
then outstanding to accelerate the maturity thereof and if the Representative
for the respective issue of Designated Guarantor Senior Debt gives a Default
Notice, then, unless and until all events of default have been cured or waived
or have ceased to exist or the Trustee receives notice from the Representative
for the respective issue of Designated Guarantor Senior Debt terminating the
Blockage Period, during the Blockage Period, neither said Guarantor nor any
other Person on its behalf shall (A) make any payment or distribution of any
kind or character with respect to any Obligations on the Notes or (B) acquire,
repurchase, redeem or defease any of the Notes for cash or property or
otherwise.  Notwithstanding anything
herein to the contrary, in no event will a Blockage Period extend beyond 180
days from the date the payment on the Notes was due and only one such Blockage
Period may be commenced within any 360 consecutive days.  No event of default which existed or was
continuing on the date of the commencement of any Blockage Period with respect
to the Designated Guarantor Senior Debt shall be, or be made, the basis for
commencement of a second Blockage Period by the Representative of such Designated
Guarantor Senior Debt whether or not within a period of 360 consecutive days,
unless such event of default shall have been cured or waived for a period of
not less than 90 consecutive days (it being acknowledged that any subsequent
action, or any breach of any financial covenants for a period commencing after
the date of commencement of such Blockage Period, that in either case, would
give rise to an event of default pursuant to any provisions under which an
event of default previously existed or was continuing shall constitute a new
event of default for this purpose).

 

(2) 
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder from such Guarantor when such payment is
prohibited by Section 12.02(1), such payment shall be held for the
benefit of, and shall be paid over or delivered to, the holders of Guarantor
Senior Debt with respect to such Guarantor (pro rata to such holders on the
basis of the respective amount of such Guarantor Senior Debt held by such
holders) or their respective Representatives, as their respective interests may
appear.  The Trustee shall be entitled
to rely on information regarding amounts then due and owing on the Guarantor
Senior Debt, if any, received from the holders of such Guarantor Senior Debt
(or their

 

94

 

Representatives) or, if such information is not received from such
holders or their Representatives after written request therefor, from the
Company and only amounts included in the information provided to the Trustee
shall be paid to the holders of such Guarantor Senior Debt.

 

Nothing contained in this Article Twelve shall
limit the right of the Trustee or the Holders of Notes to take any action to
accelerate the maturity of the Notes pursuant to Section 6.02 or to
pursue any rights or remedies hereunder; provided
that all Guarantor Senior Debt thereafter due or declared to be due
shall first be paid in full in cash or Cash Equivalents (other than clause
(7) in the definition of “Cash Equivalents” in Section 1.01)
before the Holders are entitled to receive any payment of any kind or character
with respect to Obligations on the Notes.

 

SECTION 12.03.  Guarantee Obligations Subordinated to
Prior Payment of All Guarantor Senior Debt on Dissolution, Liquidation or
Reorganization of Such Guarantor.

 

(1) 
Upon any direct or indirect payment or distribution of assets of any
Guarantor of any kind or character, whether in cash, property or securities, to
creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other
similar proceeding relating to such Guarantor or its property, whether
voluntary or involuntary, all Obligations due or to become due upon all
Guarantor Senior Debt shall first be paid in full in cash or in Cash
Equivalents (other than clause (7) in the definition of “Cash Equivalents”
in Section 1.01), or such payment duly provided for to the
satisfaction of the holders of Guarantor Senior Debt, before any payment or
distribution of any kind or character is made on account of any Obligations on
the Guarantee of such Guarantor, or for the acquisition, repurchase, redemption
or defeasance of the Guarantee of such Guarantor for cash or property or
otherwise.  Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding,
any direct or indirect payment or distribution of assets of such Guarantor of
any kind or character, whether in cash, property or securities, to which the
Holders of the Guarantee of such Guarantor or the Trustee under this Indenture
would be entitled, except for the provisions hereof, shall be paid by the
Guarantor or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Holders or by
the Trustee under this Indenture if received by them, directly to the holders
of Guarantor Senior Debt (pro rata
to such holders on the basis of the respective amounts of Guarantor Senior Debt
held by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior
Debt may have been issued, as their respective interests may appear, for
application to the payment of Guarantor Senior Debt remaining unpaid until all
such Guarantor Senior Debt has been paid in full in cash or in Cash Equivalents
(other than clause (7) in the definition of “Cash Equivalents” in Section 1.01)
after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of Guarantor Senior Debt.

 

(2) 
To the extent any payment of Guarantor Senior Debt (whether by or on
behalf of any Guarantor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is

 

95

 

recovered by, or paid over to, such receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person, the Guarantor Senior Debt
or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment has not occurred.

 

(3) 
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, shall be received by any Holder when such payment
or distribution is prohibited by this Section 12.03(3), such
payment or distribution shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of Guarantor Senior Debt (pro rata to such holders on the basis of
the respective amount of Guarantor Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Guarantor Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of
Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt has
been paid in full in cash or in Cash Equivalents (other than clause (7) in
the definition of “Cash Equivalents” in Section 1.01), after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.

 

(4) 
The consolidation of any Guarantor with, or the merger of any Guarantor
with or into, another corporation or the liquidation or dissolution of any
Guarantor following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the
Guarantor Senior Debt shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such
other corporation shall, as a part of such consolidation, merger, conveyance or
transfer, assume such Guarantor’s obligations hereunder in accordance with
Article Five hereof.

 

SECTION 12.04.  Holders of Guarantee Obligations To Be
Subrogated to Rights of Holders of Guarantor Senior Debt.  Subject to the payment in full in cash or
Cash Equivalents (other than clause (7) in the definition of “Cash Equivalents”
in Section 1.01), or such payment duly provided for to the
satisfaction of the holders of Guarantor Senior Debt, of all Guarantor Senior
Debt, the Holders of Guarantee Obligations of a Guarantor shall be subrogated
to the rights of the holders of Guarantor Senior Debt of such Guarantor to
receive payments or distributions of assets of such Guarantor applicable to
such Guarantor Senior Debt until all amounts owing on or in respect of the
Guarantee Obligations shall be paid in full in cash or Cash Equivalents (other
than clause (7) in the definition of “Cash Equivalents” in Section 1.01),
and for the purpose of such subrogation no payments or distributions to the
holders of such Guarantor Senior Debt by or on behalf of such Guarantor, or by
or on behalf of the Holders by virtue of this Article Twelve, which otherwise
would have been made to the Holders shall, as between such Guarantor and the
Holders, be deemed to be payment by such Guarantor to or on account of such
Guarantor Senior Debt, it being understood that the provisions of this
Article Twelve are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of such
Guarantor Senior Debt, on the other hand.

 

If any payment or distribution to which the Holders
would otherwise have been entitled but for the provisions of this
Article Twelve shall have been applied, pursuant to the provisions of this
Article Twelve, to the payment of all amounts payable under such Guarantor
Senior Debt, then the Holders shall be entitled to receive from the holders of
such Guarantor

 

96

 

Senior Debt any such
payments or distributions received by such holders of such Guarantor Senior
Debt in excess of the amount sufficient to pay all amounts payable under or in
respect of such Guarantor Senior Debt in full in cash or Cash Equivalents
(other than clause (7) in the definition of “Cash Equivalents” in Section 1.01),
or such payment duly provided for to the satisfaction of the holders of
Guarantor Senior Debt.

 

Each Holder by purchasing or accepting a Note waives
any and all notice of the creation, modification, renewal, extension or accrual
of any Guarantor Senior Debt of the Guarantors and notice of or proof of
reliance by any holder or owner of Guarantor Senior Debt of the Guarantors upon
this Article Twelve and the Guarantor Senior Debt of the Guarantors shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this Article Twelve, and all dealings between the Guarantors and the
holders and owners of the Guarantor Senior Debt of the Guarantors shall be
deemed to have been consummated in reliance upon this Article Twelve.

 

SECTION 12.05.  Obligations of the Guarantors
Unconditional.  Nothing contained in
this Article Twelve or elsewhere in this Indenture or in the Guarantees is
intended to or shall impair, as between the Guarantors and the Holders, the
obligation of the Guarantors, which is absolute and unconditional, to pay to
the Holders all amounts due and payable under the Guarantees as and when the
same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Guarantors other than the holders of the Guarantor Senior Debt, nor shall
anything herein or therein prevent the Trustee or any Holder from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article Twelve, of
the holders of Guarantor Senior Debt in respect of cash, property or securities
of the Guarantors received upon the exercise of any such remedy.  Upon any payment or distribution of assets
of any Guarantor referred to in this Article Twelve, the Trustee, subject
to the provisions of Sections 7.01 and 7.02, and the Holders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which any liquidation, dissolution, winding-up or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidating trustee or agent or other Person making any
payment or distribution to the Trustee or to the Holders for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Guarantor Senior Debt and other Indebtedness of
any Guarantor, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article Twelve.  Nothing in this
Article Twelve shall apply to the claims of, or payments to, the Trustee
under or pursuant to Section 7.07. 
The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of any
Guarantor Senior Debt (or a trustee on behalf of, or other representative of,
such holder) to establish that such notice has been given by a holder of such
Guarantor Senior Debt or a trustee or representative on behalf of any such
holder.

 

In the event that the Trustee determines in good faith
that any evidence is required with respect to the right of any Person as a
holder of Guarantor Senior Debt to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Guarantor Senior Debt held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this

 

97

 

Article Twelve, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.

 

SECTION 12.06.  Trustee Entitled To Assume Payments Not
Prohibited in Absence of Notice. 
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by
the Trustee in respect of the Notes pursuant to the provisions of this
Article Twelve.  Regardless of
anything to the contrary contained in this Article Twelve or elsewhere in
this Indenture.  The Trustee shall not
be charged with knowledge of the existence of any default or event of default
with respect to any Guarantor Senior Debt or of any other facts which would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing from the Company or the
Guarantor, or from a holder of Guarantor Senior Debt or a Representative
therefor, together with proof satisfactory to the Trustee of such holding of
Guarantor Senior Debt or of the authority of such Representative, and, prior to
the receipt of any such written notice, the Trustee shall be entitled to assume
(in the absence of actual knowledge to the contrary) that no such facts exist.

 

SECTION 12.07.  Application by Trustee of Assets
Deposited with It.  U.S. Legal
Tender or U.S. Government Obligations deposited in trust with the Trustee
pursuant to and in accordance with Sections 8.01 and 8.02 shall be for
the sole benefit of Holders of the Notes and, to the extent allocated for the
payment of Notes, shall not from and after the time of such deposit be subject
to the subordination provisions of this Article Twelve.  Otherwise, any deposit of assets or
securities by or on behalf of a Guarantor with the Trustee or any Paying Agent
(whether or not in trust) for payment of the Guarantees shall be subject to the
provisions of this Article Twelve; provided,
however, that if prior to the second Business Day preceding the date
on which by the terms of this Indenture any such assets may become
distributable for any purpose (including, without limitation, the payment of
either principal of or interest on any Note) the Trustee or such Paying Agent
shall not have received with respect to such assets any notice provided for in Section 12.06,
then the Trustee or such Paying Agent shall have full power and authority to
receive such assets and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary received by
it on or after such date.  The foregoing
shall not apply to the Paying Agent if the Company or any Subsidiary or
Affiliate of the Company is acting as Paying Agent.  Nothing contained in this Section 12.07 shall limit
the right of the holders of Guarantor Senior Debt to recover payments as
contemplated by this Article Twelve.

 

SECTION 12.08.  No Waiver of Subordination Provisions.

 

(1) 
No right of any present or future holder of any Guarantor Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any
Guarantor or by any act or failure to act, by any such holder, or by any
non-compliance by any Guarantor with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have or
be otherwise charged with.

 

(2) 
Without limiting the generality of subsection (1) of this Section 12.08,
the holders of Guarantor Senior Debt may, at any time and from time to time,
without the consent of

 

98

 

or notice to the Trustee or the Holders of the Notes, without incurring
responsibility to the Holders of the Notes and without impairing or releasing
the subordination provided in this Article Twelve or the obligations
hereunder of the Holders of the Notes to the holders of Guarantor Senior Debt,
do any one or more of the following: 
(A) change the manner, place, terms or time of payment of, or renew,
refinance, replace or alter, Guarantor Senior Debt or any instrument evidencing
the same or any agreement under which Guarantor Senior Debt is outstanding; (B)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Guarantor Senior Debt; (C) release any Person liable in
any manner for the collection or payment of Guarantor Senior Debt; and (D)
exercise or refrain from exercising any rights against the Guarantors and any
other Person.

 

SECTION 12.09.  Holders Authorize Trustee To Effectuate
Subordination of Guarantee Obligations. 
Each Holder of the Guarantee Obligations by its acceptance thereof
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effect the subordination provisions
contained in this Article Twelve, and appoints the Trustee its
attorney-in-fact for such purpose, including, in the event of any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors or marshaling of assets of any Guarantor tending towards liquidation
or reorganization of the business and assets of any Guarantor, the immediate
filing of a claim for the unpaid balance under its or his Guarantee Obligations
in the form required in said proceedings and cause said claim to be
approved.  If the Trustee does not file
a proper claim or proof of debt in the form required in such proceeding prior
to 30 days before the expiration of the time to file such claim or claims, then
any of the holders of the Guarantor Senior Debt or their Representative is
hereby authorized to file an appropriate claim for and on behalf of the Holders
of said Guarantee Obligations.  Nothing
herein contained shall be deemed to authorize the Trustee or the holders of
Guarantor Senior Debt or their Representative to authorize or consent to or
accept or adopt on behalf of any holder of Guarantee Obligations any plan of
reorganization, arrangement, adjustment or composition affecting the Guarantee
Obligations or the rights of any Holder thereof, or to authorize the Trustee or
the holders of Guarantor Senior Debt or their Representative to vote in respect
of the claim of any holder of Guarantee Obligations in any such proceeding.

 

SECTION 12.10.  Right of Trustee To Hold Guarantor Senior
Debt.  The Trustee shall be entitled
to all of the rights set forth in this Article Twelve in respect of any
Guarantor Senior Debt at any time held by it to the same extent as any other
holder of Guarantor Senior Debt, and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder.

 

SECTION 12.11.  No Suspension of Remedies.  The failure to make a payment in respect of
the Guarantees by reason of any provision of this Article Twelve shall not
be construed as preventing the occurrence of a Default or an Event of Default
under Section 6.01.

 

Nothing contained in this Article Twelve shall
limit the right of the Trustee or the Holders of Notes to take any action to
accelerate the maturity of the Notes pursuant to Article Six or to pursue
any rights or remedies hereunder or under applicable law, subject to the
rights, if any, under this Article Twelve of the holders, from time to
time, of Guarantor Senior Debt.

 

99

 

SECTION 12.12.  No Fiduciary Duty of Trustee to Holders
of Guarantor Senior Debt.  The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Guarantor
Senior Debt, and it undertakes to perform or observe such of its covenants and
obligations as are specifically set forth in this Article Twelve, and no
implied covenants or obligations with respect to the Guarantor Senior Debt
shall be read into this Indenture against the Trustee.  The Trustee shall not be liable to any such
holders (other than for its willful misconduct or gross negligence) if it shall
pay over or deliver to the holders of Guarantee Obligations or the Guarantors
or any other Person, money or assets in compliance with the terms of this
Indenture.  Nothing in this Section 12.12
shall affect the obligation of any Person other than the Trustee to hold such
payment for the benefit of, and to pay such payment over to, the holders of Guarantor
Senior Debt or their Representative.

 

ARTICLE THIRTEEN

MISCELLANEOUS

 

SECTION 13.01.  TIA Controls.  If any provision of this Indenture limits,
qualifies, or conflicts with another provision which is required to be included
in this Indenture by the TIA, the required provision shall control; provided, however, that this Section 13.01
shall not of itself require that this Indenture or the Trustee be qualified
under the TIA or constitute any admission or acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and
the Trustee are required by the TIA to be so qualified.

 

SECTION 13.02.  Notices.  Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telex, by telecopier, by email or by overnight courier
guaranteeing next-day delivery or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:

 

if to the Company or any Guarantor:

 

KINETIC CONCEPTS, INC.

8023 Vantage Drive

San Antonio, TX 78230

Fax Number:  (210) 255-6998

Attn:  Chief Executive Officer

 

with a copy to:

 

Cox & Smith

112 E. Pecan Street

San Antonio, TX 78205

Fax Number:  (210) 226-8395

Attn:  William J. McDonough, Jr., Esq.

 

if to the Trustee:

 

U.S. Bank National Association

60 Livingston Ave.

St. Paul, Minnesota 55107-2292

 

100

 

Fax Number: 
(651) 495-8097

Attention:  Corporate Trust
Administration - KCI

 

Each of the Company and the Trustee by written notice
to the other may designate additional or different addresses for notices to
such Person.  Any notice or
communication to the Company or the Trustee shall be deemed to have been given
or made as of the date so delivered if hand delivered; when answered back, if
telexed; when receipt is acknowledged, if emailed or faxed; and five (5)
calendar days after mailing if sent by registered or certified mail, postage
prepaid (except that (1) the Trustee shall not be deemed to have knowledge
of such notice nor shall any time period within which the Trustee is required
to act as a result of such notice commence until the Trustee actually receives
the notice in question and (2) a notice of change of address shall not be
deemed to have been given until actually received by the addressee).

 

Any notice or communication mailed to a Holder shall
be mailed by first class mail, certified or registered return receipt
requested, or by overnight courier guaranteeing next-day delivery to its
address as it appears on the registration books of the Registrar.  Any notice or communication shall be mailed
to any Person as described in TIA Section 313(c), to the extent required
by the TIA.

 

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 in this Section 13.02, it is duly
given, whether or not the addressee receives it.

 

SECTION 13.03.  Communications by Holders with Other
Holders.  Holders may communicate
pursuant to TIA Section 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. 
The Company, the Trustee, the Registrar and any other Person shall have
the protection of TIA Section 312(c).

 

SECTION 13.04.  Certificate and Opinion as to Conditions
Precedent.  Upon any request or
application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:

 

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

 

(2)                                  an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent to be performed by the Company, if any, provided for in
this Indenture relating to the proposed action have been complied with (which
counsel, as to factual matters, may rely on an Officers’ Certificate).

 

SECTION 13.05.  Statements Required in Certificate or
Opinion.  Each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture, other than the Officers’ Certificate required by Section 4.06,
shall include:

 

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

 

101

 

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

 

(3)                                  a
statement that, in the opinion of such Person, he has made such examination or
investigation as is reasonably 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 each such Person, such
condition or covenant has been complied with.

 

SECTION 13.06.  Rules by Trustee, Paying Agent, Registrar.  The Trustee may make reasonable rules in
accordance with the Trustee’s customary practices for action by or at a meeting
of Holders.  The Paying Agent or
Registrar may make reasonable rules for its functions.

 

SECTION 13.07.  Legal Holidays.  A “Legal Holiday” used with respect
to a particular place of payment is a Saturday, a Sunday or a day on which
banking institutions in New York, New York or at such place of payment are not
required to be open.  If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.

 

SECTION 13.08.  Governing Law.  THIS INDENTURE, THE NOTES AND THE GUARANTEES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK.  Each of the parties hereto agrees
to submit to the jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to this Indenture.

 

SECTION 13.09.  No Adverse Interpretation of Other
Agreements.  This Indenture may not
be used to interpret another indenture, loan or debt agreement of the Company
or any of its Subsidiaries.  Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

 

SECTION 13.10.  No Personal Liability.  No recourse for the payment of the principal
of, premium, if any, or interest on any of the Notes or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in this Indenture, or in any
of the Notes or because of the creation of any Indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer, director,
employee or controlling person of the Company or of any successor Person
thereof.  Each Holder, by accepting the
Notes, waives and releases all such liability. 
The waiver and release are part of the consideration for the issuance of
the Notes.  Such waiver may not be
effective to waive liabilities under the federal securities laws.

 

SECTION 13.11.  Successors.  All agreements of the Company in this Indenture and the Notes
shall bind their successors.  All
agreements of the Trustee in this Indenture shall bind its successors.

 

102

 

SECTION 13.12.  Duplicate Originals.  All parties may sign any number of copies of
this Indenture.  Each signed copy shall
be an original, but all of them together shall represent the same agreement.

 

SECTION 13.13.  Severability.  In case any one or more of the provisions in
this Indenture or in the Notes shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.

 

SECTION 13.14.  Table of Contents, Headings, Etc..  The Table of Contents, Cross-Reference Table
and headings of the Articles and Section of this Indenture have been inserted
for convenience of reference only, are not considered a part hereof and shall
in no way modify or restrict any of the terms and provisions hereof.

 

*                                         *                                         *                                         *                                         *

 

[signature page follows]

 

103

 

SIGNATURES

 

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

 

 

	
   

  	
  KINETIC CONCEPTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEDCLAIM, INC., as
  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KCI HOLDING COMPANY,
  INC., as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KCI REAL HOLDINGS,
  L.L.C., as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KCI INTERNATIONAL,
  INC., as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

104

 

	
   

  	
  KCI LICENSING, INC., as
  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KCI PROPERTIES LIMITED,
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  KCI USA REAL HOLDINGS, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KCI REAL PROPERTY
  LIMITED, as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  KCI USA REAL HOLDINGS, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KCI USA, INC., as
  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KCI USA REAL HOLDINGS,
  L.L.C., as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

105

 

	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

106

 

EXHIBIT A

 

[FORM OF NOTE]

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW.  BY ITS ACQUISITION HEREOF, EACH HOLDER
ACQUIRING THE NOTE IN CONNECTION WITH THE COMPANY’S INITIAL DISTRIBUTION OF THE
NOTES REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT.  BY ITS
ACQUISITION HEREOF, EACH HOLDER AGREES THAT IT WILL NOT, PRIOR TO THE DATE THAT
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS
THE OWNER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. 
IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER
THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  AS USED HEREIN, THE TERMS “OFFSHORE
TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.

 

A-1

 

CUSIP
No.:[        ]

 

KINETIC CONCEPTS,
INC.

 

73/8%
Senior Subordinated Note Due 2013

 

	
  No.
  [          ]

  	
   

  	
  $[              ]

  

 

KINETIC CONCEPTS, INC., a Texas corporation (the
“Company,” which term includes any successor entities), for value received
promises to pay to
[               ]
or registered assigns the principal sum of [              ]
Dollars on May 15, 2013.

 

Interest Payment Dates:  May 15 and November 15, commencing
[          ].

 

Record Dates:  May 1 and November 1.

 

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

 

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

 

	
   

  	
  KINETIC CONCEPTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Dated: 
  [            ]

  
				

 

A-2

 

Certificate of Authentication

 

This is one of the 73/8% Senior
Subordinated Notes due 2013, referred to in the within-mentioned Indenture.

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Date of Authentication:  [         ]

  
				

 

A-3

 

(REVERSE OF SECURITY)

 

73/8% Senior Subordinated Note
due 2013

 

Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in the Indenture, dated as of
August 11, 2003 (the “Indenture”), and as amended from time to time, by
and among Kinetic Concepts, Inc., a Texas corporation (the “Company”), the
Guarantors named therein and U.S. Bank National Association, as trustee (the
“Trustee”).

 

(1) Interest. 
The Company promises to pay interest on the principal amount of this
Note at the rate per annum shown above. 
Interest on the Notes will accrue from and including the most recent
date on which interest has been paid or, if no interest has been paid, from and
including [           ].  The Company will pay interest semi-annually
in arrears on each Interest Payment Date, commencing
[          ].  Interest will be computed on the basis of a
360-day year of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed.

 

The Company shall pay interest on overdue principal
and on overdue installments of interest from time to time on demand at the rate
borne by the Notes and on overdue installments of interest (without regard to
any applicable grace periods) to the extent lawful.

 

(2) Method of Payment.  The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at
the close of business on the Record Date immediately preceding the Interest
Payment Date even if the Notes are cancelled on registration of transfer or
registration of exchange (including pursuant to an Exchange Offer (as defined
in the Registration Rights Agreement)) after such Record Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments. 
The Company shall pay principal and premium, if any, and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts (“U.S. Legal Tender”).  However, the Company may pay principal and
premium, if any, and interest by check payable in such U.S. Legal Tender.  The Company may deliver any such interest
payment to the Paying Agent or to a Holder at the Holder’s registered address.

 

(3) Paying Agent and Registrar.  Initially, the Trustee will act as Paying
Agent and Registrar.  The Company may
change any Paying Agent, Registrar or co-Registrar without notice to the
Holders.

 

(4) Indenture. 
The Company issued the Notes under the Indenture.  This Note is one of a duly authorized issue
of Notes of the Company designated as its 73/8% Senior
Subordinated Notes due 2013 (the “Initial Notes”).  The Notes include the Initial Notes and the
Exchange Notes, as defined in Paragraph 9 below, issued in exchange for the
Initial Notes pursuant to the Registration Rights Agreement.  The Initial Notes and the Exchange Notes are
treated as a single class of securities under the Indenture.  The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the “TIA”),
as in effect on the date of the Indenture. 
Notwithstanding anything to the contrary herein, the Notes are subject
to all such terms, and Holders of Notes are referred to the Indenture and the
TIA for a statement of such

 

A-4

 

terms.  The Notes are general
obligations of the Company.  Payment on
each Note is guaranteed on a senior subordinated basis by the Guarantors pursuant
to Articles Eleven and Twelve of the Indenture.  Each Holder, by accepting a Note, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time in accordance with its terms.

 

(5) Special Redemption.  Section 4.23 of the Indenture
provides that on the Special Redemption Payment Date, the Company will redeem
all Notes tendered pursuant to the Special Redemption Offer at a price equal to
100% of the principal amount of the Notes, plus accrued interest to the date of
redemption, if the redemption of all of the outstanding Existing Notes is not
consummated on or prior to November 7, 2003.

 

(6) Redemption.  The Notes are redeemable, at the Company’s option, in whole at
any time or in part from time to time, on and after May 15, 2008, upon not
less than 30 nor more than 60 days’ notice, at the following Redemption Prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on May 15 of the years set forth below,
plus, in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2008

  	
   

  	
  103.688

  	
  %

  
	
  2009

  	
   

  	
  102.458

  	
  %

  
	
  2010

  	
   

  	
  101.229

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, at any time prior to May 15, 2008,
the Company may, at its option, redeem the Notes, in whole or in part, from
time to time, upon not less than 30 nor more than 60 days’ notice at a
redemption price equal to the greater of (1) 101% of the principal amount of
the Notes so redeemed, plus accrued and unpaid interest, and (2) the Make-Whole
Premium with respect to the Notes, or the portions thereof, to be redeemed,
plus, to the extent not included in the Make-Whole Premium, accrued and unpaid
interest to the date of redemption.

 

Notwithstanding the foregoing, at any time, or from
time to time, on or prior to May 15, 2006, the Company may, at its option
on one or more occasions use all or a portion of the net cash proceeds of one
or more Equity Offerings to redeem the Notes issued under the Indenture at a
redemption price equal to 107.375% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the date of redemption, provided that at least 65% of the
aggregate principal amount of the Notes originally issued remain outstanding
immediately following any such redemption. 
In order to effect the foregoing redemption with the proceeds of any
Equity Offering, the Company shall make such redemption not more than 90 days after
the consummation of any such Equity Offering.

 

(7) Notice of Redemption.  Notice of redemption will be mailed at least
30 but not more than 60 days, before the Redemption Date (other than with
respect to a Special Redemption) to each Holder of Notes to be redeemed at its
registered address.  Notes in
denominations larger than $1,000 may be redeemed in part.

 

A-5

 

Except as set forth in the Indenture, if monies for
the redemption of the Notes called for redemption shall have been deposited
with the Paying Agent for redemption on such Redemption Date, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, the Notes called for redemption will cease to bear interest from and
after such Redemption Date and the only right of the Holders of such Notes will
be to receive payment of the Redemption Price plus accrued interest, if any.

 

(8) Offers to Purchase.  Sections 4.15 and 4.16 of the
Indenture provide that, after certain Asset Sales and upon the occurrence of a
Change of Control, and subject to further limitations contained therein, the
Company will make an offer to purchase certain amounts of the Notes in
accordance with the procedures set forth in the Indenture.

 

(9) Registration Rights.  Pursuant to the Registration Rights
Agreement among the Company, the Guarantors and the Placement Agents, the
Company and the Guarantors will be obligated to consummate an exchange offer
pursuant to which the Holder of this Note shall have the right to exchange this
Note for the Company’s 73/8% Series B Senior
Subordinated Notes due 2013 (the “Exchange Notes”), which will be
registered under the Securities Act, in like principal amount and having terms
identical in all material respects as the Initial Notes except for restrictions
on transfer.  The Holders of the Initial
Notes shall be entitled to receive certain additional interest payments in the
event such exchange offer is not consummated and upon certain other conditions,
all pursuant to and in accordance with the terms of the Registration Rights
Agreement.

 

(10) Denominations; Transfer; Exchange.  The Notes are in registered form, without
coupons, and in denominations of $1,000 and integral multiples of $1,000.  A Holder shall register the transfer of or
exchange of Notes in accordance with the Indenture.  The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as required by law or as permitted by the Indenture.  The Registrar need not register the transfer of or exchange of
any Notes or portions thereof selected for redemption except for the unredeemed
portion of any Note being redeemed in part.

 

(11) Persons Deemed Owners.  The registered Holder of a Note shall 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 one year, the Trustee and the Paying Agent will pay the money
back to the Company.  After that, all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.

 

(13) Discharge Prior to Redemption or Maturity.  If the Company at any time deposits with the
Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to pay the
principal of and interest on the Notes to redemption or maturity and complies
with the other provisions of the Indenture relating thereto, the Company will
be discharged from certain provisions of the Indenture and the Notes (including
certain covenants, and including, under certain circumstances, their obligation
to pay the principal of and interest on the Notes but without affecting the
rights of the Holders to receive such amounts from such deposits).

 

A-6

 

(14) Amendment; Supplement; Waiver.  Subject to certain exceptions set forth in
the Indenture, the Indenture or the Notes may be amended or supplemented with
the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding, and any past Default or Event
of Default or noncompliance with any provision may be waived with the written
consent of the Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding. 
Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in
addition to or in place of certificated Notes, comply with any requirements of
the Commission in order to effect or maintain the qualification of the
Indenture under the TIA or comply with Article Five of the Indenture or
make any other change that does not adversely affect the rights of any Holder
of a Note in any material respect.

 

(15) Restrictive Covenants.  The Indenture imposes certain limitations on
the ability of the Company and the Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, make certain Investments, create or incur liens,
enter into transactions with Affiliates, create dividend or other payment
restrictions affecting Restricted Subsidiaries, issue Preferred Stock of its
Restricted Subsidiaries, and on the ability of the Company to merge or
consolidate with any other Person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the Company’s and its Restricted
Subsidiaries’ assets or adopt a plan of liquidation.  Such limitations are subject to a number of important
qualifications and exceptions.  Pursuant
to Section 4.06 of the Indenture, the Company must annually report
to the Trustee on compliance with such limitations.

 

(16) Subordination.  The Notes are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full in cash
or Cash Equivalents of all Obligations on Senior Debt of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed.  Each Holder by
its acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on its behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee its attorney-in-fact for such purposes.

 

(17) Successors.  When a successor assumes, in accordance with the Indenture, all
the obligations of its predecessor under the Notes and the Indenture, the
predecessor, subject to certain exceptions, will be released from those
obligations.

 

(18) Defaults and Remedies.  Except as set forth in the Indenture, if an
Event of Default occurs and is continuing, the Trustee or the Holders of not
less than 25% in principal amount of Notes then outstanding may declare all the
Notes to be due and payable in the manner, at the time and with the effect
provided in the Indenture.  Holders of
Notes may not enforce the Indenture or the Notes except as provided in the
Indenture.  The Trustee is not obligated
to enforce the Indenture or the Notes unless it has received indemnity
reasonably satisfactory to it.  The
Indenture permits, subject to certain limitations therein provided, Holders of
a majority in aggregate principal amount of the Notes then outstanding to
direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of
Notes notice of any continuing

 

A-7

 

Default or Event of Default (except a Default in payment of principal
or interest when due, including defaults in payments to be made pursuant to a
Change of Control Offer or Net Proceeds Offer, for any reason or a Default in
compliance with Article Five of the Indenture) if it determines that
withholding notice is in their interest.

 

(19) Trustee Dealings with Company.  The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.

 

(20) No Recourse Against Others.  No partner, director, officer, employee or
stockholder, as such, of the Company or any Guarantor, as such, shall have any
liability for any obligations of the Company or any Guarantor under the Notes,
the Indenture, the Guarantees or the Registration Rights Agreement or for any
claim based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder of Notes by
accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Notes.

 

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

 

(22) Authentication.  This Note shall not be valid until the Trustee or Authenticating
Agent manually signs the certificate of authentication on this Note.

 

(23) Governing Law.  This Note and the Indenture shall be governed by and construed in
accordance with the laws of the State of New York, as applied to contracts made
and performed within the State of New York. 
Each of the parties hereto and the Holders agree to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Note.

 

(24) Abbreviations and Defined Terms.  Customary abbreviations may be used in the
name of a Holder of a Note or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).

 

(25) CUSIP Numbers.  Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Notes as a convenience to the Holders of the
Notes.  No representation is made as to
the accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed hereon.

 

The Company will furnish to any Holder of a Note upon
written request and without charge a copy of the Indenture, which has the text
of this Note.  Requests may be made
to:  KINETIC CONCEPTS, INC., 8023
Vantage Drive, San Antonio, Texas 78230.

 

A-8

 

ASSIGNMENT FORM

 

If you the Holder want to assign this Note, fill in
the form below and have your signature guaranteed:

 

I or we assign and transfer this Note to:

 

 

(Print or type name, address and zip code and

 

 

social security or tax ID number of assignee)

 

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

 

	
  Dated:

  	
   

  	
   

  
	
   

  
	
  Signed:

  	
   

  	
   

  
	
   

  
	
   

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

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
						

 

Signature must be guaranteed by an “eligible guarantor
institution,” that is, a bank, stockbroker, savings and loan association or
credit union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents Medallion
Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.

 

A-9

 

[OPTION OF HOLDER TO ELECT PURCHASE]

 

If you want to elect to have this Note purchased by
the Company pursuant to Section 4.15 or Section 4.16 of
the Indenture, check the appropriate box:

 

Section 4.15  o

 

Section 4.16  o

 

If you want to elect to have only part of this Note
purchased by the Company pursuant to Section 4.15 or Section 4.16
of the Indenture, state the amount you elect to have purchased:

 

$                           

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NOTICE:  The signature on this assignment must
  correspond with the name as it appears upon the face of the within Note in
  every particular without alteration or enlargement or any change whatsoever
  and be guaranteed.

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
						

 

A-10

 

EXHIBIT B

 

CUSIP No.: [    ]

 

KINETIC CONCEPTS,
INC.

 

73/8%
Series B Senior Subordinated Note Due 2013

 

	
  No. [     ]

  	
   

  	
  $[          ]

  

 

KINETIC CONCEPTS, INC., a Texas corporation (the
“Company,” which term includes any successor entities), for value received
promises to pay to
[          ] or registered
assigns the principal sum of [              ]
Dollars on May 15, 2013.

 

Interest Payment Dates:  May 15 and November 15, commencing
[              ].

 

Record Dates:  May 1 and November 1.

 

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

 

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

 

	
   

  	
  KINETIC CONCEPTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Dated: 
  [          ]

  
				

 

B-1

 

Certificate Of
Authentication

 

This is one of the 73/8%
Series B Senior Subordinated Notes due 2013, referred to in the
within-mentioned Indenture.

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
  Date of Authentication:

  

 

B-2

 

(REVERSE OF
SECURITY)

 

73/8  Series B
Senior Subordinated Note due 2013

 

Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in the Indenture, dated as of
August 11, 2003 (the “Indenture”), and as amended from time to time, by
and among Kinetic Concepts, Inc., a Texas corporation (the “Company”), the
Guarantors named therein and U.S. Bank National Association, as trustee (the
“Trustee”).

 

(1) Interest. 
The Company promises to pay interest on the principal amount of this
Note at the rate per annum shown above. 
Interest on the Notes will accrue from and including the most recent
date on which interest has been paid or, if no interest has been paid, from and
including
[            ].  The Company will pay interest semi-annually
in arrears on each Interest Payment Date, commencing
[            ].  Interest will be computed on the basis of a
360-day year of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed.

 

The Company shall pay interest on overdue principal
and on overdue installments of interest from time to time on demand at the rate
borne by the Notes and on overdue installments of interest (without regard to
any applicable grace periods) to the extent lawful.

 

(2) Method of Payment.  The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at
the close of business on the Record Date immediately preceding the Interest
Payment Date even if the Notes are cancelled on registration of transfer or
registration of exchange after such Record Date.  Holders must surrender Notes to a Paying Agent to collect principal
payments.  The Company shall pay
principal and premium, if any, and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts
(“U.S. Legal Tender”).  However,
the Company may pay principal and premium, if any, and interest by check
payable in such U.S. Legal Tender.  The
Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder’s registered address.

 

(3) Paying Agent and Registrar.  Initially, the Trustee will act as Paying
Agent and Registrar.  The Company may
change any Paying Agent, Registrar or Co-Registrar without notice to the
Holders.

 

(4) Indenture. 
The Company issued the Notes under the Indenture.  This Note is one of a duly authorized issue
of Exchange Notes of the Company designated as its 73/8% Senior Subordinated Notes due 2013, Series B
(the “Exchange Notes”).  The Notes
include the 73/8% Senior Subordinated
Notes due 2013, Series A (the “Initial Notes”) and the Exchange Notes, issued in
exchange for the Initial Notes pursuant to the Registration Rights
Agreement.  The Initial Notes and the
Exchange Notes are treated as a single class of securities under the Indenture.  The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the “TIA”),
as in effect on the date of the Indenture. 
Notwithstanding anything to the contrary herein, the Notes are subject
to all such terms, and Holders of Notes are referred to the Indenture and the
TIA for a statement of such terms.  The
Notes are general obligations of the

 

B-3

 

Company.  Payment on each Note is guaranteed on a
senior subordinated basis by the Guarantors pursuant to Articles Eleven and
Twelve of the Indenture.  Each Holder,
by accepting a Note, agrees to be bound by all of the terms and provisions of
the Indenture, as the same may be amended from time to time in accordance with
its terms.

 

(5) Redemption.  The Notes are redeemable, at the Company’s option, in whole at
any time or in part from time to time, on and after May 15, 2008, upon not
less than 30 nor more than 60 days’ notice, at the following Redemption Prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on May 15 of the years set forth below,
plus, in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  103.688

  	
  %

  
	
  2009

  	
   

  	
  102.458

  	
  %

  
	
  20010

  	
   

  	
  101.229

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, at any time prior to May 15, 2008,
the Company may, at its option, redeem the Notes, in whole or in part, from
time to time, upon not less than 30 nor more than 60 days’ notice at a
redemption price equal to the greater of (1) 101% of the principal amount of
the Notes so redeemed, plus accrued and unpaid interest, and (2) the Make-Whole
Premium with respect to the Notes, or the portions thereof, to be redeemed,
plus, to the extent not included in the Make-Whole Premium, accrued and unpaid
interest to the date of redemption.

 

Notwithstanding the foregoing, at any time, or from
time to time, on or prior to May 15, 2006, the Company may, at its option
on one or more occasions use all or a portion of the net cash proceeds of one
or more Equity Offerings to redeem the Notes issued under the Indenture at a
redemption price equal to 107.375% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the date of redemption,
provided, that at least 65% of the aggregate principal amount of the Notes
originally issued remain outstanding immediately following any such
redemption.  In order to effect the
foregoing redemption with the proceeds of any Equity Offering, the Company
shall make such redemption not more than 90 days after the consummation of any
such Equity Offering.

 

(6) Notice of Redemption.  Notice of redemption will be mailed at least
30 but not more than 60 days before the Redemption Date to each Holder of Notes
to be redeemed at its registered address. 
Notes in denominations larger than $1,000 may be redeemed in part.

 

Except as set forth in the Indenture, if monies for
the redemption of the Notes called for redemption shall have been deposited
with the Paying Agent for redemption on such Redemption Date, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, the Notes called for redemption will cease to bear interest from and after
such Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued interest, if any.

 

B-4

 

(7) Offers to Purchase.  Sections 4.15 and 4.16 of the
Indenture provide that, after certain Asset Sales and upon the occurrence of a
Change of Control, and subject to further limitations contained therein, the
Company will make an offer to purchase certain amounts of the Notes in
accordance with the procedures set forth in the Indenture.

 

(8) Denominations; Transfer; Exchange.  The Notes are in registered form, without
coupons, and in denominations of $1,000 and integral multiples of $1,000.  A Holder shall register the transfer of or
exchange of Notes in accordance with the Indenture.  The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as required by law or as permitted by the Indenture.  The Registrar need not register the transfer of or exchange of
any Notes or portions thereof selected for redemption, except for the
unredeemed portion of any Note being redeemed in part.

 

(9) Persons Deemed Owners.  The registered Holder of a Note shall be
treated as the owner of it for all purposes.

 

(10) Unclaimed Money.  If money for the payment of principal or interest remains
unclaimed for one year, the Trustee and the Paying Agent will pay the money
back to the Company.  After that, all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.

 

(11) Discharge Prior to Redemption or Maturity.  If the Company at any time deposits with the
Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to pay the
principal of and interest on the Notes to redemption or maturity and complies
with the other provisions of the Indenture relating thereto, the Company will
be discharged from certain provisions of the Indenture and the Notes (including
certain covenants, and including, under certain circumstances, their obligation
to pay the principal of and interest on the Notes and without affecting the
rights of the Holders to receive such amounts from such deposit).

 

(12) Amendment; Supplement; Waiver.  Subject to certain exceptions set forth in
the Indenture, the Indenture or the Notes may be amended or supplemented with
the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding, and any past Default or Event
of Default or noncompliance with any provision may be waived with the written
consent of the Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding. 
Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes in
addition to or in place of certificated Notes, comply with any requirements of
the Commission in order to effect or maintain the qualification of the
Indenture under the TIA or comply with Article V of the Indenture or make
any other change that does not adversely affect the rights of any Holder of a
Note in any material respect.

 

(13) Restrictive Covenants.  The Indenture imposes certain limitations on
the ability of the Company and the Restricted Subsidiaries to, among other
things, incur additional Debt, make payments in respect of its Capital Stock or
certain Debt, make certain Investments, create or incur liens, enter into
transactions with Affiliates, create dividend or other payment

 

B-5

 

restrictions affecting Restricted Subsidiaries, issue Preferred Stock
of its Restricted Subsidiaries, and on the ability of the Company to merge or
consolidate with any other Person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the Company’s and its
Restricted Subsidiaries’ assets or adopt a plan of liquidation.  Such limitations are subject to a number of
important qualifications and exceptions. 
Pursuant to Section 4.06 of the Indenture, the Company must
annually report to the Trustee on compliance with such limitations.

 

(14) Subordination.  The Notes are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full in cash
or Cash Equivalents of all Obligations on Senior Debt of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed.  Each Holder by
its acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on its behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee its attorney-in-fact for such purposes.

 

(15) Successors.  When a successor assumes, in accordance with the Indenture, all
the obligations of its predecessor under the Notes and the Indenture, the
predecessor, subject to certain exceptions, will be released from those
obligations.

 

(16) Defaults and Remedies.  Except as set forth in the Indenture, if an
Event of Default occurs and is continuing, the Trustee or the Holders of not
less than 25% in principal amount of Notes then outstanding may declare all the
Notes to be due and payable in the manner, at the time and with the effect
provided in the Indenture.  Holders of
Notes may not enforce the Indenture or the Notes except as provided in the
Indenture.  The Trustee is not obligated
to enforce the Indenture or the Notes unless it has received indemnity
reasonably satisfactory to it.  The
Indenture permits, subject to certain limitations therein provided, Holders of
a majority in aggregate principal amount of the Notes then outstanding to
direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of
Notes notice of any continuing Default or Event of Default (except a Default in
payment of principal or interest when due, including defaults in payments to be
made pursuant to a Change of Control Offer or Net Proceeds Offer, for any
reason or a Default in compliance with Article Five of the Indenture) if
it determines that withholding notice is in their interest.

 

(17) Trustee Dealings with Company.  The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.

 

(18) No Recourse Against Others.  No partner, director, officer, employee or
stockholder, as such, of the Company or any Guarantor, as such, shall have any
liability for any obligations of the Company or any Guarantor under the Notes,
the Indenture, the Guarantees or the Registration Rights Agreement or for any
claim based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder of Notes by
accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Notes.

 

(19) Guarantees.  This Note will be entitled to the benefits of certain Guarantees,
if any, made for the benefit of the Holders. 
Reference is hereby made to the Indenture for a

 

B-6

 

statement of the
respective rights, limitations of rights, duties and obligations thereunder of
the Guarantors, the Trustee and the Holders.

 

(20) Authentication.  This Note shall not be valid until the Trustee or Authenticating
Agent manually signs the certificate of authentication on this Note.

 

(21) Governing Law.  This Note and the Indenture shall be governed by and construed in
accordance with the laws of the State of New York, as applied to contracts made
and performed within the State of New York. 
Each of the parties hereto and the Holders agree to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Note.

 

(22) Abbreviations and Defined Terms.  Customary abbreviations may be used in the
name of a Holder of a Note or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).

 

(23) CUSIP Numbers.  Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Notes as a convenience to the Holders of the
Notes.  No representation is made as to
the accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed hereon.

 

The Company will furnish to any Holder of a Note upon
written request and without charge a copy of the Indenture, which has the text
of this Note.  Requests may be made
to:  KINETIC CONCEPTS, INC., 8023
Vantage Drive, San Antonio, Texas 78230.

 

B-7

 

ASSIGNMENT FORM

 

If you the Holder want to assign this Note, fill in
the form below and have your signature guaranteed:

 

I or we assign and transfer this Note to:

 

 

 

(Print or type name,
address and zip code and social security or tax ID number of assignee)

 

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

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
								

 

Signature must be guaranteed by an “eligible guarantor
institution,” that is, a bank, stockbroker, savings and loan association or
credit union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agent Medallion
Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.

 

B-8

 

[OPTION OF HOLDER
TO ELECT PURCHASE]

 

If you want to elect to have this Note purchased by
the Company pursuant to Section 4.15 or Section 4.16 of
the Indenture, check the appropriate box:

 

Section 4.15  o

 

Section 4.16  o

 

If you want to elect to have only part of this Note
purchased by the Company pursuant to Section 4.15 or Section 4.16
of the Indenture, state the amount you elect to have purchased:

 

$                         

 

	
  Dated:

  	
   

  	
   

  
	
   

  
	
   

  	
  NOTICE: The signature on this assignment must
  correspond with the name as it appears upon the face of the within Note in
  every particular without alteration or enlargement or any change whatsoever
  and be guaranteed.

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
						

 

B-9

 

EXHIBIT C

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY
SUCH NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH
SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITORY.  UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), 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 HEREON 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 CEDE & CO.  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 SECTION
2.17 OF THE INDENTURE.

 

C-1

 

[EXHIBIT D]

 

Form of
Certificate to Be Delivered in

Connection with Transfers to Non-QIB Accredited Investors

 

       ,       

 

U.S. Bank National Association, as Registrar

60 Livingston Ave.,

St. Paul Minnesota 55107-2292

 

Attn.: 
Corporate Trust Department - KCI

 

Ladies and Gentlemen:

 

In connection with our proposed purchase of 73/8% Senior Subordinated Notes due 2013 (the
“Notes”) of KINETIC CONCEPTS, INC. (the “Company”), we confirm that:

 

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

 

2. We understand that the offer and sale of the Notes
have not been registered under the Securities Act or any other applicable
securities law, and that the Notes may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except as
permitted in the following sentence.  We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell any Notes, we will do so only
(i) to the Company or any subsidiary thereof, (ii) inside the United
States in accordance with Rule 144A under the Securities Act to a person who we
reasonably believe is a “qualified institutional buyer” (as defined in Rule
144A promulgated under the Securities Act), (iii) inside the United States
to an institutional “accredited investor” (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to the Trustee (as defined in the Indenture) a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of the Notes (the form of which letter can be obtained from the
Trustee), (iv) outside the United States in accordance with Rule 904 of
Regulation S promulgated under the Securities Act, (v) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available), or (vi) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person purchasing
any of the Notes from us a notice advising such purchaser that resales of the
Notes are restricted as stated herein.

 

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

 

D-1

 

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

 

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

 

6. We acknowledge that we have had access to such
financial and other information, have been afforded the opportunity to ask such
questions of representatives of the Company and receive answers thereto as we
deem necessary in connection with our decision to purchase the Notes and we
have reviewed the “Transfer Restrictions” section from the Company’s Final
Offering Memorandum dated July 23, 2003.

 

You, the Company, the Trustee, the Initial Purchasers
and others are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

D-2

 

EXHIBIT E

 

Form of
Certificate to be Delivered in

Connection with Transfers Pursuant to Regulation S

 

          
  ,     

 

U.S. Bank National Association, as Registrar

60 Livingston Ave.,

St. Paul Minnesota 55107-2292

 

Attn: 
Corporate Trust Department - KCI

 

Re:  KINETIC
CONCEPTS, INC. (the “Company”)

73/8% Senior Subordinated Notes due 2013 (the “Notes”)

 

Ladies and Gentlemen:

 

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

 

(1) the offer of the Notes was not made to a person in
the United States;(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States,
or (b) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither we nor any person acting on
our behalf knows that the transaction has been prearranged with a buyer in the
United States;

 

(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable;

 

(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act; and

 

(5) we have advised the transferee of the transfer
restrictions applicable to the Notes.

 

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

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  

 

E-1

 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  

 

E-2

 

EXHIBIT F

 

GUARANTEE

 

For value received, the undersigned hereby
unconditionally guarantees, as principal obligor and not only as a surety, to
the Holder of this Note the cash payments in United States dollars of principal
of, premium, if any, and interest on this Note (and including Additional
Interest payable thereon) in the amounts and at the times when due and interest
on the overdue principal, premium, if any, and interest, if any, of this Note,
if lawful, and the payment or performance of all other obligations of the
Company under the Indenture or the Notes, to the Holder of this Note and the
Trustee, all in accordance with and subject to the terms and limitations of
this Note, Articles Eleven and Twelve of the Indenture and this Guarantee. This
Guarantee will become effective in accordance with Article Eleven of the
Indenture and its terms shall be evidenced therein. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is
not affixed to any particular Note.

 

Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Indenture dated as of August 11,
2003, among Kinetic Concepts, Inc., a Texas corporation, the Guarantors named
therein and U.S. Bank National Association, as trustee (the “Trustee”), as
amended or supplemented (the “Indenture”).

 

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

 

THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.  Each Guarantor hereby agrees to submit to the jurisdiction of the
courts of the State of New York in any action or proceeding arising out of or
relating to this Guarantee.

 

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

 

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

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  [NAME OF GUARANTOR], as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

F-1

 

EXHIBIT G

 

Certificate to be
Delivered Upon Exchange

or Registration of Transfer of Securities

 

Re:  73/8% Senior Notes due 2013, and 73/8% Series B Senior Notes due 2013 (the “Notes”),
of Kinetic Concepts, Inc.

 

This Certificate relates to
$             
principal amount of Notes held in the form of
*              
a beneficial interest in a Global Note or
*              
Physical Notes by
                
(the “Transferor”).

 

The Transferor:*

 

o
has requested by written order that the Registrar deliver in exchange for its
beneficial interest in the Global Note held by the Depositary a Physical Note
or Physical Notes in definitive, registered form of authorized denominations
and an aggregate number equal to its beneficial interest in such Global Note
(or the portion thereof indicated above); or

 

o
has requested by written order that the Registrar exchange or register the
transfer of a Physical Note or Physical Notes.

 

In connection with such request and in respect of each
such Note, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above-captioned Notes and the restrictions
on transfers thereof as provided in Section 2.17 of such Indenture,
and that the transfer of this Note does not require registration under the
Securities Act of 1933, as amended (the “Act”), because*:

 

o
Such Note is being acquired for the Transferor’s own account, without transfer
(in satisfaction of [Section 2.17(a)(II)(A)] or [Section 2.17(d)(i)(A)]
of the Indenture).

 

o
Such Note is being transferred to a “qualified institutional buyer” (as defined
in Rule 144A under the Act), in reliance on Rule 144A.

 

o
Such Note is being transferred to an institutional “accredited investor”
(within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under
the Act).

 

o
Such Note is being transferred in reliance on Regulation S under the Act.

 

o
Such Note is being transferred in reliance on Rule 144 under the Act.

 

Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the Act
other than Rule 144A or Rule 144 or Regulation S under the Act to a person
other than an institutional “accredited investor.”

 

	
   

  	
   

  
	
   

  	
  [INSERT NAME OF TRANSFEROR]

  

 

G-1

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  [Authorized Signatory]

  
	
   

  
	
   

  
	
  Date:

  
				

 

o            *Check applicable box.

 

G-2

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