Document:

bluebirdsb2ex10-1.htm

    
      

      

    

    
       

      OPTION
        TO PURCHASE AGREEMENT

       

      THIS
        AGREEMENT made as of the 4th day of August,
        2006.

       

      BETWEEN:

       

      PETER
        LAWRENCE WELLS, businessman, 209-3608 Deercrest Drive, North
        Vancouver, British Columbia, Canada V7G 2S8 (hereinafter referred to as the
        "Vendor")

       

      PARTIES
        OF THE FIRST PART

       

      AND:

       

      BLUEBIRD
        EXPLORATION COMPANY., a company duly incorporated
        under the laws of the State of Delaware, having an office at 209-3608 Deercrest
        Drive, North Vancouver, British Columbia, Canada V7G 2S8. (hereinafter referred
        to as "BEC")

       

      OF
        THE SECOND PART

       

      WHEREAS:

       

      
        	
                A.

              	
                Vendor
                  is the sole beneficial owner of 100% of the mineral claims 512465
                  and
                  512466 The
                  properties are located 9 Kilometers due South of Nelson, in the
                  Nelson
                  Mining Division.  The properties are adjacent to Apex Creek
                  across the summit of Evening Ridge to Highway 6 between Nelson
                  and Salmo
                  British Columbia, Canada as described in Schedule "A" attached
                  hereto and
                  forming part hereof (hereinafter together with any form of successor
                  or
                  substitute mineral tenure called the
                  "Claim").

              

      

      
        	
                 

              	
                 

              

      

      
        	
                B.

              	
                The
                  parties now wish to enter into an agreement granting to BEC the
                  exclusive
                  right and option to acquire an undivided 100% of the right, title
                  and
                  interest in and to the Claim on the terms and conditions as hereinafter
                  set forth.

              

      

       

      NOW
        THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
        premises and the mutual promises, covenants and agreements herein contained,
        the
        parties hereto agree as follows:

       

      
        	
                1.

              	
                INTERPRETATION

              

      

      
        	
                 

              	
                 

              

      

      
        	
                1.1

              	
                In
                  this Agreement:

              

      

      
        	
                 

              	
                 

              

      

      
        	
                 

              	
                (a)

              	
                "Effective
                  Date" means the date that both parties have signed this
                  Agreement;

              

      

      

      
        	
                 

              	
                (b)

              	
                "Mineral
                  Products" means the products derived from operating the Claim as
                  a
                  mine;

              

      

      

      
        	
                 

              	
                (c)

              	
                "Net
                  Smelter Returns" means the proceeds received by BEC from any smelter
                  or
                  other purchaser from the sale of any ores, concentrates or minerals
                  produced from the Claim after deducting from such proceeds the
                  following
                  charges only to the extent that they are not deducted by the smelter
                  or
                  other purchaser in computing the
                  proceeds:

              

      

      
        	
                 

              	
                 

              

      

      
        	
                 

              	
                (i)

              	
                the
                  cost of transportation of the ores, concentrates or minerals from
                  the
                  Claim to such smelter or other purchaser, including related
                  transport;

              

      

      

      
        	
                 

              	
                (ii)

              	
                smelting
                  and refining charges including penalties;
                  and

              

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      -
        2 -

       

      
        	
                 

              	
                (iii)

              	
                marketing
                  costs.

              

      

      

      
        	
                 

              	
                (d)

              	
                "Option"
                  means the option granted by Vendor to BEC pursuant to Section
                  3;

              

      

      

      
        	
                 

              	
                (e)

              	
                "Operating
                  the Claim as a mine" or "Operation of the Claim as a mine" means
                  any or
                  all of the mining, milling, smelting, refining or other recovery
                  of ores,
                  minerals, metals or concentrates or values thereof, derived from
                  the
                  Claim;

              

      

      

      
        	
                 

              	
                (f)

              	
                "Dollars
                  ($)" means legal currency of
                  Canada.

              

      

      

      
        	
                2.

              	
                REPRESENTATIONS
                  AND WARRANTIES

              

      

      
        	
                 

              	
                 

              

      

      
        	
                2.1

              	
                BEC
                  represents and warrants to Vendor
                  that:

              

      

       

      
        	
                 

              	
                (a)

              	
                BEC
                  is a body corporate duly incorporated, organized and validly subsisting
                  under the laws of its incorporating
                  jurisdiction;

              

      

      
        	
                 

              	
                 

              

      

      
        	
                 

              	
                (b)

              	
                BEC
                  has full power and authority to carry on its business and to enter
                  into
                  this Agreement and any agreement or instrument referred to or contemplated
                  by this Agreement;

              

      

      
        	
                 

              	
                 

              

      

      
        	
                 

              	
                (c)

              	
                neither
                  the execution and delivery of this Agreement nor any of the agreements
                  referred to herein or contemplated hereby, nor the consummation
                  of the
                  transactions hereby contemplated will conflict with, result in
                  the breach
                  of or accelerate the performance required by any agreement to which
                  BEC is
                  a party; and

              

      

      

      
        	
                 

              	
                (d)

              	
                the
                  execution and delivery of this Agreement and the agreements contemplated
                  hereby will not violate or result in the breach of laws of any
                  jurisdiction applicable or pertaining thereto or of BEC's constating
                  documents.

              

      

       

      
        	
                2.2

              	
                Vendor
                  represents and warrants to BEC:

              

      

       

      
        	
                 

              	
                (a)

              	
                the
                  Claim consists of the mineral claims 512465 and 512466 The properties
                  are
                  located 9 Kilometers due South of Nelson, in the Nelson Mining
                  Division
                  which has been duly and validly staked and recorded, as accurately
                  described in Schedule "A", is presently in good standing under
                  the laws of
                  the jurisdiction in which it is located and, except as set forth
                  herein,
                  is free and clear of all liens, charges and
                  encumbrances;

              

      

      
        	
                 

              	
                 

              

      

      
        	
                 

              	
                (b)

              	
                Vendor
                  is the sole beneficial owner of a 100% interest in and to the Claim
                  and
                  has the exclusive right to enter into this Agreement and all necessary
                  authority to dispose of an undivided 100% interest in and to the
                  Claim in
                  accordance with the terms of this
                  Agreement;

              

      

      
        	
                 

              	
                 

              

      

      
        	
                 

              	
                (c)

              	
                no
                  person, firm or corporation has any proprietary or possessory interest
                  in
                  the Claim other than Vendor and no person is entitled to any royalty
                  or
                  other payment in the nature of rent or royalty on any minerals,
                  ores,
                  metals or concentrates or any other such products removed from
                  the
                  Claim;

              

      

       

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      -
        3 -

       

      
        	
                 

              	
                (d)

              	
                neither
                  the execution and delivery of this Agreement nor any of the agreements
                  referred to herein or contemplated hereby, nor the consummation
                  of the
                  transactions hereby contemplated will conflict with, result in
                  the breach
                  of or accelerate the performance required by any agreement to which
                  Vendor
                  is a party or by which he is bound;

              

      

      
        	
                 

              	
                 

              

      

      
        	
                 

              	
                (e)

              	
                the
                  execution and delivery of this Agreement and the agreements contemplated
                  hereby will not violate or result in the breach of the laws of
                  any
                  jurisdiction applicable or pertaining
                  thereto.

              

      

      
        	
                 

              	
                 

              

      

      

      
        	
                2.3

              	
                The
                  representations and warranties hereinbefore set out are conditions
                  on
                  which the parties have relied in entering into this Agreement and
                  will
                  survive the acquisition of any interest in the Claim by BEC and
                  each party
                  will indemnify and save the other party harmless from all loss,
                  damage,
                  costs, actions and suits arising out of or in connection with any
                  breach
                  or any representation, warranty, covenant, agreement or condition
                  made by
                  the other party and contained in this
                  Agreement.

              

      

      

      
        	
                3.

              	
                OPTION

              

      

      

      
        	
                3.1

              	
                Vendor
                  hereby gives and grants to BEC the sole and exclusive right and
                  option to
                  acquire an undivided 100% of the right, title and interest of Vendor
                  in
                  and to the Claim, subject only to Vendor receiving the annual payments
                  in
                  accordance with the terms of this Agreement for and in consideration
                  of
                  the following:

              

      

      

      
        	
                 

              	
                (a)

              	
                BEC,
                  or its permitted assigns, incurring exploration expenditures on
                  the Claims
                  of a minimum of $7,000 on or before September 30, 2007;
                  and

              

      

      

      
        	
                 

              	
                (b)

              	
                BEC,
                  or its permitted assigns, incurring exploration expenditures on
                  the Claims
                  of a further $25,000 (for aggregate minimum exploration expenses
                  of
                  $32,000) on or before September 30, 2008;
                  and

              

      

      

      
        	
                3.2

              	
                Upon
                  exercise of the Option, BEC agrees to pay Vendor, commencing January
                  1,
                  2009, the sum of $25,000 per annum for so long as BEC, or its permitted
                  assigns, holds any interest in the Claims. Failure to make any
                  such annual
                  payment shall result in termination of this Agreement in accordance
                  with
                  Section 5.1.

              

      

      

      
        	
                4.

              	
                RIGHT
                  OF ENTRY

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      -
        4 -

       

      
        	
                4.1

              	
                Until
                  such time as the Option has been exercised, BEC, its employees,
                  agents and
                  independent contractors, will have the sole and exclusive right
                  and option
                  to:

              

      

      

      
        	
                 

              	
                (a)

              	
                enter
                  upon the Claims;

              

      

      

      
        	
                 

              	
                (b)

              	
                have
                  exclusive and quiet possession
                  thereof;

              

      

      

      
        	
                 

              	
                (c)

              	
                do
                  such prospecting, exploration, development or other mining work
                  thereon
                  and thereunder as BEC in its sole discretion may consider advisable;
                  and

              

      

      

      
        	
              	
                (d)

              	
                bring
                  and erect upon the Claims such facilities as BEC may consider
                  advisable.

              

      

      

      
        	
                5.

              	
                TERMINATION

              

      

      

      
        	
                5.1

              	
                Subject
                  to Section 8, this Agreement and the Option will
                  terminate:

              

      

      

      
        	
                 

              	
                (a)

              	
                on
                  September 30, 2007 at 11:59 P.M., unless on or before that date,
                  BEC has
                  incurred exploration expenditures of a minimum of $7,000 on the
                  Claims;

              

      

      

      
        	
                 

              	
                (b)

              	
                on
                  September 30, 2008 at 11:59 P.M., unless BEC has incurred a further
                  $25,000 of exploration expenditures on the Claims (for an aggregate
                  of
                  $32,000); or

              

      

      

      
        	
                 

              	
                (c)

              	
                at
                  11:59 P.M. on January 1 of each and every year, commencing on January
                  1,
                  2009, unless BEC or its successor or assign has paid to Vendor
                  the sum of
                  $25,000 on or before that date.

              

      

      

      
        	
                6.

              	
                COVENANTS
                  OF VENDOR

              

      

      

      
        	
                6.1

              	
                Vendor
                  will:

              

      

      

      
        	
                 

              	
                (a)

              	
                not
                  do any act or thing which would or might in any way adversely affect
                  the
                  rights of BEC hereunder;

              

      

      

      
        	
                 

              	
                (b)

              	
                make
                  available to BEC and its representatives all records and files
                  in the
                  possession of Vendor relating to the Claims and permit BEC and
                  its
                  representatives at its own expense to take abstracts therefrom
                  and make
                  copies thereof; and

              

      

      

      
        	
                 

              	
                (c)

              	
                promptly
                  provide BEC with any and all notices and correspondence from government
                  agencies in respect of the Claims.

              

      

      
        	
                 

              	
                 

              

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      -
        5 -

       

      
        	
                7.

              	
                COVENANTS
                  OF BEC

              

      

      

      
        	
                7.1

              	
                BEC
                  will:

              

      

      

      
        	
                 

              	
                (a)

              	
                keep
                  the Claims free and clear of all liens, charges and encumbrances
                  arising
                  from their operations hereunder and in good standing by the doing
                  and
                  filing of all necessary work and by the doing of all other acts
                  and things
                  and making all other payments which may be necessary in that
                  regard;

              

      

      

      
        	
                 

              	
                (b)

              	
                permit
                  Vendor, or its representatives duly authorized by it in writing,
                  at their
                  own risk and expense, access to the Claims at all reasonable times
                  and to
                  all records prepared by BEC in connection with work done on or
                  with
                  respect to the Claims;

              

      

      

      
        	
                 

              	
                (c)

              	
                conduct
                  all work on or with respect to the Claims in a careful and miner-like
                  manner and in compliance with all applicable Federal, Provincial
                  and local
                  laws, rules, orders and regulations, and indemnify and save Vendor
                  harmless from any and all Claims, suits, actions made or brought
                  against
                  it as a result of work done by BEC on or with respect to the Claims;
                  and

              

      

      

      
        	
                 

              	
                (d)

              	
                obtain
                  and maintain, or cause any contractor engaged hereunder to obtain
                  and
                  maintain, during any period in which active work is carried out
                  hereunder,
                  adequate insurance.

              

      

      

      
        	
                8.

              	
                EXERCISE
                  OF OPTION

              

      

      

      
        	
                8.1

              	
                Once
                  BEC has incurred the exploration expenditures, and made the payments
                  set
                  out in Section 3.1, BEC will, subject to the right of Vendor to
                  receive
                  the obligation of BEC to make the annual payments set out in Section
                  3.2,
                  own an undivided 100% of Vendor's right, title, and interest in
                  and to the
                  Claims.

              

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      -
        6 -

       

      

      
        	
                9.

              	
                OBLIGATIONS
                  OF BEC AFTER TERMINATION

              

      

      

      
        	
                9.1

              	
                In
                  the event of the termination of the Option, BEC
                  will:

              

      

      

      
        	
                 

              	
                (a)

              	
                leave
                  the Claims in good standing for a minimum of one (1) year under
                  all
                  applicable legislation, free and clear of all liens, charges and
                  encumbrances arising from this Agreement or their operations hereunder
                  and
                  in a safe and orderly condition;

              

      

      

      
        	
                 

              	
                (b)

              	
                deliver
                  to Vendor within 60 days of its written request a comprehensive
                  report on
                  all work carried out by BEC on the Claims (limited to factual matter
                  only)
                  together with copies of all maps, drill logs, assay results and
                  other
                  technical data compiled by BEC with respect to the
                  Claims;

              

      

      

      
        	
                 

              	
                (c)

              	
                have
                  the right, and obligation on demand made by Vendor, to remove from
                  the
                  Claims within six (6) months of the effective date of termination
                  all
                  facilities erected, installed or brought upon the Claims by or
                  at the
                  instance of BEC provided that at the option of Vendor, any or all
                  of
                  facilities not so removed will become the property of Vendor;
                  and

              

      

      

      
        	
                 

              	
                (d)

              	
                deliver
                  to Vendor a duly executed transfer in registrable form of an undivided
                  100% right, title and interest in and to the Claims in favour of
                  Vendor,
                  or its nominee.

              

      

      

      
        	
                10.

              	
                TRANSFER
                  OF TITLE

              

      

      

      
        	
                10.1

              	
                Upon
                  the request of BEC, Vendor will deliver to BEC a duly executed
                  transfer in
                  registrable form of an undivided 100% of Vendor's right, title
                  and
                  interest in and to the Claims in favour of BEC which BEC will be
                  entitled
                  to register against title to the Claims provided that transfer
                  of legal
                  title to the Claims as set forth in this Subsection 10.1 is for
                  administrative convenience only and beneficial ownership of an
                  undivided
                  100% interest in the Claims will pass to BEC only in accordance
                  with the
                  terms and conditions of this
                  Agreement.

              

      

      

      
        	
                11.

              	
                REGISTRATION
                  OF AGREEMENT

              

      

      

      
        	
                12.1

              	
                Notwithstanding
                  Section 10 of this Agreement, BEC or Vendor will have the right
                  at any
                  time to register this Agreement or a Memorandum thereof against
                  title to
                  the Claims.

              

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      -
        7 -

       

      
        	
                12.

              	
                DISPOSITION
                  OF CLAIMS

              

      

      

      
        	
                12.1

              	
                BEC
                  may at any time sell, transfer or otherwise dispose of all or any
                  portion
                  of its interest in and to the Claims and this Agreement provided
                  that, at
                  any time, BEC has first obtained the consent in writing of Vendor,
                  such
                  consent not to be unreasonably withheld and further provided that,
                  at any
                  time during the currency of this Agreement, any purchaser, grantee
                  or
                  transferee of any such interest will have first delivered to Vendor
                  its
                  agreement related to this Agreement and to the Claims,
                  containing:

              

      

      

      
        	
                 

              	
                (a)

              	
                a
                  covenant with Vendor by such transferee to perform all the obligations
                  of
                  BEC to be performed under this Agreement in respect of the interest
                  to be
                  acquired by it from BEC, and

              

      

      

      
        	
                 

              	
                (b)

              	
                a
                  provision subjecting any further sale, transfer or other disposition
                  of
                  such interest in the Claims and this Agreement or any portion thereof
                  to
                  the restrictions contained in this Subsection
                  12.1.

              

      

      

      
        	
                12.2

              	
                The
                  provisions or Subsection 13.1 of this Agreement will not prevent
                  either
                  party from entering into an amalgamation or corporate reorganization
                  which
                  will have the effect in law of the amalgamated or surviving company
                  possessing all the property, rights and interests and being subject
                  to all
                  the debts, liabilities and obligations of each amalgamating or
                  predecessor
                  company.

              

      

      

      
        	
                13.

              	
                ABANDONMENT
                  OF PROPERTY

              

      

      

      
        	
                13.l

              	
                BEC
                  shall have the unfettered right at any time after the exercise
                  of the
                  Option to abandon all or any part of its interest in the Claims
                  by
                  delivering a notice in writing of their intention to do so to Vendor,
                  such
                  notice to list the part or parts of the Claims to be abandoned,
                  and if
                  within 30 days of receipt of such notice Vendor delivers to BEC
                  a notice
                  ("Reacquisition Notice") stating its intention to reacquire all
                  or part or
                  parts of the Claims, BEC will deliver to Vendor duly executed recordable
                  transfers of its interest in such part or parts of the Claims as
                  Vendor
                  has set forth in the Reacquisition Notice, such part or parts to
                  be in
                  good standing for at least one year beyond the date of delivery
                  of such
                  transfers and to be free and clear of all liens, charges, and encumbrances
                  arising from the operations of BEC or its agents or subcontractors
                  hereunder.

              

      

      

      
        	
                14.

              	
                CONFIDENTIAL
                  NATURE OF INFORMATION

              

      

      

      
        	
                15.1

              	
                The
                  parties agree that all information obtained from the work carried
                  out
                  hereunder and under the operation of this Agreement will be the
                  exclusive
                  property of the parties and will not be used other than for the
                  activities
                  contemplated hereunder except as required by law or by the rules
                  and
                  regulations of any regulatory authority having jurisdiction, or
                  with the
                  written consent of both parties, such consent not to be unreasonably
                  withheld. Notwithstanding the foregoing, it is understood and agreed
                  that
                  a party will not be liable to the other party for the fraudulent
                  or
                  negligent disclosure of information by any of its employees, servants
                  or
                  agents, provided that such party has taken reasonable steps to
                  ensure the
                  preservation of the confidential nature of such
                  information.

              

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      -
        8 -

       

      
        	
                16.

              	
                FURTHER
                  ASSURANCES

              

      

      

      
        	
                16.1

              	
                The
                  parties hereto agree that they and each of them will execute all
                  documents
                  and do all acts and things within their respective powers to carry
                  out and
                  implement the provisions or intent of this
                  Agreement.

              

      

      

      
        	
                17.

              	
                NOTICE

              

      

      

      
        	
                17.1

              	
                Any
                  notice, direction or other instrument required or permitted to
                  be given
                  under this Agreement will be in writing and will be given by the
                  delivery
                  or the same or by mailing the same by prepaid registered or certified
                  mail
                  in each case addressed as follows:

              

      

      

      
        	
                 

              	
                (a)

              	
                if
                  to Vendor

              

      

      209-3608
        Deercrest Drive

      North
        Vancouver, British Columbia, Canada V7G 2S8

      Attention
        : Peter Lawrence Wells

      

      
        	
                 

              	
                (b)

              	
                if
                  to Bluebird Exploration
                  Company

              

      

      209-3608
        Deercrest Drive

      North
        Vancouver, British Columbia, Canada V7G 2S8

      

       

      
        	
                l7.2

              	
                Any
                  notice, direction or other instrument aforesaid will, if delivered,
                  be
                  deemed to have been given and received on the day it was delivered,
                  and if
                  mailed, be deemed to have been given and received on the fifth
                  business
                  day following the day of mailing, except in the event of disruption
                  of the
                  postal services in which event notice will be deemed to be received
                  only
                  when actually received.

              

      

      

      
        	
                17.3

              	
                Any
                  party may at any time give to the other notice in writing of any
                  change of
                  address of the party giving such notice and from and after the
                  giving of
                  such notice, the address or addresses therein specified will be
                  deemed to
                  be the address of such party for the purpose of giving notice
                  hereunder.

              

      

      

      
        	
                18.

              	
                HEADINGS

              

      

      

      
        	
                18.1

              	
                The
                  headings to the respective sections herein will not be deemed part
                  of this
                  Agreement but will be regarded as having been used for convenience
                  only.

              

      

      

      
        	
                19.

              	
                DEFAULT

              

      

      

      
        	
                19.1

              	
                If
                  any party (a "Defaulting Party") is in default of any requirement
                  herein
                  set forth other than the provisions of Section 5 for which notice
                  of
                  default need not be given, the party affected by such default will
                  give
                  written notice to the defaulting Party specifying the default and
                  the
                  Defaulting Party will not lose any rights under this Agreement,
                  unless
                  within 30 days after the giving of notice of default by the affected
                  party
                  the Defaulting Party has cured the default by the appropriate performance
                  and if the Defaulting Party fails within such period to cure any
                  such
                  default, the affected party will be entitled to seek any remedy
                  it may
                  have on account of such default.

              

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      -
        9 -

       

      

      
        	
                20.

              	
                PAYMENT

              

      

      

      
        	
                20.1

              	
                All
                  references to monies hereunder will be in Canadian funds except
                  where
                  otherwise designated. All payments to be made to any party hereunder
                  will
                  be mailed or delivered to such party at its address for notice
                  purposes as
                  provided herein, or for the account of such party at such bank
                  or banks in
                  Canada as such party may designate from time to time by written
                  notice.
                  Said bank or banks will be deemed the agent of the designating
                  party for
                  the purpose of receiving and collecting such
                  payment.

              

      

      

      
        	
                21.

              	
                ENUREMENT

              

      

      

      
        	
                21.1

              	
                Subject
                  to Section 13, this Agreement will enure to the benefit of and
                  be binding
                  upon the parties hereto and their respective successors and permitted
                  assigns.

              

      

      

      
        	
                22.

              	
                TERMS

              

      

      

      
        	
                22.1

              	
                The
                  terms and provisions of this Agreement shall be interpreted in
                  accordance
                  with the laws of British Columbia.

              

      

      

      
        	
                23.

              	
                FORCE
                  MAJEURE

              

      

      

      
        	
                23.1

              	
                No
                  party will be liable for its failure to perform any of its obligations
                  under this Agreement due to a cause beyond its control (except
                  those
                  caused by its own lack of funds) including, but not limited to
                  acts of
                  God, fire, flood, explosion, strikes, lockouts or other industrial
                  disturbances, laws, rules and regulations or orders of any duly
                  constituted governmental authority or non- availability of materials
                  or
                  transportation (each an "Intervening
                  Event").

              

      

      

      
        	
                23.2

              	
                All
                  time limits imposed by this Agreement, other than those imposed
                  by Section
                  5, will be extended by a period equivalent to the period of delay
                  resulting from an Intervening Event described in Subsection
                  23.1.

              

      

      

      
        	
                23.3

              	
                A
                  party relying on the provisions of Subsection 23.1 will take all
                  reasonable steps to eliminate an Intervening Event and, if possible,
                  will
                  perform its obligations under this Agreement as far as practical,
                  but
                  nothing herein will require such party to settle or adjust any
                  labour
                  dispute or to question or to test the validity of any law, rule,
                  regulation or order of any duly constituted governmental authority
                  or to
                  complete its obligations under this Agreement if an Intervening
                  Event
                  renders completion impossible.

              

      

      

      
        	
                24.

              	
                ENTIRE
                  AGREEMENT

              

      

      

      
        	
                24.1

              	
                This
                  Agreement constitutes the entire agreement between the parties
                  and
                  replaces and supersedes all prior agreements, memoranda, correspondence,
                  communications, negotiations and representations, whether verbal
                  or
                  written, express or implied, statutory or otherwise between the
                  parties
                  with respect to the subject matter
                  herein.

              

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      -
        10 -

       

      

      
        	
                25.

              	
                TIME
                  OF ESSENCE

              

      

      

      
        	
                25.1

              	
                Time
                  will be of the essence in this
                  Agreement.

              

      

      

      
        	
                26.

              	
                ENFORCEMENT
                  OF AGREEMENT

              

      

      

      
        	
                26.1

              	
                The
                  covenants, promises, terms and conditions contained herein will
                  be binding
                  upon the parties jointly and severally and may be enforced by each
                  as
                  against each other inter se.

              

      

       

      IN
        WITNESS WHEREOF the parties hereto have executed this Agreement as of
        the day and year first above written.

       

       

      Peter
        Lawrence Wells

       

      

      
        	
                 

              	
                
                  

                  By:  Peter Lawrence Wells

              

      

       

      
        	
                 

              	
                
                  

                  Signature of Witness

              

      

       

      
        	
                 

              	
                
                  

                  Printed Name of Witness

              

      

       

       

      BLUEBIRD
        EXPLORATION COMPANY

      

      
        	
                
                  Per:

                

              	
              

      

      
        	
                 

              	
                
                  
 by
                  its Authorized Signatory: Peter Lawrence Wells,
                  President 

              

      

      

       

       

       

       

       

       

       

       

       

      
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      This
        is SCHEDULE "A" to an Agreement made as of
        the 4th day of August, 2006 between VENDOR
and BLUEBIRD EXPLORATION COMPANY.

       

      
        	
                Claim
                  No.

              	 	
                Document
                  Description

              	 	
                Recording

              	 	
                Expiration

              
	
                512465

              	 	
                August

              	 	
                August
                  5, 2005

              	 	
                August
                  5, 2006

              
	
                512466

              	 	
                August

              	 	
                August
                  5, 2005

              	 	
                August
                  5, 2006Exhibit 4.1

 

PLIANT
CORPORATION

 

18% Senior
Subordinated Notes due 2012

 

INDENTURE

 

Dated as of
June 14, 2007

 

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

 

as Trustee

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Definitions
  and Incorporation by Reference

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  SECTION 1.02

  	
   

  	
  Other Definitions

  	
   

  	
  22

  
	
  SECTION 1.03

  	
   

  	
  Incorporation by Reference of Trust Indenture Act

  	
   

  	
  23

  
	
  SECTION 1.04

  	
   

  	
  Rules of Construction

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Securities

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01

  	
   

  	
  Form and Dating

  	
   

  	
  24

  
	
  SECTION 2.02

  	
   

  	
  Execution and Authentication

  	
   

  	
  24

  
	
  SECTION 2.03

  	
   

  	
  Registrar and Paying Agent

  	
   

  	
  25

  
	
  SECTION 2.04

  	
   

  	
  Paying Agent to Hold Money in Trust

  	
   

  	
  25

  
	
  SECTION 2.05

  	
   

  	
  Holder Lists

  	
   

  	
  26

  
	
  SECTION 2.06

  	
   

  	
  Transfer and Exchange

  	
   

  	
  26

  
	
  SECTION 2.07

  	
   

  	
  Replacement Securities

  	
   

  	
  27

  
	
  SECTION 2.08

  	
   

  	
  Outstanding Securities

  	
   

  	
  27

  
	
  SECTION 2.09

  	
   

  	
  Temporary Securities

  	
   

  	
  28

  
	
  SECTION 2.10

  	
   

  	
  Cancellation

  	
   

  	
  28

  
	
  SECTION 2.11

  	
   

  	
  Defaulted Interest

  	
   

  	
  28

  
	
  SECTION 2.12

  	
   

  	
  CUSIP and ISIN Numbers

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Redemption

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01

  	
   

  	
  Notices to Trustee

  	
   

  	
  29

  
	
  SECTION 3.02

  	
   

  	
  Selection of Securities To Be Redeemed

  	
   

  	
  29

  
	
  SECTION 3.03

  	
   

  	
  Notice of Redemption

  	
   

  	
  29

  
	
  SECTION 3.04

  	
   

  	
  Effect of Notice of Redemption

  	
   

  	
  30

  
	
  SECTION 3.05

  	
   

  	
  Deposit of Redemption Price

  	
   

  	
  30

  
	
  SECTION 3.06

  	
   

  	
  Securities Redeemed in Part

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
   

  	
  Payment of Securities

  	
   

  	
  31

  
	
  SECTION 4.02

  	
   

  	
  SEC Reports

  	
   

  	
  31

  
	
  SECTION 4.03

  	
   

  	
  Limitation on Indebtedness

  	
   

  	
  31

  

 

i

 

	
  SECTION 4.04

  	
   

  	
  Limitation on Restricted Payments

  	
   

  	
  35

  
	
  SECTION 4.05

  	
   

  	
  Limitation on Restrictions on Distributions from Restricted
  Subsidiaries

  	
   

  	
  39

  
	
  SECTION 4.06

  	
   

  	
  Limitation on Sales of Assets and Subsidiary Stock

  	
   

  	
  40

  
	
  SECTION 4.07

  	
   

  	
  Limitation on Transactions with Affiliates

  	
   

  	
  43

  
	
  SECTION 4.08

  	
   

  	
  Change of Control

  	
   

  	
  44

  
	
  SECTION 4.09

  	
   

  	
  Compliance Certificate

  	
   

  	
  46

  
	
  SECTION 4.10

  	
   

  	
  Further Instruments and Acts

  	
   

  	
  47

  
	
  SECTION 4.11

  	
   

  	
  Future Note Guarantors

  	
   

  	
  47

  
	
  SECTION 4.12

  	
   

  	
  Limitation on Lines of Business

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Successor
  Company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01

  	
   

  	
  When Company May Merge or Transfer Assets

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Defaults and
  Remedies

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01

  	
   

  	
  Events of Default

  	
   

  	
  48

  
	
  SECTION 6.02

  	
   

  	
  Acceleration

  	
   

  	
  50

  
	
  SECTION 6.03

  	
   

  	
  Other Remedies

  	
   

  	
  51

  
	
  SECTION 6.04

  	
   

  	
  Waiver of Past Defaults

  	
   

  	
  51

  
	
  SECTION 6.05

  	
   

  	
  Control by Majority

  	
   

  	
  51

  
	
  SECTION 6.06

  	
   

  	
  Limitation on Suits

  	
   

  	
  51

  
	
  SECTION 6.07

  	
   

  	
  Rights of Holders to Receive Payment

  	
   

  	
  52

  
	
  SECTION 6.08

  	
   

  	
  Collection Suit by Trustee

  	
   

  	
  52

  
	
  SECTION 6.09

  	
   

  	
  Trustee May File Proofs of Claim

  	
   

  	
  52

  
	
  SECTION 6.10

  	
   

  	
  Priorities

  	
   

  	
  52

  
	
  SECTION 6.11

  	
   

  	
  Undertaking for Costs

  	
   

  	
  53

  
	
  SECTION 6.12

  	
   

  	
  Waiver of Stay or Extension Laws

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01

  	
   

  	
  Duties of Trustee

  	
   

  	
  53

  
	
  SECTION 7.02

  	
   

  	
  Rights of Trustee

  	
   

  	
  54

  
	
  SECTION 7.03

  	
   

  	
  Individual Rights of Trustee

  	
   

  	
  56

  
	
  SECTION 7.04

  	
   

  	
  Trustee’s Disclaimer

  	
   

  	
  56

  
	
  SECTION 7.05

  	
   

  	
  Notice of Defaults

  	
   

  	
  56

  
	
  SECTION 7.06

  	
   

  	
  Reports by Trustee to Holders

  	
   

  	
  56

  
	
  SECTION 7.07

  	
   

  	
  Compensation and Indemnity

  	
   

  	
  56

  
	
  SECTION 7.08

  	
   

  	
  Replacement of Trustee

  	
   

  	
  57

  
	
  SECTION 7.09

  	
   

  	
  Successor Trustee by Merger

  	
   

  	
  58

  

 

ii

 

	
  SECTION 7.10

  	
   

  	
  Eligibility; Disqualification

  	
   

  	
  58

  
	
  SECTION 7.11

  	
   

  	
  Preferential Collection of Claims Against the Company

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Discharge of
  Indenture; Defeasance

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01

  	
   

  	
  Discharge of Liability on Securities; Defeasance

  	
   

  	
  59

  
	
  SECTION 8.02

  	
   

  	
  Conditions to Defeasance

  	
   

  	
  60

  
	
  SECTION 8.03

  	
   

  	
  Application of Trust Money

  	
   

  	
  61

  
	
  SECTION 8.04

  	
   

  	
  Repayment to Company

  	
   

  	
  61

  
	
  SECTION 8.05

  	
   

  	
  Indemnity for Government Obligations

  	
   

  	
  61

  
	
  SECTION 8.06

  	
   

  	
  Reinstatement

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Amendments

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
   

  	
  Without Consent of Holders

  	
   

  	
  62

  
	
  SECTION 9.02

  	
   

  	
  With Consent of Holders

  	
   

  	
  62

  
	
  SECTION 9.03

  	
   

  	
  Compliance with Trust Indenture Act

  	
   

  	
  63

  
	
  SECTION 9.04

  	
   

  	
  Revocation and Effect of Consents and Waivers

  	
   

  	
  63

  
	
  SECTION 9.05

  	
   

  	
  Notation on or Exchange of Securities

  	
   

  	
  64

  
	
  SECTION 9.06

  	
   

  	
  Trustee to Sign Amendments

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Subordination

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01

  	
   

  	
  Agreement to Subordinate

  	
   

  	
  64

  
	
  SECTION 10.02

  	
   

  	
  Liquidation, Dissolution, Bankruptcy

  	
   

  	
  65

  
	
  SECTION 10.03

  	
   

  	
  Default on Designated Senior Indebtedness

  	
   

  	
  65

  
	
  SECTION 10.04

  	
   

  	
  Acceleration of Payment of Securities

  	
   

  	
  66

  
	
  SECTION 10.05

  	
   

  	
  When Distribution Must Be Paid Over

  	
   

  	
  66

  
	
  SECTION 10.06

  	
   

  	
  Subrogation

  	
   

  	
  66

  
	
  SECTION 10.07

  	
   

  	
  Relative Rights

  	
   

  	
  66

  
	
  SECTION 10.08

  	
   

  	
  Subordination May Not Be Impaired by Company

  	
   

  	
  67

  
	
  SECTION 10.09

  	
   

  	
  Rights of Trustee and Paying Agent

  	
   

  	
  67

  
	
  SECTION 10.10

  	
   

  	
  Distribution or Notice to Representative

  	
   

  	
  67

  
	
  SECTION 10.11

  	
   

  	
  Article 10 Not to Prevent Events of Default or Limit Right To
  Accelerate

  	
   

  	
  67

  
	
  SECTION 10.12

  	
   

  	
  Trust Monies Not Subordinated

  	
   

  	
  67

  
	
  SECTION 10.13

  	
   

  	
  Trustee Entitled to Rely

  	
   

  	
  67

  
	
  SECTION 10.14

  	
   

  	
  Trustee to Effectuate Subordination

  	
   

  	
  68

  
	
  SECTION 10.15

  	
   

  	
  Trustee Not Fiduciary for Holders of Senior Indebtedness

  	
   

  	
  68

  
	
  SECTION 10.16

  	
   

  	
  Reliance by Holders of Senior Indebtedness on Subordination
  Provisions

  	
   

  	
  68

  

 

iii

 

	
  ARTICLE 11

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Note
  Guarantees

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01

  	
   

  	
  Note Guarantees

  	
   

  	
  68

  
	
  SECTION 11.02

  	
   

  	
  Limitation on Liability

  	
   

  	
  71

  
	
  SECTION 11.03

  	
   

  	
  Successors and Assigns

  	
   

  	
  71

  
	
  SECTION 11.04

  	
   

  	
  No Waiver

  	
   

  	
  71

  
	
  SECTION 11.05

  	
   

  	
  Modification

  	
   

  	
  72

  
	
  SECTION 11.06

  	
   

  	
  Execution of Supplemental Indenture for Future Note Guarantors

  	
   

  	
  72

  
	
  SECTION 11.07

  	
   

  	
  Non-Impairment

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Subordination
  of the Note Guarantees

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.01

  	
   

  	
  Agreement To Subordinate

  	
   

  	
  72

  
	
  SECTION 12.02

  	
   

  	
  Liquidation, Dissolution, Bankruptcy

  	
   

  	
  72

  
	
  SECTION 12.03

  	
   

  	
  Default on Designated Senior Indebtedness of a Note Guarantor

  	
   

  	
  73

  
	
  SECTION 12.04

  	
   

  	
  Demand for Payment

  	
   

  	
  74

  
	
  SECTION 12.05

  	
   

  	
  When Distribution Must Be Paid Over

  	
   

  	
  74

  
	
  SECTION 12.06

  	
   

  	
  Subrogation

  	
   

  	
  74

  
	
  SECTION 12.07

  	
   

  	
  Relative Rights

  	
   

  	
  74

  
	
  SECTION 12.08

  	
   

  	
  Subordination May Not Be Impaired by a Note Guarantor

  	
   

  	
  75

  
	
  SECTION 12.09

  	
   

  	
  Rights of Trustee and Paying Agent

  	
   

  	
  75

  
	
  SECTION 12.10

  	
   

  	
  Distribution or Notice to Representative

  	
   

  	
  75

  
	
  SECTION 12.11

  	
   

  	
  Article 12 Not To Prevent Events of Default or Limit Right To
  Accelerate

  	
   

  	
  75

  
	
  SECTION 12.12

  	
   

  	
  Trustee Entitled To Rely

  	
   

  	
  75

  
	
  SECTION 12.13

  	
   

  	
  Trustee To Effectuate Subordination

  	
   

  	
  76

  
	
  SECTION 12.14

  	
   

  	
  Trustee Not Fiduciary for Holders of Senior Indebtedness of a Note
  Guarantor

  	
   

  	
  76

  
	
  SECTION 12.15

  	
   

  	
  Reliance by Holders of Senior Indebtedness of a Note Guarantor on
  Subordination Provisions

  	
   

  	
  76

  
	
  SECTION 12.16

  	
   

  	
  Defeasance

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01

  	
   

  	
  Trust Indenture Act Controls

  	
   

  	
  77

  
	
  SECTION 13.02

  	
   

  	
  Notices

  	
   

  	
  77

  
	
  SECTION 13.03

  	
   

  	
  Communication by Holders with Other Holders

  	
   

  	
  77

  
	
  SECTION 13.04

  	
   

  	
  Certificate and Opinion as to Conditions Precedent

  	
   

  	
  78

  
	
  SECTION 13.05

  	
   

  	
  Statements Required in Certificate or Opinion

  	
   

  	
  78

  
	
  SECTION 13.06

  	
   

  	
  When Securities Disregarded

  	
   

  	
  78

  
	
  SECTION 13.07

  	
   

  	
  Rules by Trustee, Paying Agent and Registrar

  	
   

  	
  78

  

 

iv

 

	
  SECTION 13.08

  	
   

  	
  Legal Holidays

  	
   

  	
  79

  
	
  SECTION 13.09

  	
   

  	
  GOVERNING LAW

  	
   

  	
  79

  
	
  SECTION 13.10

  	
   

  	
  No Recourse Against Others

  	
   

  	
  79

  
	
  SECTION 13.11

  	
   

  	
  Successors

  	
   

  	
  79

  
	
  SECTION 13.12

  	
   

  	
  Multiple Originals

  	
   

  	
  79

  
	
  SECTION 13.13

  	
   

  	
  Table of Contents; Headings

  	
   

  	
  79

  
	
  SECTION 13.14

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  79

  
	
  SECTION 13.15

  	
   

  	
  Force Majeure

  	
   

  	
  79

  

 

	
  Appendix A

  	
  -

  	
  Provisions Relating to Securities

  
	
  Exhibit A

  	
  -

  	
  Form of 18% Senior Subordinated Notes due 2012

  
	
  Exhibit B

  	
  -

  	
  Form of Certificate of Transfer

  
	
  Exhibit C

  	
  -

  	
  Form of Certificate of Exchange

  
	
  Exhibit D

  	
  -

  	
  Form of Certificate from Acquiring Institutional Accredited Investor

  
	
  Exhibit E

  	
  -

  	
  Form of Supplemental Indenture 

  

 

v

 

Reconciliation and tie between Indenture, dated as of June 14, 2007,
and the Trust Indenture Act of 1939, as amended.

 

 

	
  Trust Indenture Act of 1939 Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  6.10; 6.11; 6.12

  
	
   

  	
  (a)(2)

  	
   

  	
  6.12

  
	
   

  	
  (a)(3)

  	
   

  	
  TIA

  
	
   

  	
  (a)(4)

  	
   

  	
  Not applicable

  
	
   

  	
  (a)(5)

  	
   

  	
  TIA

  
	
   

  	
  (b)

  	
   

  	
  4.6; 6.4; 6.10; 6.12; TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  311

  	
  (a)

  	
   

  	
  6.4; 6.16; TIA

  
	
   

  	
  (b)

  	
   

  	
  TIA

  
	
   

  	
  (c)

  	
   

  	
  Not applicable

  
	
   

  	
   

  	
   

  	
   

  
	
  312

  	
  (a)

  	
   

  	
  6.8

  
	
   

  	
  (b)

  	
   

  	
  1.16; TIA

  
	
   

  	
  (c)

  	
   

  	
  1.16; TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  313

  	
  (a)

  	
   

  	
  6.3; 6.7; TIA

  
	
   

  	
  (b)

  	
   

  	
  6.3; 6.7; TIA

  
	
   

  	
  (c)

  	
   

  	
  6.3; 6.7; TIA

  
	
   

  	
  (d)

  	
   

  	
  6.3; 6.7; TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  314

  	
  (a)

  	
   

  	
  9.5; 9.7; TIA

  
	
   

  	
  (b)

  	
   

  	
  Not applicable

  
	
   

  	
  (c)(1)

  	
   

  	
  1.2; 4.1; 4.6; 5.7; 7.1; 9.5

  
	
   

  	
  (c)(2)

  	
   

  	
  1.2; 4.1; 4.6; 7.1; 9.5

  
	
   

  	
  (c)(3)

  	
   

  	
  Not applicable

  
	
   

  	
  (d)

  	
   

  	
  Not applicable

  
	
   

  	
  (e)

  	
   

  	
  9.8; TIA

  
	
   

  	
  (f)

  	
   

  	
  TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  315

  	
  (a)

  	
   

  	
  6.1; 6.3; TIA

  
	
   

  	
  (b)

  	
   

  	
  6.2

  
	
   

  	
  (c)

  	
   

  	
  TIA

  
	
   

  	
  (d)(1)

  	
   

  	
  TIA

  
	
   

  	
  (d)(2)

  	
   

  	
  6.1; TIA

  
	
   

  	
  (d)(3)

  	
   

  	
  6.1; TIA

  
	
   

  	
  (e)

  	
   

  	
  6.10; TIA

  
	
   

  	
   

  	
   

  	
   

  
	
  316

  	
  (a)(last sentence)

  	
   

  	
  1.1

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  5.2; 5.8

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  5.7

  
	
   

  	
  (b)

  	
   

  	
  5.9; 5.10

  
	
   

  	
  (c)

  	
   

  	
  1.4; TIA

  

 

vi

 

	
  Trust Indenture Act of 1939 Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  	
   

  
	
  317

  	
  (a)(1)

  	
   

  	
  5.3; 6.3

  
	
   

  	
  (a)(2)

  	
   

  	
  5.4; 6.3

  
	
   

  	
  (b)

  	
   

  	
  6.3; 9.3

  
	
   

  	
   

  	
   

  	
   

  
	
  318

  	
  (a)

  	
   

  	
  1.11

  
	
   

  	
  (b)

  	
   

  	
  TIA

  
	
   

  	
  (c)

  	
   

  	
  1.11; TIA

  

 

This reconciliation and tie Section does not constitute part of the
indenture.

 

vii

 

INDENTURE
dated as of June 14, 2007, among PLIANT CORPORATION, a Delaware corporation
(the “Company”), PLIANT CORPORATION INTERNATIONAL, a Utah corporation, PLIANT
FILM PRODUCTS OF MEXICO, INC., a Utah corporation, PLIANT SOLUTIONS
CORPORATION, a Utah corporation, PLIANT PACKAGING OF CANADA, LLC, a Utah
limited liability company, UNIPLAST HOLDINGS, INC., a Delaware corporation,
UNIPLAST U.S., INC., a Delaware corporation, and UNIPLAST INDUSTRIES CO., a
Nova Scotia unlimited company (collectively, the “Note Guarantors”) and THE
BANK OF NEW YORK TRUST COMPANY, N.A., a national banking association, as trustee
(the “Trustee”).

 

Each party
agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of the Company’s 18% Senior Subordinated Notes
due 2012 issued on the date hereof (the “Securities”). Except as otherwise
provided herein, the Securities will be limited to $24,000,000 in aggregate
principal amount outstanding.

 

ARTICLE 1

 

Definitions and Incorporation by Reference

 

SECTION 1.01                    Definitions.

 

“2000 Notes
Closing Date” means May 31, 2000.

 

“2003 Notes”
means the $250,000,000 aggregate principal amount of the Company’s 11 1/8%
senior secured notes due 2009 issued under the 2003 Notes Indenture.

 

“2003 Notes
Indenture” means the indenture dated as of May 30, 2003, among the Company,
the guarantors named therein, and Wilmington Trust Company, as initial
indenture trustee, and succeeded by Wells Fargo Bank, National Association, as
successor indenture trustee, under which the 2003 Notes were issued, as
amended, modified, or supplemented from time to time.

 

“2004 Notes”
means the 11.85% (formerly 11 5/8%) senior secured notes due 2009 and the
remaining 11.35% (formerly 11 1/8%) senior secured notes due 2009, each issued
under the 2004 Notes Indenture.

 

“2004 Notes
Closing Date” means May 6, 2005.

 

“2004 Notes
Indenture” means the indenture dated as of February 17, 2004 (as amended
and restated as of May 6, 2005 and further amended as of July 18, 2006), among
the Company, the guarantors named therein, and Wilmington Trust Company, as
indenture trustee, under which the 2004 Notes were issued, as amended,
modified, or supplemented from time to time.

 

“2004 Notes
Original Issue Date” means February 17, 2004.

 

“Additional Assets” means (a) any property or
assets (other than Indebtedness and Capital Stock) to be used by the Company or
a Restricted Subsidiary in a Permitted Business or any improvements to any
property or assets that are used by the Company or a Restricted

 

 

Subsidiary in
a Permitted Business; (b) Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary; or (c) Capital Stock constituting a minority
interest in any Person that at such time is a Restricted Subsidiary; provided,
however, that any such Restricted Subsidiary described in clauses (b) or (c)
above is primarily engaged in a Permitted Business.

 

“Affiliate” of any specified Person means any
other Person, directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified Person. For the purposes
of this definition, “control” when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing. For purposes of Sections 4.06 and 4.07 only, “Affiliate”
shall also mean any beneficial owner of shares representing 10% or more of the
total voting power of the Voting Stock (on a fully diluted basis) of the
Company or of rights or warrants to purchase such Voting Stock (whether or not
currently exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.

 

“Applicable Premium” means, with
respect to any Security on any repurchase date, the excess of : (a) the present
value at the repurchase date of (i) the redemption price of the Securities at
June 14, 2008 (such redemption price being set forth in paragraph 5 of the
Securities) plus (ii) all required interest payments due on the Security to,
but excluding, June 14, 2008 (excluding accrued but unpaid interest to the
applicable redemption date), computed using a discount rate equal to the
Treasury Rate as of such redemption date plus 50 basis points; over (b) the
principal amount of the Security, if greater.

 

“Asset Disposition” means any sale, lease (other
than an operating lease entered into in the ordinary course of business),
transfer or other disposition (or series of related sales, leases, transfers or
dispositions) by the Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a “disposition”), of (a) any
shares of Capital Stock of a Restricted Subsidiary (other than directors’
qualifying shares or shares required by applicable law to be held by a Person
other than the Company or a Restricted Subsidiary), (b) all or substantially
all the assets of any division or line of business of the Company or any
Restricted Subsidiary or (c) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or such
Restricted Subsidiary (other than, in the case of (a), (b) and (c) above, (i) a
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly Owned Subsidiary, (ii) for purposes of
Section 4.06 only, the making of a Permitted Investment or a disposition that
constitutes a Restricted Payment permitted by Section 4.04, (iii) sales of
accounts receivable 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, (iv) a disposition of
obsolete or worn out property or equipment or property or equipment that is no
longer used or useful in the conduct of business of the Company and its
Restricted Subsidiaries, (v) any other disposition of assets with a fair market
value, as conclusively determined by senior management of the Company in good
faith, of less than $1.0 million, (vi) sales or grants of licenses to use the
Company’s or any Restricted Subsidiary’s patents, trade secrets, know-how and
technology to the extent that such

 

2

 

license does
not prohibit the licensor from using the patent, trade secret, know-how or
technology or require the licensor to pay any fees for such use, (vii) the
disposition of all or substantially all of the assets of the Company in
compliance with Section 5.01 and (viii) the disposition of any Capital Stock or
other ownership interest in or assets or property of an Unrestricted
Subsidiary.

 

“Attributable Debt” in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Securities, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended).

 

“Average Life” means, as of the date of
determination, with respect to any Indebtedness or Preferred Stock, the
quotient obtained by dividing (a) the sum of the products of the numbers of
years from the date of determination to the dates of each successive scheduled
principal payment of such Indebtedness or scheduled redemption or similar
payment with respect to such Preferred Stock multiplied by the amount of such
payment by (b) the sum of all such payments.

 

“Bank Indebtedness” means any and all amounts
payable under or in respect of the Credit Agreement and any Refinancing
Indebtedness with respect thereto, as amended from time to time, including
principal, premium (if any), interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees
and all other amounts payable thereunder or in respect thereof.

 

“Board of Directors” means the Board of Directors
of the Company or any committee thereof duly authorized to act on behalf of the
Board of Directors of the Company.

 

“Business Day” means each day which is not a Legal
Holiday.

 

“Capital Stock” of any Person means any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) equity of such
Person, including any Preferred Stock, but excluding any debt securities
convertible into such equity.

 

“Capitalized Lease Obligations” means an obligation
that is required to be classified and accounted for as a capitalized lease for
financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligation shall be the capitalized amount of
such obligation determined in accordance with GAAP; and the Stated Maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be prepaid
by the lessee without payment of a penalty.

 

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

 

3

 

(a)                                  prior to the first
public offering of common stock of the Company, the Permitted Holders cease to
be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of a majority in the aggregate of the
total voting power of the Voting Stock of the Company, whether as a result of
issuance of securities of the Company, any merger, consolidation, liquidation
or dissolution of the Company, any direct or indirect transfer of securities by
any Permitted Holder or otherwise (for purposes of this clause (a) and clause
(b) below, the Permitted Holders shall be deemed to beneficially own any Voting
Stock of an entity (the “specified entity”) held by any other entity (the “parent
entity”) so long as the Permitted Holders beneficially own (as so defined),
directly or indirectly, in the aggregate a majority of the voting power of the
Voting Stock of the parent entity);

 

(b)                                 (i) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act, including
any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act),
other than one or more Permitted Holders, is or becomes the beneficial owner
(as defined in clause (a) above, except that for purposes of this clause (b) a
person (including a Permitted Holder) shall be deemed to have “beneficial
ownership” of all shares that any such person has the right to acquire, whether
such right is exercisable immediately, only after the passage of time, upon the
happening of any event or otherwise), directly or indirectly, of more than 50%
of the total voting power of the Voting Stock of the Company and (ii) the
Permitted Holders “beneficially own” (as defined in clause (a) above), directly
or indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Stock of the Company than such other person and do not have the
right or ability by voting power, contract or otherwise to elect or designate
for election a majority of the Board of Directors of the Company (for the
purposes of this clause (b), such other person shall be deemed to beneficially
own any Voting Stock of a specified entity held by a parent entity, if such
other person is the beneficial owner (as defined in this clause (b)), directly
or indirectly, of more than 50% of the voting power of the Voting Stock of such
parent entity and the Permitted Holders “beneficially own” (as defined in
clause (a) above), directly or indirectly, in the aggregate a lesser percentage
of the voting power of the Voting Stock of such parent entity and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of such parent
entity);

 

(c)                                  during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors (i) selected in accordance with the Stockholders Agreement so long as
such agreement is in effect or otherwise nominated by the Permitted Holders or
(ii) whose election by the Board of Directors of the Company or whose nomination
for election by the stockholders of the Company was approved by a vote of at
least a majority of the members of the Board of Directors of the Company, then
still in office, who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved by the
Board of Directors or in accordance with the Stockholders Agreement or
otherwise by the Permitted Holders) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office;

 

4

 

(d)                                 the adoption of a plan
relating to the liquidation or dissolution of the Company; or

 

(e)                                  the merger or
consolidation of the Company with or into another Person or the merger of another
Person with or into the Company, or the sale of all or substantially all the
assets of the Company to another Person (other than a Person that is controlled
by the Permitted Holders), and, in the case of any such merger or
consolidation, the securities of the Company that are outstanding immediately
prior to such transaction and which represent 100% of the aggregate voting
power of the Voting Stock of the Company are changed into or exchanged for
cash, securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving Person or transferee that represent
immediately after such transaction, at least a majority of the aggregate voting
power of the Voting Stock of the surviving Person or transferee.

 

“Closing Date” means the date of this Indenture.

 

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

 

“Commodity Agreement” means any commodity futures
contract, commodity option or other similar agreement or arrangement entered
into by the Company or any of its Subsidiaries designed to protect the Company
or any of its Subsidiaries against fluctuations in the price of commodities
actually at the time used in the ordinary course of business of the Company or
its Subsidiaries.

 

“Company” means the party named as such in this
Indenture until a successor replaces it and, thereafter, means the successor
and, for purposes of any provision contained herein and required by the TIA,
each other obligor on the indenture securities.

 

“Consolidated Coverage Ratio” as of any date of
determination means the ratio of (a) the aggregate amount of EBITDA for the
period of the most recent four consecutive fiscal quarters for which financial
statements are publicly available ending prior to the date of such
determination to (b) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (i) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period
that remains outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio is an
Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period, (ii) if the
Company or any Restricted Subsidiary has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of such period or if
any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged
(in each case other than Indebtedness Incurred under any revolving credit
facility unless such Indebtedness has been permanently repaid and has not been
replaced) on the date of the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall

 

5

 

be calculated
on a pro forma basis as if such discharge had occurred on the first day of such
period and as if the Company or such Restricted Subsidiary has not earned the
interest income actually earned during such period in respect of cash or
Temporary Cash Investments used to repay, repurchase, defease or otherwise
discharge such Indebtedness, (iii) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition in
excess of $10.0 million which constitutes all or substantially all of an
operating unit of a business, the EBITDA for such period shall be reduced by an
amount equal to the EBITDA (if positive) directly attributable to the assets
that are the subject of such Asset Disposition for such period or increased by
an amount equal to the EBITDA (if negative) directly attributable thereto for
such period and Consolidated Interest Expense for such period shall be reduced
by an amount equal to the Consolidated Interest Expense directly attributable
to any Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company and
its continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent
the Company and its continuing Restricted Subsidiaries are no longer liable for
such Indebtedness after such sale), (iv) if since the beginning of such period
the Company or any Restricted Subsidiary (by merger or otherwise) shall have
made an Investment in any Restricted Subsidiary (or any Person that becomes a
Restricted Subsidiary or is merged with and into the Company) or an acquisition
of assets, including any acquisition of assets occurring in connection with a
transaction causing a calculation to be made hereunder, which constitutes all
or substantially all of an operating unit of a business, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto (including the Incurrence of any Indebtedness) as if
such Investment or acquisition occurred on the first day of such period and (v)
if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Asset
Disposition or any Investment or acquisition of assets that would have required
an adjustment pursuant to clause (iii) or (iv) above if made by the Company or
a Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect thereto
as if such Asset Disposition, Investment or acquisition of assets occurred on
the first day of such period. For purposes of this definition, whenever pro
forma effect is to be given to an Investment or acquisition of assets, the
amount of income or earnings relating thereto and the amount of Consolidated
Interest Expense associated with any Indebtedness Incurred in connection
therewith, the pro forma calculations shall be determined in good faith by a
responsible financial or accounting Officer of the Company. Any such pro forma
calculations may include operating expense reductions for such period resulting
from the acquisition which is being given pro forma effect that (a) would be
permitted pursuant to Article 11 of Regulation S-X under the Securities Act or
(b) have been realized or for which the steps necessary for realization have
been taken or are reasonably expected to be taken within six months following
any such acquisition, including, but not limited to, the execution or
termination of any contracts, the termination of any personnel or the closing
(or approval by the Board of Directors of any closing) of any facility, as
applicable, provided that, such adjustments are set forth in an Officers’
Certificate signed by the Company’s chief financial officer and another Officer
which states (i) the amount of such adjustment or adjustments, (ii) that such
adjustment or adjustments are based on the reasonable good faith beliefs of the
officers executing such

 

6

 

Officers’
Certificate at the time of such execution and (iii) that any related Incurrence
of Indebtedness is permitted pursuant to this Indenture. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the
interest expense on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement or Currency Agreement
applicable to such Indebtedness if such Interest Rate Agreement or Currency
Agreement has a remaining term as at the date of determination in excess of 12
months).

 

“Consolidated Interest Expense” means, for any
period, the total interest expense of the Company and its Consolidated Restricted
Subsidiaries plus, to the extent Incurred by the Company and its Restricted
Subsidiaries in such period but not included in such interest expense, (a)
interest expense attributable to Capitalized Lease Obligations and the interest
expense attributable to operating leases constituting part of a Sale/Leaseback
Transaction, (b) amortization of debt discount and debt issuance costs, (c)
capitalized interest, (d) non-cash interest expense, (e) commissions, discounts
and other fees and charges attributable to letters of credit and bankers’
acceptance financing, (f) interest accruing on any Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed by the Company or any
Restricted Subsidiary, (g) net costs associated with Hedging Obligations
(including amortization of fees), provided, however, that if Hedging
Obligations result in net benefits rather than costs, such benefits shall be
credited in determining Consolidated Interest Expense unless, pursuant to GAAP,
such net benefits are otherwise reflected in Consolidated Net Income, (h)
dividends and distributions declared in respect of all Disqualified Stock of
the Company and dividends and distributions declared and paid in respect of all
Preferred Stock of any of the Subsidiaries of the Company that is not a Note
Guarantor, to the extent held by Persons other than the Company or a Wholly
Owned Subsidiary, (i) interest Incurred in connection with investments in
discontinued operations and (j) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust. Notwithstanding
anything to the contrary contained herein, commissions, discounts, yield and
other fees and charges Incurred in connection with any transaction pursuant to
which the Company or any Subsidiary of the Company may sell, convey or
otherwise transfer or grant a security interest in any accounts receivable or
related assets shall be included in Consolidated Interest Expense.

 

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

 

(a)                                  any
net income (loss) of any Person (other than the Company) if such Person is not
a Restricted Subsidiary, except that (i) subject to the limitations contained
in clauses (d), (e) and (f) below, the Company’s equity in the net income of
any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution
made to a Restricted Subsidiary, to the limitations contained in clause (c)
below) and (ii) the Company’s equity in a net loss of any such Person for such
period shall be included in determining such Consolidated Net Income to

 

7

 

the extent such loss has
been funded with cash from the Company or a Restricted Subsidiary;

 

(b)                                 other
than for purposes of clauses (iv) and (v) of the definition of Consolidated
Coverage Ratio any net income (or loss) of any Person acquired by the Company
or a Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;

 

(c)                                  any
net income (or loss) of any Restricted Subsidiary if such Restricted Subsidiary
is subject to restrictions, directly or indirectly, on the payment of dividends
or the making of distributions or loans or intercompany advances by such
Restricted Subsidiary, directly or indirectly, to the Company, except that (i)
subject to the limitations contained in clauses (d), (e) and (f) below, the
Company’s equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed, loaned or advanced by such Restricted
Subsidiary during such period to the Company or another Restricted Subsidiary
as a dividend, distribution, loan or advance (subject, in the case of a
dividend, distribution, loan or advance made to another Restricted Subsidiary,
to the limitation contained in this clause) and (ii) the Company’s equity in a
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;

 

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

 

(e)                                  any
extraordinary gain or loss; and

 

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

 

Notwithstanding the foregoing, for the
purposes of Section 4.04 only, there shall be excluded from Consolidated Net
Income any dividends, repayments of loans or advances or other transfers of
assets from Unrestricted Subsidiaries to the Company or a Restricted Subsidiary
to the extent such dividends, repayments or transfers increase the amount of
Restricted Payments permitted under such Section pursuant to clause
(a)(iv)(3)(F) thereof.

 

“Consolidation” means the consolidation of the
amounts of each of the Restricted Subsidiaries with those of the Company in
accordance with GAAP consistently applied; provided, however, that “Consolidation”
shall not include consolidation of the accounts of any Unrestricted Subsidiary,
but the interest of the Company or any Restricted Subsidiary in an Unrestricted
Subsidiary shall be accounted for as an investment. The term “Consolidated” has
a correlative meaning.

 

“Corporate Trust Office” means an office of the
Trustee at which at any time its corporate trust business shall be
administered, which office at the date hereof is located at 2 North LaSalle
Street, Suite 1020, Chicago, IL 60602, Attention: Corporate Trust
Administration,

 

8

 

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

 

“Credit Agreement” means collectively that certain
Working Capital Credit Agreement and Fixed Asset Credit Agreement, each dated
as of July 18, 2006, among the Company and certain of its subsidiaries as
borrowers, the lenders thereunder, Merrill Lynch Bank USA, as Administrative
Agent, and Merrill Lynch Commercial Finance Corp., as Sole Lead Arranger and
Book Manager, as each term is defined therein, together with related documents
thereto including any guarantee agreements and security documents, as amended,
modified, supplemented, restated, renewed, refunded, replaced, restructured,
repaid or refinanced from time to time (including any agreement extending the
maturity thereof or increasing the amount of available borrowings thereunder or
adding Restricted Subsidiaries of the Company as additional borrowers or
guarantors thereunder) whether with the original agents and lenders or
otherwise and whether provided under the original credit agreement or other
credit agreements or otherwise.

 

“Currency Agreement” means with respect to any
Person any foreign exchange contract, currency swap agreements or other similar
agreement or arrangement to which such Person is a party or of which it is a
beneficiary.

 

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

 

“Designated Senior Indebtedness” of the Company
means (a) the Bank Indebtedness and (b) (i) Indebtedness under the 2003 Notes
Indenture, (ii) Indebtedness under the 2004 Notes Indenture and (iii) any other
Senior Indebtedness of the Company that, in the case of clauses (i) – (iii)
hereof, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $15.0 million and is specifically
designated by the Company in the instrument evidencing or governing such Senior
Indebtedness as “Designated Senior Indebtedness” for purposes of this Indenture.
“Designated Senior Indebtedness” of a Note Guarantor has a correlative meaning.

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event (a) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (b) is
convertible or exchangeable for Indebtedness or Disqualified Stock (excluding
Capital Stock convertible or exchangeable solely at the option of the Company
or a Restricted Subsidiary, provided, that any such conversion or exchange
shall be deemed an issuance of Indebtedness or an issuance of Disqualified
Stock, as applicable) or (c) is redeemable at the option of the holder thereof,
in whole or in part, in the case of clauses (a), (b) and (c), on or prior to 91
days after the Stated Maturity of the Securities; provided, however, that only
the portion of Capital Stock that so matures or is mandatorily redeemable, is
so convertible or exchangeable or is so redeemable at the option of the holder
thereof prior to such date will be deemed Disqualified Stock; provided

 

9

 

further, that
any Capital Stock that would not constitute Disqualified 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” shall not constitute Disqualified Stock if the “asset
sale” or “change of control” provisions applicable to such Capital Stock
provide that such Person may not repurchase or redeem such Capital Stock
pursuant to such provisions unless such Person has first complied with the
provisions of Sections 4.06 and 4.08, as applicable; and provided further that any
class of Capital Stock of such Person that, by its terms, authorizes such
Person to satisfy in full its obligations with respect to payment of dividends
or upon maturity, redemption (pursuant to a sinking fund or otherwise) or
repurchase thereof or other payment obligations or otherwise by delivery of
Capital Stock that is not Disqualified Stock, and that is not convertible,
puttable or exchangeable for Disqualified Stock or Indebtedness, shall not be
deemed Disqualified Stock so long as such Person satisfies its obligations with
respect thereto solely by the delivery of Capital Stock that is not
Disqualified Stock.

 

“Domestic Overdraft Facility” means an overdraft
line of credit in a maximum principal amount of $10.0 million at any time
outstanding.

 

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

 

“EBITDA” for any period means the Consolidated Net
Income for such period, excluding the following to the extent included in
calculating such Consolidated Net Income: (a) income tax expense of the Company
and its Consolidated Restricted Subsidiaries, (b) Consolidated Interest
Expense, (c) depreciation expense of the Company and its Consolidated
Restricted Subsidiaries, (d) amortization expense of the Company and its
Consolidated Restricted Subsidiaries (but excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period), (e) other
noncash charges of the Company and its Consolidated Restricted Subsidiaries
(excluding any such noncash charge to the extent that it represents an accrual
of or reserve for cash expenditures in any future period), (f) income or loss
from discontinued operations, (g) plant closing costs (as defined by GAAP) and
(h) noncash stock-based compensation expense. Notwithstanding the foregoing,
the provision for taxes based on the income or profits of, and the depreciation
and amortization and noncash charges of, a Restricted Subsidiary of the Company
shall be added to Consolidated Net Income to compute EBITDA only to the extent
(and in the same proportion) that the net income (loss) of such Restricted
Subsidiary was included in calculating Consolidated Net Income and only if a
corresponding amount would be permitted at the date of determination to be
dividended, loaned or advanced to the Company by such Restricted Subsidiary
without prior approval of Persons other than the Board of Directors or holders
of the Company’s Capital Stock (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.

 

“Equity Offering” means any public or private sale
of the common stock of the Company, other than any public offering with respect
to the Company’s common stock registered on Form S-8 or other issuances upon
exercise of options by employees of the Company or any of its Restricted
Subsidiaries.

 

10

 

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

 

“Excluded Contribution” means net cash proceeds
received by the Company from (a) contributions to its common equity capital and
(b) the sale (other than to a Subsidiary of the Company or to any Company or
Subsidiary management equity plan or stock option plan or any other management
or employee benefit plan or agreement) of Capital Stock (other than
Disqualified Stock) of the Company, in each case designated as Excluded
Contributions pursuant to an Officers’ Certificate executed on the date such
capital contributions are made or the date such Capital Stock is sold, as the
case may be, which are excluded from the calculation set forth in Section
4.04(a)(iv)(3).

 

“Existing Management Stockholders” means each of
Harold C. Bevis, R. David Corey and Joseph J. Kwederis.

 

“Foreign Subsidiary” means any Restricted
Subsidiary of the Company organized, and conducting its principal operations,
outside the United States of America.

 

“Foreign Subsidiary Asset Disposition” means any
direct or indirect sale, issuance, conveyance, transfer, lease, assignment or
other transfer for value by the Company or any of its Restricted Subsidiaries
(including any Sale/Leaseback Transaction) to any Person other than the Company
or a Restricted Subsidiary of the Company of the Capital Stock of any Foreign
Subsidiary or any of the property or assets of any Foreign Subsidiary.

 

“GAAP” means generally accepted accounting
principles in the United States of America as in effect as of the Closing Date,
including those set forth in (a) the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (b) statements and pronouncements of the Financial Accounting
Standards Board, (c) such other statements by such other entities as are
approved by a significant segment of the accounting profession and (d) the
rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC. All ratios and computations
based on GAAP contained in this Indenture shall be computed in conformity with
GAAP, unless expressly provided otherwise.

 

“Guarantee” means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness 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 (b) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided, however, that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business. The
term “Guarantee” used as a verb has a corresponding meaning. The term “Guarantor”
shall mean any Person Guaranteeing any obligation.

 

11

 

“Hedging Obligations” of any Person means the
obligations of such Person pursuant to any Commodity Agreement, Interest Rate
Agreement or Currency Agreement.

 

“Holder” means the Person in whose name a Security
is registered on the Registrar’s books.

 

“Incur” means issue, assume, Guarantee, incur or
otherwise become liable for; provided, however, that any Indebtedness or
Capital Stock of a Person existing at the time such Person becomes a Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Subsidiary at the time it becomes a Subsidiary. The term “Incurrence”
when used as a noun shall have a correlative meaning.

 

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

 

(a)                                  the
principal of and premium (if any) in respect of indebtedness of such Person for
borrowed money;

 

(b)                                 the
principal of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments;

 

(c)                                  all
obligations of such Person in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect thereto);

 

(d)                                 all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except Trade Payables and other accrued liabilities
arising in the ordinary course of business), which purchase price is due more
than six months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services;

 

(e)                                  all
Capitalized Lease Obligations and all Attributable Debt of such Person;

 

(f)                                    all
obligations of such Person with respect to the redemption, repayment or other
repurchase of any Disqualified Stock or, with respect to any Subsidiary of such
Person that is not a Note Guarantor, any Preferred Stock (but excluding, in
each case, any accrued dividends);

 

(g)                                 all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person; provided, however,
that the amount of Indebtedness of such Person shall be the lesser of (i) the
fair market value of such asset at such date of determination and (ii) the
amount of such Indebtedness of such other Persons;

 

(h)                                 to
the extent not otherwise included in this definition, the net obligations under
Hedging Obligations of such Person;

 

(i)                                     to
the extent not otherwise included, the amount then outstanding (i.e., advanced,
and received by, and available for use by, such Person) under any receivables

 

12

 

financing (as set forth
in the books and records of such Person and confirmed by the agent, trustee or
other representative of the institution or group providing such receivables
financing); and

 

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

 

Notwithstanding the foregoing, “Indebtedness”
shall not include unsecured indebtedness of the Company and its Restricted
Subsidiaries Incurred to finance insurance premiums in a principal amount not
in excess of the insurance premiums to be paid by the Company and its
Restricted Subsidiaries for a three-year period beginning on the date of
Incurrence of any such Indebtedness. The amount of Indebtedness of any Person
at any date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence
of the contingency giving rise to the obligation, of any contingent obligations
at such date.

 

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

 

“Intangible Assets” means goodwill, patents,
trademarks and other intangibles as determined in accordance with GAAP.

 

“Interest Rate Agreement” means with respect to
any Person any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedge agreement or other similar agreement or arrangement as to which such
Person is party or a beneficiary.

 

“Investment” in any Person means any direct or
indirect advance, loan (other than advances to customers in the ordinary course
of business that are recorded as accounts receivable on the balance sheet of
the lender) or other extension of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of
cash or other property (excluding Capital Stock of the Company) to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other similar
instruments issued by such Person. For purposes of the definition of “Unrestricted
Subsidiary” and Section 4.04, (a) “Investment” shall include the portion
(proportionate to the Company’s equity interest in such Subsidiary) of the fair
market value of the net assets of any Subsidiary of the Company at the time
that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent “Investment”
in an Unrestricted Subsidiary in an amount (if positive) equal to (i) the
Company’s “Investment” in such Subsidiary at the time of such redesignation
less (ii) the portion (proportionate to the Company’s equity interest in such
Subsidiary) of the fair market value of the net assets of such Subsidiary at
the time of such redesignation; (b) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer, in each case as determined in good faith by (x) the senior
management of the Company

 

13

 

if the amount
thereof is less than $2.0 million and (y) the Board of Directors if in excess
thereof; and (c) the amount of any Investment shall be the original cost as of
the date of determination of such Investment plus the cost of all additional
Investments by the Company or any of its Restricted Subsidiaries, without any
adjustments for increases or decreases in value or write-ups, write-downs or
write-offs with respect to such Investments.

 

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

 

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

 

“Material Subsidiary” means, at any date of
determination, any Subsidiary of the Company that, together with its
Subsidiaries, (a) for the most recent fiscal year of the Company accounted for
more than 10.0% of the consolidated revenues of the Company or (b) as of the
end of such fiscal year, was the owner of 10.0% of the consolidated assets of
the Company, all as set forth on the most recently available consolidated
financial statement of the Company and its consolidated Subsidiaries for such
fiscal year prepared in conformity with GAAP.

 

“Net Available Cash” from an Asset Disposition
means cash payments received (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of any securities
received as consideration, but only as and when received, but excluding any
other consideration received in the form of assumption by the acquiring Person
of Indebtedness or other obligations relating to the properties or assets that
are the subject of such Asset Disposition or received in any other non-cash
form) therefrom, in each case net of (a) all legal, accounting, investment
banking, title and recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, provincial, foreign and local taxes
required to be paid or accrued as a liability under GAAP, as a consequence of
such Asset Disposition, (b) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with respect to
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law be repaid out of the
proceeds from such Asset Disposition, (c) all distributions and other payments
required to be made to minority interest holders in Subsidiaries or joint
ventures as a result of such Asset Disposition, (d) the decrease in proceeds
from Qualified Securitization Transactions which results from such Asset
Disposition and (e) appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with the
property or other assets disposed of in such Asset Disposition and retained by
the Company or any Restricted Subsidiary after such Asset Disposition.

 

“Net Cash Proceeds”, with respect to any issuance
or sale of Capital Stock, means the cash proceeds of such issuance or sale net
of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees,
discounts or commissions and brokerage, consultant and other fees and expenses
actually incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.

 

14

 

“Note Guarantee” means each Guarantee of the
obligations with respect to the Securities issued by a Person pursuant to the
terms of this Indenture.

 

“Note Guarantor” means any Person that has issued
a Note Guarantee.

 

“Officer” means the Chairman of the Board, the
Chief Executive Officer, the Chief Financial Officer, the President, any Vice
President, the Treasurer, the Secretary or any Assistant Secretary of the
Company.

 

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

 

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

 

“Permitted Business” means the design, manufacture
and/or marketing of films and flexible packaging products for food, personal
care, medical, retail, agricultural, industrial and other applications or any
businesses that are reasonably related, ancillary or complementary thereto.

 

“Permitted Holders” means each of (i) J.P. Morgan
Partners, LLC and its Affiliates, (ii) Southwest Industrial Films, LLC and its
Affiliates, (iii) the Existing Management Stockholders and their Related
Parties and (iv) any Person acting in the capacity of an underwriter in
connection with a public or private offering of the Company’s Capital Stock

 

“Permitted Investment” means an Investment by the
Company or any Restricted Subsidiary in: (a) the Company, a Restricted
Subsidiary or a Person that will, upon the making of such Investment, become a
Restricted Subsidiary; provided, however, that after giving effect to such
Investment the Company is still in compliance with Section 4.12; (b) another
Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Restricted Subsidiary; provided, however, that
after giving effect to such Investment the Company is still in compliance with
Section 4.12; (c) Temporary Cash Investments; (d) receivables owing to the
Company or any Restricted Subsidiary if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary
deems reasonable under the circumstances; (e) payroll, travel and similar
advances or loans to cover matters that are expected at the time of such
advances ultimately to be treated as expenses for accounting purposes and that
are made in the ordinary course of business; (f) loans or advances to officers,
directors, consultants or employees made (A) in the ordinary course of business
and not exceeding $3.0 million in any year or (B) to fund purchases of stock
under the Company’s stock incentive plan and any similar plans or employment
arrangements; (g) Capital Stock, obligations or other securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments or
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of a debtor; (h) any Person to the extent such
Investment represents the non- cash portion of the consideration received for
an Asset Disposition that was made pursuant to and in compliance with Section
4.06; (i) any Investment by the Company or a Restricted Subsidiary in a

 

15

 

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; (j) Hedging Obligations entered into in the ordinary
course of business; (k) endorsements of negotiable instruments and documents in
the ordinary course of business; (l) assets or securities of a Person acquired
by the Company or a Restricted Subsidiary to the extent the consideration for
such acquisition consists of Capital Stock (other than Disqualified Stock) of
the Company; (m) Investments in existence on the Closing Date; (n) Investments
of a Person or any of its Subsidiaries existing at the time such Person becomes
a Restricted Subsidiary of the Company or at the time such Person merges or
consolidates with the Company or any of its Restricted Subsidiaries, in either
case in compliance with this Indenture, provided that such Investments were not
made by such Person in connection with, or in anticipation or contemplation of,
such Person becoming a Restricted Subsidiary of the Company or such merger or
consolidation; (o) Investments in Unrestricted Subsidiaries or joint ventures
not to exceed $30.0 million since the 2004 Notes Original Issue Date plus (A)
the aggregate net after-tax amount returned since the 2004 Notes Original Issue
Date to the Company or any Restricted Subsidiary in cash on or with respect to
any Investments made since the 2004 Notes Original Issue Date in Unrestricted
Subsidiaries and joint ventures whether through interest payments, principal
payments, dividends or other distributions or payments (including such
dividends, distributions or payments made concurrently with such Investment),
(B) the net after-tax cash proceeds received since the 2004 Notes Original
Issue Date by the Company or any Restricted Subsidiary from the disposition of
all or any portion of such Investments (other than to the Company or a
Subsidiary of the Company), and (C) upon redesignation since the 2004 Notes
Original Issue Date of an Unrestricted Subsidiary as a Restricted Subsidiary,
the fair market value of such Subsidiary, provided that any amounts included
pursuant to the foregoing clauses (A), (B) and (C) are excluded from the
calculation set forth in clause (a)(iv)(3) under Section 4.04; and (p)
additional Investments since the 2004 Notes Original Issue Date in an aggregate
amount not to exceed $15.0 million.

 

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

 

“Preferred Stock”, as applied to the Capital Stock
of any Person, means Capital Stock of any class or classes (however designated)
that is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over Capital Stock of any other class of such Person.

 

“principal” of a Security means the principal of
the Security plus the premium, if any, payable on the Security which is due or
overdue or is to become due at the relevant time.

 

“Public Market” means any time after (a) an Equity
Offering has been consummated and (b) at least 15% of the total issued and
outstanding common stock of the Company has been distributed by means of an
effective registration statement under the Securities Act.

 

16

 

“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 pursuant to customary terms
to (a) a Securitization Entity (in the case of a transfer by the Company or any
of its Subsidiaries) and (b) any other Person (in the case of a transfer by a
Securitization Entity), or may grant a security interest in any accounts
receivable (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, all
contracts and contract rights and all guarantees or other obligations in
respect of such accounts receivable, proceeds of such accounts receivable 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.

 

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

 

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

 

“Refinancing Indebtedness” means Indebtedness that
is Incurred to Refinance any Indebtedness of the Company or any Restricted
Subsidiary existing on the 2000 Notes Closing Date or not prohibited by this
Indenture (including Indebtedness of the Company or a Restricted Subsidiary
that Refinances Refinancing Indebtedness); provided, however, that: (a) the
Refinancing Indebtedness (if Refinancing any Indebtedness existing on the 2000
Notes Closing Date) has a Stated Maturity no earlier than the Stated Maturity
of the Indebtedness being Refinanced, (b) the Refinancing Indebtedness (if
Refinancing any Indebtedness existing on the 2000 Notes Closing Date) has an
Average Life at the time such Refinancing Indebtedness is Incurred that is
equal to or greater than the Average Life of the Indebtedness being refinanced,
(c) such Refinancing Indebtedness is Incurred in an aggregate principal amount
(or if issued with original issue discount, an aggregate issue price) (whether in
U.S. dollars or a foreign currency) that is equal to or less than the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) (in U.S. dollars or such foreign currency, as applicable) then
outstanding (plus, without duplication, accrued interest, premium and
defeasance costs required to be paid under the terms of the Indebtedness being
Refinanced and the fees, expenses, discounts, commissions and other issuance
costs incurred in connection with the Refinancing Indebtedness) of the
Indebtedness being Refinanced and (d) if the Indebtedness being Refinanced is
subordinated in right of payment to the Securities or a Note Guarantee of a
Note Guarantor, such Refinancing Indebtedness is subordinated in right of
payment to the Securities or the Note Guarantee at least to the same extent as
the Indebtedness being Refinanced; provided further, however, that Refinancing
Indebtedness shall not include:  (i)
Indebtedness of a Restricted Subsidiary that is not a Note Guarantor that
Refinances Indebtedness of the Company or (ii) Indebtedness of the Company or a
Restricted Subsidiary that Refinances Indebtedness of an Unrestricted
Subsidiary.

 

“Related Parties” means with respect to a Person
(a) that is a natural person (1) any spouse, parent or lineal descendant
(including adopted children) of such Person or (2) the

 

17

 

estate of such
Person during any period in which such estate holds Capital Stock of the
Company for the benefit of any person referred to in clause (a)(1) and (b) any
trust, corporation, partnership, limited liability company or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially owning an
interest of more than 50% of which consist of such Person and/or such other
Persons referred to in the immediately preceding clause (a).

 

“Representative” means the trustee, agent or representative
(if any) for an issue of Senior Indebtedness.

 

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

 

“Restricted Investment” means any Investment other
than a Permitted Investment.

 

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

 

“Sale/Leaseback Transaction” means an arrangement
relating to property now owned or hereafter acquired by the Company or a
Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers
such property to a Person and the Company or such Restricted Subsidiary leases
it from such Person, other than (a) leases between the Company and a Wholly
Owned Subsidiary or between Wholly Owned Subsidiaries or (b) any arrangement
whereby the transfer involves fixed or capital assets and is consummated within
120 days after the date the Company or a Restricted Subsidiary acquires or
finishes construction of such fixed or capital assets.

 

“SEC” means the Securities and Exchange
Commission.

 

“Secured Indebtedness” means any Indebtedness of
the Company secured by a Lien. “Secured Indebtedness” of a Note Guarantor has a
correlative meaning.

 

“Securities” means the Securities issued under
this Indenture.

 

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

 

“Securitization Entity” means a Wholly Owned
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 transfers accounts receivable 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 below) as a Securitization Entity (a) no
portion of the Indebtedness or any other obligations (contingent or otherwise)
of which (i) is guaranteed by the Company or any Subsidiary of the Company
(excluding guarantees of obligations (other than the principal of, and

 

18

 

interest on,
Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates the Company or any Subsidiary of the Company in any
way other than pursuant to Standard Securitization Undertakings or (iii)
subjects any property or asset of the Company or any Subsidiary of the Company,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to Standard Securitization Undertakings, (b) with which
neither the Company nor any Subsidiary of the Company has any material
contract, agreement, arrangement or understanding other than on terms 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 (c) 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
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 giving effect to
such designation and an Officers’ Certificate certifying that such designation
complied with the foregoing conditions.

 

“Senior Indebtedness” of the Company or any Note
Guarantor, as the case may be, means the principal of, premium (if any) and
accrued and unpaid interest on (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization of the Company or
any Note Guarantor, as applicable, regardless of whether or not a claim for
post-filing interest is allowed in such proceedings), and fees and all other
amounts owing in respect of, Bank Indebtedness, Indebtedness under the 2003
Notes Indenture, Indebtedness under the 2004 Notes Indenture and all other
Indebtedness of the Company or any Note Guarantor, as applicable, whether
outstanding on the Closing Date or thereafter Incurred, unless in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding it is provided that such obligations are not superior in right of
payment to the Securities or such Note Guarantor’s Note Guarantee, provided,
however, that Senior Indebtedness shall not include:  (a) any obligation of the Company to any
Subsidiary of the Company or of any Note Guarantor to the Company or any other
Subsidiary of the Company, (b) any liability for Federal, state, local or other
taxes owed or owing by the Company or any Note Guarantor, (c) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including Guarantees thereof or instruments evidencing such
liabilities), (d) except with respect to any Indebtedness Incurred pursuant to
the Credit Agreement, any Indebtedness or obligation of the Company or any Note
Guarantor (and any accrued and unpaid interest in respect thereof) that by its
terms is subordinate or junior in right of payment to any other Indebtedness or
obligation of the Company or such Note Guarantor, as applicable, including any
Senior Subordinated Indebtedness and any Subordinated Obligations, (e) any
obligations with respect to any Capital Stock or (f) any Indebtedness Incurred
in violation of this Indenture, unless such Indebtedness was Incurred based on
an Officers’ Certificate of the Company (delivered in good faith after
reasonable investigation) to the effect that the Incurrence of such
Indebtedness did not violate the provisions of this Indenture.

 

“Senior Subordinated Indebtedness” of the Company
means the Securities and any other Indebtedness of the Company that
specifically provides that such Indebtedness is to rank pari passu with the
Securities in right of payment and is not subordinated by its terms in right of
payment to any Indebtedness or other obligation of the Company which is not
Senior

 

19

 

Indebtedness. “Senior
Subordinated Indebtedness” of a Note Guarantor has a correlative meaning.

 

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

 

“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 securitization transaction.

 

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

 

“Stockholders Agreement” means the Stockholders
Agreement among the Company and the holders of the Company’s Capital Stock
party thereto, as in effect at the Closing Date and as amended from time to
time, so long as the Permitted Holders own a majority of the Capital Stock
subject to such agreement.

 

“Subordinated Obligation” means any Indebtedness
of the Company (whether outstanding on the Closing Date or thereafter Incurred)
that is subordinate or junior in right of payment to the Securities pursuant to
a written agreement. “Subordinated Obligation” of a Note Guarantor has a
correlative meaning.

 

“Subsidiary” of any Person means any corporation,
association, partnership, limited liability company or other business entity of
which more than 50% of the total voting power of shares of Capital Stock or
other interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
representatives, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (a) such Person, (b) such Person and one
or more Subsidiaries of such Person or (c) one or more Subsidiaries of such
Person.

 

“Tangible Assets” means Total Assets less
Intangible Assets.

 

“Temporary Cash Investments” means any of the
following: (a) any investment in direct obligations of the United States of
America or any agency or instrumentality thereof or obligations Guaranteed or
insured by the United States of America or any agency or instrumentality
thereof, (b) investments in checking accounts, savings accounts, time deposit
accounts, certificates of deposit, bankers’ acceptances and money market
deposits maturing within 360 days of the date of acquisition thereof issued by
a bank or trust company that is organized under the laws of the United States
of America, any state thereof or any foreign country recognized by the United
States of America having capital, surplus and undivided profits aggregating in
excess of $250,000,000 (or the foreign currency equivalent thereof) and whose
long-term debt is rated “A” (or such similar equivalent rating) or higher by at
least one nationally

 

20

 

recognized
statistical rating organization (as defined in Rule 436 under the Securities
Act), (c) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (a) above entered into
with a bank meeting the qualifications described in clause (b) above, (d)
investments in commercial paper, maturing not more than 270 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America or any foreign country recognized by the United States of America with
a rating at the time as of which any investment therein is made of “P-1” (or
higher) according to Moody’s Investors Service, Inc. or “A-1” (or higher)
according to Standard and Poor’s Ratings Service, a division of The McGraw-Hill
Companies, Inc. (“S&P”), (e) investments in securities with maturities of
six months or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least “A” by
S&P or “A” by Moody’s Investors Service, Inc. and (f) investments in money
market funds that invest substantially all of their assets in securities of the
types described in clauses (a) through (e) above.

 

“TIA” means the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the Closing Date.

 

“Total Assets” means the total consolidated assets
of the Company and its Restricted Subsidiaries, as shown on the most recent
balance sheet of the Company.

 

“Trade Payables” means, with respect to any
Person, any accounts payable or any indebtedness or monetary obligation to
trade creditors created, assumed or Guaranteed by such Person arising in the
ordinary course of business in connection with the acquisition of goods or
services.

 

“Treasury
Rate” means, as of any redemption date, the yield to maturity as of such
redemption date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15 (519) that has become publicly available at least two business
days prior to the redemption date (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) equal to the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year.

 

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

 

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

 

21

 

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

 

“Unrestricted Subsidiary” means (a) any Subsidiary
of the Company that at the time of determination shall be designated an
Unrestricted Subsidiary by the Board of Directors in the manner provided below
and (b) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors
may designate any Subsidiary of the Company (including any newly acquired or
newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless
such Subsidiary or any of its Subsidiaries owns any Capital Stock in or
Indebtedness of, or owns or holds any Lien on any property of, the Company or
any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary
to be so designated; provided, however, that either (i) the Subsidiary to be so
designated at the time of designation has total Consolidated assets of $1,000
or less or (ii) if such Subsidiary has Consolidated assets greater than $1,000,
then such designation would be permitted under Section 4.04. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (a) the Company could Incur $1.00 of additional Indebtedness under
Section 4.03(a) and (b) no Default shall have occurred and be continuing. Any
such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted
Subsidiary by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the foregoing provisions.

 

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

 

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

 

“Wholly Owned Subsidiary” means a Restricted
Subsidiary of the Company all the Capital Stock of which (other than directors’
qualifying Capital Stock) is owned by the Company or another Wholly Owned
Subsidiary.

 

SECTION 1.02                    Other Definitions.

 

Defined in Term

 

	
  “Affiliate Transaction”

  	
   

  	
  4.07(a)

  
	
  “Appendix”

  	
   

  	
  Preamble

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	
  “Blockage Notice”

  	
   

  	
  10.03

  
	
  “Change of Control Offer”

  	
   

  	
  4.08(b)

  
	
  “covenant defeasance option”

  	
   

  	
  8.01(b)

  

 

22

 

	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Definitive Securities”

  	
   

  	
  Appendix A

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Global Securities”

  	
   

  	
  Appendix A

  
	
  “Guarantee Blockage Notice”

  	
   

  	
  12.03

  
	
  “Guarantee Payment Blockage Period”

  	
   

  	
  12.03

  
	
  “Guaranteed Obligations”

  	
   

  	
  11.01

  
	
  “incorporated provision”.

  	
   

  	
  13.01

  
	
  “legal defeasance option”

  	
   

  	
  8.01(b)

  
	
  “Legal Holiday”

  	
   

  	
  13.08

  
	
  “Notice of Default”

  	
   

  	
  6.01

  
	
  “Offer”

  	
   

  	
  4.06(b)

  
	
  “Offer Amount”

  	
   

  	
  4.06(c)(ii)

  
	
  “Offer Period”

  	
   

  	
  4.06(c)(ii)

  
	
  “pay its Guarantee”

  	
   

  	
  12.03

  
	
  “pay the Securities”

  	
   

  	
  10.03

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Blockage Period”.

  	
   

  	
  10.03

  
	
  “protected purchaser”

  	
   

  	
  2.07

  
	
  “Purchase Date”

  	
   

  	
  4.06(c)(i)

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted Payment”.

  	
   

  	
  4.04(a)

  
	
  “Securities Custodian”

  	
   

  	
  Appendix A

  
	
  “Successor Company”

  	
   

  	
  5.01(a)

  

 

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

 

“Commission” means the SEC.

 

“indenture securities” means the Securities and
the Note Guarantees.

 

“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, the Note Guarantors and any other obligor on the indenture securities.

 

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

 

SECTION 1.04                    Rules of Construction. Unless the context
otherwise requires:

 

23

 

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

 

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

 

(c)                                  “or”
is not exclusive;

 

(d)                                 “including”
means including without limitation;

 

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

 

(f)                                    unsecured
Indebtedness shall not be deemed to be subordinate or junior to Secured
Indebtedness merely by virtue of its nature as unsecured indebtedness;

 

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

 

(h)                                 the
principal amount of any Preferred Stock shall be (i) the maximum liquidation
value of such Preferred Stock or (ii) the maximum mandatory redemption or
mandatory repurchase price (not including, in either case, any redemption or
repurchase premium) with respect to such Preferred Stock, whichever is greater.

 

ARTICLE 2

 

The Securities

 

SECTION 2.01                    Form and Dating. Provisions relating to the
Securities are set forth in the Appendix, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities and the Trustee’s
certificate of authentication shall each be substantially in the form of
Exhibit A hereto, which is hereby incorporated in and expressly made a part of
this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company or any
Note Guarantor is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). Each Security
shall be dated the date of its authentication. The Securities shall be issuable
only in registered form without interest coupons and only in denominations of
$1,000 and integral multiples thereof; provided, that the aggregate principal
amount of the Securities issued on the date of original issuance shall not
exceed $24,000,000.

 

SECTION 2.02                    Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature.

 

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

 

24

 

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

 

The Trustee
shall authenticate and make available for delivery Securities as set forth in
the Appendix.

 

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

 

SECTION 2.03                    Registrar and Paying Agent. (a)  The Company shall maintain an office or
agency where Securities may be presented for registration of transfer or for
exchange (the “Registrar”) and an office or agency where Securities may be
presented for payment (the “Paying Agent”). The Registrar shall keep a register
of the Securities and of their transfer and exchange. The Company may have one
or more co-registrars and one or more additional paying agents. The term “Paying
Agent” includes any additional paying agent, and the term “Registrar” includes
any co-registrars. The Company initially appoints the Trustee as (i) Registrar
and Paying Agent in connection with the Securities and (ii) the Securities
Custodian with respect to the Global Securities.

 

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

 

(c)                                  The
Company may remove any Registrar or Paying Agent upon written notice to such
Registrar or Paying Agent and to the Trustee; provided, however, that no such
removal shall become effective until (i) acceptance of an appointment by a
successor as evidenced by an appropriate agreement entered into by the Company
and such successor Registrar or Paying Agent, as the case may be, and delivered
to the Trustee or (ii) notification to the Trustee that the Trustee shall serve
as Registrar or Paying Agent until the appointment of a successor in accordance
with clause (i) above. The Registrar or Paying Agent may resign at any time
upon written notice to the Company and the Trustee.

 

SECTION 2.04                    Paying Agent to Hold Money in Trust. Prior to
each due date of the principal of and interest on any Security, the Company
shall deposit with the Paying Agent (or if the Company or a Wholly Owned
Subsidiary is acting as Paying Agent, segregate and hold in trust for the
benefit of the Persons entitled thereto) a sum sufficient to pay such principal
and interest when so becoming due. The Company shall require each Paying Agent

 

25

 

(other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal of and
interest on the Securities, and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary of the
Company acts as Paying Agent, it shall segregate the money held by it as Paying
Agent and hold it as a separate trust fund. The Company at any time may require
a Paying Agent to pay all money held by it to the Trustee and to account for
any funds disbursed by the Paying Agent. Upon complying with this Section, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.

 

SECTION 2.05                    Holder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders. If the Trustee is not the Registrar,
the Company shall furnish, or cause the Registrar to furnish, to the Trustee,
in writing at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of Holders.

 

SECTION 2.06                    Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of
a Security for registration of transfer and in compliance with the Appendix. When
a Security is presented to the Registrar with a request to register a transfer,
the Registrar shall register the transfer as requested if its requirements
therefor are met. When Securities are presented to the Registrar with a request
to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. To permit registration of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar’s request. The Company may require payment of a sum sufficient to pay
all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section. The Company shall not be
required to make and the Registrar need not register transfers or exchanges of
Securities selected for redemption (except, in the case of Securities to be
redeemed in part, the portion thereof not to be redeemed) or any Securities for
a period of 15 days before a selection of Securities to be redeemed.

 

Prior to the
due presentation for registration of transfer of any Security, the Company, the
Note Guarantors, the Trustee, the Paying Agent, and the Registrar may deem and
treat the Person in whose name a Security is registered as the absolute owner
of such Security for the purpose of receiving payment of principal of and
(subject to paragraph 2 of the Securities) interest, if any, on such Security
and for all other purposes whatsoever, whether or not such Security is overdue,
and none of the Company, any Note Guarantor, the Trustee, the Paying Agent, or
the Registrar shall be affected by notice to the contrary.

 

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

 

26

 

All Securities
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 Securities surrendered upon such transfer or exchange.

 

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

 

SECTION 2.07                    Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements
of Section 8-405 of the Uniform Commercial Code are met, such that the Holder
(a) satisfies the Company or the Trustee within a reasonable time after such
Holder has notice of such loss, destruction or wrongful taking and the
Registrar does not register a transfer prior to receiving such notification,
(b) makes such request to the Company or the Trustee prior to the Security
being acquired by a protected purchaser as defined in Section 8-303 of the
Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other
reasonable requirements of the Trustee. If required by the Trustee or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Trustee to protect the Company, the Trustee, the Paying Agent and the
Registrar from any loss that any of them may suffer if a Security is replaced. The
Company and the Trustee may charge the Holder for their expenses in replacing a
Security. In the event any such mutilated, lost, destroyed or wrongfully taken
Security has become or is about to become due and payable, the Company in its
discretion may pay such Security instead of issuing a new Security in
replacement thereof.

 

Every
replacement Security is an additional obligation of the Company.

 

The provisions
of this Section 2.07 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of
mutilated, lost, destroyed or wrongfully taken Securities.

 

SECTION 2.08                    Outstanding Securities. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. Subject to Section 13.06, a Security does not
cease to be outstanding because the Company or an Affiliate of the Company
holds the Security.

 

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

 

27

 

If the Paying
Agent segregates and holds in trust, in accordance with this Indenture, on a
redemption date or maturity date money sufficient to pay all principal and
interest payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, and the Paying Agent
is not prohibited from paying such money to the Holders on that date pursuant
to the terms of this Indenture, then on and after that date such Securities (or
portions thereof) cease to be outstanding and interest on them ceases to
accrue.

 

SECTION 2.09                    Temporary Securities. In the event that
Definitive Securities are to be issued under the terms of this Indenture, until
such Definitive Securities are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Securities. Temporary Securities shall
be substantially in the form of Definitive Securities but may have variations
that the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate Definitive Securities and deliver them in exchange for temporary
Securities upon surrender of such temporary Securities at the office or agency
of the Company, without charge to the Holder.

 

SECTION 2.10                    Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel all Securities surrendered for registration of transfer, exchange,
payment or cancelation and shall dispose of canceled Securities in accordance
with its customary procedures or deliver canceled Securities to the Company
pursuant to written direction by an Officer. The Company may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation. The Trustee shall not authenticate Securities in
place of canceled Securities other than pursuant to the terms of this
Indenture.

 

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

 

SECTION 2.12                    CUSIP and ISIN Numbers. The Company in issuing
the Securities may use “CUSIP” and “ISIN” numbers (if then generally in use)
and, if so, the Trustee shall use “CUSIP” and “ISIN” numbers in notices of
redemption as a convenience to Holders; provided, however, that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the CUSIP number.

 

28

 

ARTICLE 3

 

Redemption

 

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

 

The Company
shall give each notice to the Trustee provided for in this Section at least 60
days before the redemption date unless the Trustee consents in writing to a
shorter period. Such notice shall be accompanied by an Officers’ Certificate
from the Company to the effect that such redemption will comply with the
conditions herein. Any such notice may be canceled at any time prior to notice
of such redemption being mailed to any Holder and shall thereby be void and of
no effect.

 

SECTION 3.02                    Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that the Trustee in
its sole discretion shall deem to be fair and appropriate. The Trustee shall
make the selection from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Securities and portions
of them the Trustee selects shall be in amounts of $1,000 or a whole multiple
of $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the method it has chosen for the
selection of Securities or portions of Securities to be called for redemption.

 

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

 

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

 

(i)                                     the
redemption date;

 

(ii)                                  the
redemption price (or, in the case of any redemption date occurring prior to
June 14, 2008, the applicable formula for calculating the redemption price) and
the amount of accrued interest to the redemption date;

 

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

 

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

 

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

 

29

 

(vi)                              that,
unless the Company defaults in making such redemption payment or the Paying
Agent is prohibited from making such payment pursuant to the terms of this
Indenture, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;

 

(vii)                           the
CUSIP or ISIN number, if any, printed on the Securities being redeemed; and

 

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

 

(b)                                 At
the Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at the Company’s expense. In such event, the Company shall
provide the Trustee with the information required by this Section.

 

SECTION 3.04                    Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date; provided,
however, that if the redemption date is after a regular record date and on or
prior to the interest payment date, the accrued interest shall be payable to
the Holder of the redeemed Securities registered on the relevant record date. Failure
to give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.

 

SECTION 3.05                    Deposit of Redemption Price. Prior to 11:00 a.m.,
New York City time, on the redemption date, the Company shall deposit with the
Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying
Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued interest on all Securities or portions thereof
to be redeemed on that date other than Securities or portions of Securities
called for redemption that have been delivered by the Company to the Trustee
for cancellation. Concurrently with such deposit, the Company shall deliver an
Officers’ Certificate and an Opinion of Counsel to the effect that the
redemption complies with the conditions contained in this Indenture. On and
after the redemption date, interest shall cease to accrue on Securities or
portions thereof called for redemption so long as the Company has deposited
with the Paying Agent funds sufficient to pay the principal of, plus accrued
and unpaid interest on, the Securities to be redeemed, unless the Paying Agent
is prohibited from making such payment pursuant to the terms of this Indenture.

 

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

 

30

 

ARTICLE 4

 

Covenants

 

SECTION 4.01                    Payment of Securities. The Company shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and interest
shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay
all principal and interest then due and the Trustee or the Paying Agent, as the
case may be, is not prohibited from paying such money to the Holders on that
date pursuant to the terms of this Indenture.

 

The Company
shall pay interest on overdue principal at the rate borne by the Securities,
and it shall pay interest on overdue installments of interest at the same rate
to the extent lawful.

 

SECTION 4.02                    SEC Reports. Notwithstanding that the Company may
not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the SEC (if permitted by SEC practice
and applicable law and regulations) and provide the Trustee and Holders and
prospective Holders (upon request) within 15 days after it files them with the
SEC (or if not permitted, within 15 days after it would have otherwise been
required to file them with the SEC), copies of the Company’s annual report and
the information, documents and other reports that are specified in Sections 13
and 15(d) of the Exchange Act. In addition, following the existence of a Public
Market, the Company shall furnish to the Trustee and the Holders, promptly upon
their becoming available, copies of the annual report to shareholders and any
other information provided by the Company to its shareholders generally. At any
time that the Company is not subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act and any Securities remain outstanding, the
Company agrees to provide to Holders and prospective Holders (upon request) the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act to the extent not otherwise included in the information provided
pursuant to the first sentence of this Section 4.02. The Company also shall
comply with the other provisions of Section 314(a) of the TIA.

 

Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).

 

SECTION 4.03                    Limitation on Indebtedness. (a)  The Company shall not, and shall not permit
any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Company or any Restricted Subsidiary that is a Note
Guarantor may Incur Indebtedness if on the date of such Incurrence and after
giving effect thereto the Consolidated Coverage Ratio would be greater than
2.25:1.00.

 

(b)                                 Notwithstanding
Section 4.03(a), the Company and its Restricted Subsidiaries may Incur the
following Indebtedness:

 

(i)                                     Indebtedness
Incurred pursuant to the Credit Agreement in an aggregate principal amount not
to exceed $100.0 million at any one time outstanding less the

 

31

 

aggregate
amount of (1) all repayments of principal of such Indebtedness pursuant to
Section 4.06 and (2) the aggregate principal amount of Indebtedness Incurred
and at such time outstanding pursuant to Section 4.03(b)(ix);

 

(ii)                                  Indebtedness
of the Company owed to and held by any Restricted Subsidiary or Indebtedness of
a Restricted Subsidiary owed to and held by the Company or any Restricted
Subsidiary; provided, however, that (1) any subsequent issuance or transfer of
any Capital Stock or any other event that results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of
any such Indebtedness (except to the Company or a Restricted Subsidiary) shall
be deemed, in each case, to constitute the Incurrence of such Indebtedness by
the issuer thereof, (2) if the Company is the obligor on such Indebtedness,
such Indebtedness is expressly subordinated to the prior payment in full in
cash of all obligations with respect to the Securities, (3) if a Restricted
Subsidiary is the obligor on such Indebtedness, such Indebtedness is made
pursuant to an intercompany note and (4) if a Note Guarantor is the obligor on
such Indebtedness and the Company is not the obligee, such Indebtedness is
subordinated in right of payment to the Note Guarantee of such Note Guarantor;

 

(iii)                               Indebtedness
(1) represented by the Securities and the Note Guarantees with respect thereto,
(2) outstanding on the 2004 Notes Closing Date (other than the Indebtedness
described in clauses (i) and (ii) above) including, without limitation, the
2003 Notes and the 2004 Notes and any additional securities, regardless of when
issued, in lieu of payment of interest thereon, (3) consisting of Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this clause
(iii) (including Refinancing Indebtedness) or Section 4.03(a) and (4)
consisting of Guarantees of any Indebtedness otherwise permitted by the terms
of this Indenture;

 

(iv)                              (1)
Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to
the date on which such Restricted Subsidiary was acquired by the Company (other
than Indebtedness Incurred as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the transaction
or series of related transactions pursuant to which such Restricted Subsidiary
became a Subsidiary of or was otherwise acquired by the Company) and (2)
Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of
Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause
(iv);

 

(v)                                 Indebtedness
of the Company or a Restricted Subsidiary (1) in respect of performance bonds,
bankers’ acceptances, letters of credit and surety or appeal bonds provided by
the Company and the Restricted Subsidiaries in the ordinary course of their
business, and (2) under Commodity Agreements, Interest Rate Agreements and
Currency Agreements entered into for bona fide hedging purposes of the Company
or any Restricted Subsidiary in the ordinary course of business; provided,
however, that such Interest Rate Agreements or Currency Agreements do not
increase the principal amount of Indebtedness of the Company and its Restricted
Subsidiaries outstanding at any time other than as a result of fluctuations in
interest rates or foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;

 

32

 

(vi)                              Indebtedness
(including Capitalized Lease Obligations and Attributable Debt) Incurred by the
Company or any of its Restricted Subsidiaries to finance the purchase, lease or
improvement of property (real or personal), equipment or other assets (in each
case whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets); provided that the aggregate principal amount of all
Indebtedness Incurred pursuant to this clause (vi) and all Refinancing
Indebtedness Incurred to refund, refinance or replace any Indebtedness Incurred
pursuant to this clause (vi) at any time outstanding, does not exceed the
greater of (x) 5.0% of Tangible Assets and (y) $30.0  million;

 

(vii)                           Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument drawn against insufficient funds in the ordinary
course, provided that such Indebtedness is extinguished within five Business
Days of Incurrence;

 

(viii)                        Indebtedness
of the Company and its Restricted Subsidiaries arising from agreements of the
Company or a Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary of the
Company in accordance with the terms of the Indenture, other than Guarantees by
the Company or any Restricted Subsidiary of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or a Subsidiary of the
Company for the purpose of financing such acquisition; provided, however, that
the maximum aggregate liability in respect of all such Indebtedness shall not
exceed the gross proceeds, including the fair market value as determined in
good faith by a majority of the Board of Directors of noncash proceeds (the
fair market value of such noncash proceeds being measured at the time it is
received and without giving effect to any subsequent changes in value),
actually received by the Company and its Restricted Subsidiaries in connection
with such disposition;

 

(ix)                                the
Incurrence by a Securitization Entity of Indebtedness in a Qualified
Securitization Transaction that is not recourse to the Company or any
Restricted Subsidiary of the Company (except for Standard Securitization
Undertakings) in an aggregate principal amount, together with the aggregate
principal amount of Indebtedness Incurred and at such time outstanding pursuant
to Section 4.03(b)(i), not to exceed $100.0 million at any one time
outstanding, less the aggregate amount of all repayments of all principal of
Indebtedness Incurred pursuant to Section 4.03(b)(i) pursuant to Section 4.06;

 

(x)                                   Indebtedness
of Foreign Subsidiaries; provided that the aggregate outstanding amount of
Indebtedness incurred by such Foreign Subsidiaries under this clause (x) does
not exceed at any one time an amount equal to the sum of (1) 80% of the
consolidated book value of the accounts receivable of all Foreign Subsidiaries
and (2) 60% of the consolidated book value of the inventory of all Foreign
Subsidiaries;

 

(xi)                                Indebtedness
under any Domestic Overdraft Facility; or

 

33

 

(xii)                             Indebtedness
of the Company and its Restricted Subsidiaries (in addition to Indebtedness
permitted to be Incurred pursuant to Section 4.03(a) or any other clause of
this Section 4.03(b)); provided that the aggregate principal amount on the date
of Incurrence, when added to all other Indebtedness Incurred pursuant to this
clause (xii) and then outstanding, shall not exceed $20.0 million.

 

(c)                                  Notwithstanding
the foregoing, the Company shall not incur any Indebtedness pursuant to Section
4.03(b) above if the proceeds thereof are used, directly or indirectly, to
repay, prepay, redeem, defease, retire, refund or refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the Securities to
at least the same extent as such Subordinated Obligations. The Company shall
not Incur any Indebtedness pursuant to Section 4.03(a) or 4.03(b) if such
Indebtedness is subordinate or junior in right of payment to any Senior
Indebtedness unless such Indebtedness is Incurred pursuant to the Credit
Agreement or is Senior Subordinated Indebtedness or is expressly subordinated
in right of payment to Senior Subordinated Indebtedness. In addition, the
Company shall not Incur any Secured Indebtedness which is not Senior
Indebtedness unless contemporaneously therewith effective provision is made to
secure the Securities equally and ratably with (or on a senior basis to, in the
case of Indebtedness subordinated in right of payment to the Securities) such
Secured Indebtedness for so long as such Secured Indebtedness is secured by a
Lien, except for Senior Subordinated Indebtedness and Subordinated Obligations
secured by Liens on the assets of any entity existing at the time such entity
is acquired by, and becomes a Restricted Subsidiary of, the Company, whether by
merger, consolidation, purchase of assets or otherwise, provided that such
Liens (x) are not created, incurred or assumed in connection with, or in
contemplation of such entity being acquired by the Company and (y) do not
extend to any other assets of the Company or any of its Subsidiaries. A Note
Guarantor may not Incur any Indebtedness if such Indebtedness is by its terms
expressly subordinate or junior in right of payment to any Senior Indebtedness
of such Note Guarantor unless such Indebtedness is Incurred pursuant to the
Credit Agreement or is Senior Subordinated Indebtedness of such Note Guarantor
or is expressly subordinated in right of payment to Senior Subordinated
Indebtedness of such Note Guarantor. In addition, a Note Guarantor shall not
Incur any Secured Indebtedness that is not Senior Indebtedness of such Note
Guarantor unless contemporaneously therewith effective provision is made to
secure the Note Guarantee of such Note Guarantor equally and ratably with (or
on a senior basis to, in the case of Indebtedness subordinated in right of
payment to such Note Guarantee) such Secured Indebtedness for as long as such
Secured Indebtedness is secured by a Lien, except for Senior Subordinated
Indebtedness and Subordinated Obligations of such Note Guarantor secured by
Liens on the assets of any entity existing at the time such entity is acquired
by such Note Guarantor, whether by merger, consolidation, purchase of assets or
otherwise, provided that such Liens (x) are not created, incurred or assumed in
connection with or in contemplation of such assets being acquired by such Note
Guarantor and (y) do not extend to any other assets of the Company or any of
its Subsidiaries.

 

(d)                                 Notwithstanding
any other provision of this Section 4.03, the maximum amount of Indebtedness
that the Company or any Restricted Subsidiary may Incur pursuant to this
Section shall not be deemed to be exceeded solely as a result of fluctuations
in the exchange rates of currencies. For purposes of determining the
outstanding principal amount of any particular Indebtedness Incurred pursuant
to this Section 4.03, (i) Indebtedness Incurred pursuant to the Credit
Agreement prior to or on the Closing Date shall be treated as Incurred pursuant
to

 

34

 

Section 4.03(b)(i) to the extent of
availability thereunder, (ii) Guarantees of, or obligations in respect of
letters of credit relating to, Indebtedness which is otherwise included in the
determination of a particular amount of Indebtedness shall not be included,
(iii) if obligations in respect of letters of credit are Incurred pursuant to
the Credit Agreement and are being treated as Incurred pursuant to Section
4.03(b)(i) and the letters of credit relate to other Indebtedness, then such
other Indebtedness shall not be included, (iv) the principal amount of any
Disqualified Stock of the Company or a Restricted Subsidiary or Preferred Stock
of a Restricted Subsidiary that is not a Note Guarantor will be equal to the
greater of the maximum mandatory redemption or repurchase price (not including,
in either case, any redemption or repurchase premium) or the maximum
liquidation preference, (v) the principal amount of Indebtedness, Disqualified
Stock of the Company or a Restricted Subsidiary or Preferred Stock of a
Restricted Subsidiary that is not a Note Guarantor issued at a price less than
the principal amount thereof, the maximum fixed redemption or repurchase price
thereof or liquidation preference thereof, as applicable, will be equal to the
amount of the liability or obligation in respect thereof determined in
accordance with GAAP, (vi) if such Indebtedness is denominated in a currency
other than U.S. dollars, the U.S. dollar equivalent principal amount thereof
shall be calculated based on the relevant currency exchange rates in effect on
the date such Indebtedness was Incurred, (vii) the accrual of interest, accrual
of dividends, the accretion of accreted value, the payment of interest in the
form of additional Indebtedness and the payment of dividends or distributions
in the form of additional Capital Stock shall not be deemed an Incurrence of
Indebtedness for purposes of this Section 4.03, (viii) Indebtedness permitted
by this Section 4.03 need not be permitted solely by reference to one provision
permitting such Indebtedness but may be permitted in part by one such provision
and in part by one or more other provisions of this Section permitting such
Indebtedness, and (ix) in the event that Indebtedness meets the criteria of
more than one of the types of Indebtedness described in this Section 4.03, the
Company, in its sole discretion, shall classify (or later reclassify) such
Indebtedness and only be required to include the amount of such Indebtedness in
one of such clauses.

 

SECTION 4.04                    Limitation on Restricted Payments. (a)  The Company shall not, and shall not permit
any Restricted Subsidiary, directly or indirectly, to (i) declare or pay any
dividend or make any distribution of any kind on or in respect of its Capital
Stock (including any payment in connection with any merger or consolidation
involving the Company) or similar payment to the holders (solely in their
capacities as such) of its Capital Stock except dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and except
dividends or distributions payable to the Company or another Restricted
Subsidiary (and, if such Restricted Subsidiary has shareholders other than the
Company or other Restricted Subsidiaries, to its other shareholders on a pro
rata basis), (ii) purchase, redeem, retire or otherwise acquire for value any
Capital Stock of the Company or any Restricted Subsidiary held by Persons other
than the Company or another Restricted Subsidiary, (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment any
Subordinated Obligations (other than (1) the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each
case due within one year of the date of acquisition and (2) Indebtedness
Incurred pursuant to Section 4.03(b)(ii)) or (iv) make any Investment (other
than a Permitted Investment) in any Person (any such dividend, distribution,
purchase, redemption, repurchase, defeasance, other acquisition,

 

35

 

retirement or Investment being herein
referred to as a “Restricted Payment”) if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment:

 

(1)                                  a
Default shall have occurred and be continuing (or would result therefrom);

 

(2)                                  the
Company could not Incur at least $1.00 of additional Indebtedness under Section
4.03(a); or

 

(3)                                  the
aggregate amount of such Restricted Payment and all other Restricted Payments
(the amount so expended, if other than in cash, to be determined in good faith
by the Board of Directors, whose determination shall be conclusive and
evidenced by a resolution of the Board of Directors) declared or made
subsequent to the Closing Date would exceed the sum, without duplication, of:

 

(A)                              50% of the Consolidated
Net Income accrued during the period (treated as one accounting period) from
the beginning of the fiscal quarter immediately following the fiscal quarter
during which the Closing Date occurred to the end of the most recent fiscal
quarter ending prior to the date of such Restricted Payment for which
consolidated financial statements of the Company are publicly available (or, in
case such Consolidated Net Income shall be a deficit, minus 100% of such
deficit);

 

(B)                                100% of the aggregate
Net Cash Proceeds (other than in respect of an Excluded Contribution) received
by the Company (x) as capital contributions to the Company after the Closing
Date or (y) from the issue or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Closing Date (other than a capital
contribution from or an issuance or sale to (a) a Subsidiary of the Company or
(b) an employee equity ownership or participation plan or other trust
established by the Company or any of its Subsidiaries);

 

(C)                                100% of the fair market
value (as determined in good faith by the Board of Directors of the Company) of
shares of Qualified Stock of the Company or any Restricted Subsidiary issued
after the Closing Date to acquire assets from a third party;

 

(D)                               the amount by which
Indebtedness of the Company or its Restricted Subsidiaries is reduced on the
Company’s balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Closing Date of any Indebtedness
of the Company or its Restricted Subsidiaries issued after the Closing Date
which is convertible or exchangeable for Capital Stock (other than Disqualified
Stock) of the Company (less the amount of any cash or the fair market value of
other property distributed by the Company or any Restricted Subsidiary upon
such conversion or exchange);

 

(E)                                 100% of the aggregate
amount received by the Company or any Restricted Subsidiary in cash from the
sale or other disposition (other than to (x) the Company or a Subsidiary of the
Company or (y) an employee equity

 

36

 

ownership or participation plan or other trust established by the
Company or any of its Subsidiaries) of Restricted Investments made by the
Company or any Restricted Subsidiary after the Closing Date and from
repurchases and redemptions of such Restricted Investments from the Company or
any Restricted Subsidiary by any Person (other than (x) the Company or any of
its Subsidiaries or (y) an employee equity ownership or participation plan or
other trust established by the Company or any of its Restricted Subsidiaries)
and from repayments of loans or advances which constituted Restricted
Investments;

 

(F)                                 the amount equal to
the net reduction in Investments in Unrestricted Subsidiaries since the Closing
Date resulting from (x) payments of dividends, repayments of the principal of
loans or advances or other transfers of assets to the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries or (y) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of “Investment”) not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary, which
amount was included in the calculation of the amount of Restricted Payments;
and

 

(G)                                $5.0 million.

 

(b)                                 The
provisions of Section 4.04(a) shall not prohibit:

 

(i)                                     any
purchase, repurchase, retirement or other acquisition or retirement for value
of, or other distribution in respect of, Capital Stock of the Company made by
exchange for, or out of the proceeds of the substantially concurrent sale of,
Capital Stock of the Company or capital contributions to the Company after the
Closing Date (other than Disqualified Stock and other than Capital Stock issued
or sold to, or capital contribution from, a Subsidiary of the Company or an
employee equity ownership or participation plan or other trust established by
the Company or any of its Subsidiaries); provided, however, that (1) such
Restricted Payment shall be excluded in the calculation of the amount of Restricted
Payments and (2) the Net Cash Proceeds from such sale or capital contribution
applied in the manner set forth in this clause (i) shall be excluded from the
calculation of amounts under Section 4.04(a)(iv)(3)(B);

 

(ii)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Obligations of the Company or a Restricted Subsidiary
made by exchange for, or out of the proceeds of the substantially concurrent
sale of, (x) Capital Stock of the Company or a Restricted Subsidiary or (y)
Subordinated Obligations of the Company or a Restricted Subsidiary that are
permitted to be Incurred pursuant to Section 4.03; provided,  however, that such purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value shall be
excluded in the calculation of the amount of Restricted Payments;

 

(iii)                               any
purchase or redemption of Subordinated Obligations from Net Available Cash to
the extent permitted by Section 4.06; provided, however, that such

 

37

 

purchase or
redemption shall be excluded in the calculation of the amount of Restricted
Payments;

 

(iv)                              Investments
that are made with Excluded Contributions; provided, however, that such
Investments shall be excluded in the calculation of the amount of Restricted
Payments;

 

(v)                                 dividends
or other distributions paid to holders of, or redemptions from holders of,
Capital Stock within 60 days after the date of declaration thereof, or the
giving of formal notice of redemption, if at such date of declaration such
dividends or other distributions or redemptions would have complied with this
Section 4.04(a); provided, however, that such dividend, distribution or
redemption shall be included in the calculation of the amount of Restricted
Payments;

 

(vi)                              any
repurchase of Capital Stock owned by former officers, directors, consultants or
employees of the Company or its Subsidiaries or their assigns, estates and
heirs or entities controlled by them; provided, however, that the amount of
such repurchases since the Closing Date shall not, in the aggregate, exceed the
sum of (1) $10.0 million (which amount shall be increased by the amount of any
Net Cash Proceeds to the Company from (A) sales of Capital Stock of the Company
to management, other employees or Permitted Holders subsequent to the Closing
Date to the extent such amounts are not included under Section
4.04(a)(iv)(3)(B) and (B) any “key-man” life insurance policies which are used
to make such repurchases) and (2) $2.0 million per fiscal year of the Company
commencing with fiscal year 2006 (which amount may be used in a subsequent
fiscal year to the extent not used during a fiscal year); provided further,
however, that the cancelation of Indebtedness owing to the Company from such
former officers, directors, consultants or employees of the Company or any of
its Restricted Subsidiaries in connection with a repurchase of Capital Stock of
the Company shall not be deemed to constitute a Restricted Payment under the
Indenture; provided further, however, that such repurchase shall be included in
the calculation of the amount of Restricted Payments;

 

(vii)                           repurchases
of Capital Stock deemed to occur upon the exercise of stock options, warrants
or other convertible securities if such Capital Stock represents a portion of
the exercise price thereof; provided, however, that such repurchases shall be
excluded in the calculation of the amount of Restricted Payments; or

 

(viii)                        so
long as no Default or Event of Default shall have occurred and be continuing,
payments not to exceed $500,000 in the aggregate since the Closing Date to
enable the Company to make payments to holders of its Capital Stock in lieu of
the issuance of fractional shares of its Capital Stock; provided, however, that
such payments shall be excluded in the calculation of the amount of Restricted
Payments.

 

(c)                                  Notwithstanding
the provisions of this Section 4.04, at all times that any Security not
otherwise discharged or defeased pursuant to Article VIII hereof is outstanding
hereunder, the Company shall not voluntarily repurchase, repay, redeem,
defease, discharge or otherwise acquire or retire for value, prior to the
Stated Maturity Date of the 2003 Notes, more

 

38

 

than 50% of the aggregate principal amount of
the 2003 Notes outstanding on the Issue Date of the Securities. For the
avoidance of doubt, the provisions of this Section 4.04(c) shall not prohibit
or otherwise restrict the repayment, repurchase, redemption, defeasance,
discharge or other acquisition or retirement for value of the 2003 Notes (i) on
or after the Stated Maturity thereof, (ii) prior to the Stated Maturity thereof
to the extent required pursuant to the terms of the 2003 Note Indenture and/or
the 2003 Notes, including without limitation as a result of or in connection
with any default or event of default under the 2003 Notes Indenture, any
acceleration of the principal, premium (if any) and interest payable on the
2003 Notes other than pursuant to Article III of the 2003 Notes Indenture, or
any offer made to the holders of the 2003 Notes as a result of a Change of
Control pursuant to Section 4.08 of the 2003 Notes Indenture or (iii) as may be
approved by court order pursuant to any bankruptcy, insolvency or
reorganization proceeding to which the Company or its assets may become
subject.

 

SECTION 4.05                    Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of
any Restricted Subsidiary to (a) pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any of its Restricted Subsidiaries (it being understood that the
priority of any preferred stock in receiving dividends or liquidating
distributions prior to dividends or liquidating distributions being paid on
common stock shall not be deemed a restriction on the ability to make
distributions on Capital Stock), (b) make any loans or advances to the Company
(it being understood that the subordination of loans or advances made to the
Company to other Indebtedness Incurred by the Company shall not be deemed a
restriction on the ability to make loans or advances) or (c) transfer any of
its property or assets to the Company or any of its Restricted Subsidiaries,
except:

 

(i)                                     any
encumbrance or restriction pursuant to applicable law or any applicable rule,
regulation or order, or an agreement in effect at or entered into on the
Closing Date (including the Credit Agreement);

 

(ii)                                  any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Capital Stock or Indebtedness of such Restricted
Subsidiary, in each case Incurred by such Restricted Subsidiary prior to the
date on which such Restricted Subsidiary was acquired by the Company (other
than Capital Stock or Indebtedness Incurred as consideration in, in
contemplation of, or to provide all or any portion of the funds or credit
support utilized to consummate the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was otherwise acquired by the Company) and outstanding on such
date;

 

(iii)                               any
encumbrance or restriction pursuant to an agreement effecting a Refinancing of
Indebtedness Incurred pursuant to an agreement referred to in clause (c)(i) or
(c)(ii) of this Section 4.05 or this clause (iii) or contained in any amendment
to an agreement referred to in clause (c)(i) or (c)(ii) of this Section 4.05 or
this clause (c)(iii);  provided, however,
that the encumbrances and restrictions contained in any such Refinancing agreement
or amendment are no more restrictive, taken as a whole, than the encumbrances
and restrictions contained in such predecessor agreements;

 

39

 

(iv)                              in
the case of clause (c), any encumbrance or restriction (1) that restricts in a
customary manner the assignment of any lease, license or similar contract or
the subletting, assignment or transfer of any property or asset that is subject
to a lease, license or similar contract, (2) that is or was created by virtue
of any transfer of, agreement to transfer or option or right with respect to
any property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture, (3) 
contained in security agreements securing Indebtedness of a Restricted
Subsidiary to the extent such encumbrance or restriction restricts the transfer
of the property subject to such security agreements, or (4) encumbrances or
restrictions relating to Indebtedness permitted to be  Incurred pursuant to Section 4.03(b)(vi) for
property acquired in the ordinary course of business that only imposes
encumbrances or restrictions on the property so acquired (it being agreed that
any such encumbrance or restriction may also secure other Indebtedness
permitted to be Incurred by the Company and provided by the same financing
source providing the Indebtedness Incurred pursuant to Section 4.03(b)(vi));

 

(v)                                 with
respect to a Restricted Subsidiary, any restriction imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all
the Capital Stock or assets of such Restricted Subsidiary pending the closing
of such sale or disposition;

 

(vi)                              customary
provisions in joint venture agreements and other similar agreements entered
into in the ordinary course of business;

 

(vii)                           Indebtedness
or other contractual requirements of a Securitization Entity in connection with
a Qualified Securitization Transaction; provided, that such restrictions apply
only to such Securitization Entity;

 

(viii)                        net
worth provisions in leases and other agreements entered into by the Company or
any Restricted Subsidiary in the ordinary course of business; and

 

(ix)                                any
agreement or instrument governing Indebtedness (whether or not outstanding) of
Foreign Subsidiaries of the Company permitted to be Incurred pursuant to
Section 4.03(a) or Section 4.03(b)(x).

 

SECTION 4.06                    Limitation on Sales of Assets and Subsidiary Stock.
(a)  The Company shall not, and shall not
permit any Restricted Subsidiary to, make any Asset Disposition unless (i) the
Company or such Restricted Subsidiary receives consideration (including by way
of relief from, or by any other Person assuming sole responsibility for, any
liabilities, contingent or otherwise) at the time of such Asset Disposition at
least equal to the fair market value of the Capital Stock and assets subject to
such Asset Disposition, (ii) at least 75% of the consideration thereof received
by the Company or such Restricted Subsidiary is in the form of (1) cash or
Temporary Cash Investments, (2) properties and assets to be owned by the
Company or any Restricted Subsidiary and used in a Permitted Business or (3)
Capital Stock in one or more Persons engaged in a Permitted Business that are
or thereby become Restricted Subsidiaries of the Company, and (iii) an amount
equal to 100% of the Net Available Cash from

 

40

 

such Asset Disposition is applied by the
Company (or such Restricted Subsidiary, as the case may be):

 

(1)                                  first,
(i) to the extent the Company elects (or is required by the terms of any
Indebtedness), to prepay, repay, redeem or purchase (x)  Bank Indebtedness or (y) other Senior
Indebtedness of the Company or Indebtedness (other than any Disqualified Stock)
of a Restricted Subsidiary (in the case of clause (y), other than Indebtedness
owed to the Company or an Affiliate of the Company and other than Preferred
Stock of a Restricted Subsidiary that is not a Note Guarantor) or (ii) to the
extent the Company or such Restricted Subsidiary elects, to reinvest in
Additional Assets (including by means of an Investment in Additional Assets by
a Restricted Subsidiary with Net Available Cash received by the Company or
another Restricted Subsidiary or the application by the Company of the Net Available
Cash received by a Restricted Subsidiary of the Company), in each case within
365 days (or, in the case of Foreign Subsidiary Asset Dispositions, 545 days)
from the later of such Asset Disposition or the receipt of such Net Available
Cash; provided that pending the final application of any such Net Available
Cash, the Company and its Restricted Subsidiaries may temporarily reduce
Indebtedness or otherwise invest such Net Available Cash in any manner not
prohibited by this Indenture;

 

(2)                                  second,
within 365 days from the later of such Asset Disposition or the receipt of such
Net Available Cash (or, in the case of Foreign Subsidiary Asset Dispositions,
545 days), to the extent of the balance of such Net Available Cash after such
application in accordance with clause (1), to make an Offer (as defined below)
to purchase Securities pursuant to and subject to the conditions set forth in
Section 4.06(b); provided, however, that if the Company elects (or is required
by the terms of any Senior Subordinated Indebtedness), such Offer may be made
ratably to purchase the Securities and other Senior Subordinated Indebtedness
of the Company; and

 

(3)                                  third,
to the extent of the balance of such Net Available Cash after application in
accordance with clauses (1) (other than the proviso thereof) and (2) for any
general corporate purpose not restricted by the terms of this Indenture;

 

provided, however, that in connection with
any prepayment, repayment or purchase of Indebtedness pursuant to clause (1) or
(2) above, the Company or such Restricted Subsidiary shall retire such
Indebtedness and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased.

 

Notwithstanding
the foregoing provisions of this Section 4.06, the Company and the Restricted
Subsidiaries shall not be required to apply any Net Available Cash in
accordance with this Section 4.06(a) except to the extent that the aggregate
Net Available Cash from all Asset Dispositions since the Closing Date that is
not applied in accordance with this Section 4.06(a) exceeds $10.0  million since the Closing Date.

 

For the
purposes of this Section 4.06, the following are deemed to be cash: (A) the
assumption of any liabilities of the Company (other than Disqualified Stock of
the Company) or any Restricted Subsidiary and the release of the Company or
such Restricted Subsidiary from

 

41

 

all liability
on such liabilities in connection with such Asset Disposition and (B)
securities received by the Company or any Restricted Subsidiary from the
transferee that are promptly converted by the Company or such Restricted
Subsidiary into cash.

 

(b)                                 In
the event of an Asset Disposition that requires the purchase of Securities (and
other Senior Subordinated Indebtedness) pursuant to Section 4.06(a)(iii)(2),
the Company shall be required to purchase Securities (and other Senior
Subordinated Indebtedness) tendered pursuant to an offer by the Company for the
Securities (and other Senior Subordinated Indebtedness) (the “Offer”) at a
purchase price of 100% of their principal amount plus accrued and unpaid
interest to the date of purchase (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date) in accordance with the procedures (including prorating in the
event of oversubscription) set forth in Section 4.06(c). If the aggregate
purchase price of Securities (and other Senior Subordinated Indebtedness)
tendered pursuant to the Offer is less than the Net Available Cash allotted to
the purchase of the Securities (and other Senior Subordinated Indebtedness),
the Company shall apply the remaining Net Available Cash for any general
corporate purpose not restricted by the terms of the Indenture. The Company
shall not be required to make an Offer for Securities (and other Senior
Subordinated Indebtedness) pursuant to this Section 4.06 if the Net Available
Cash available therefor (after application of the proceeds as provided in
clause (1) of Section 4.06(a)(iii)) is less than $10.0 million for any
particular Asset Disposition since the Closing Date (which lesser amount shall
be carried forward for purposes of determining whether an Offer is required with
respect to the Net Available Cash from any subsequent Asset Disposition). Upon
completion of the Offer, the amount of Net Available Cash shall be reduced to
zero.

 

(c)                                  (i)  Promptly, and in any event within 10 days
after the Company becomes obligated to make an Offer, the Company shall be
obligated to deliver to the Trustee and send, by first-class mail to each
Holder, a written notice stating that the Holder may elect to have his
Securities purchased by the Company either in whole or in part (subject to prorating
as hereinafter described in the event the Offer is oversubscribed) in integral
multiples of $1,000 of principal amount, at the applicable purchase price. The
notice shall specify a purchase date not less than 30 days nor more than 60
days after the date of such notice (the “Purchase Date”) and shall contain such
information concerning the business of the Company which the Company in good
faith believes will enable such Holders to make an informed decision (which at
a minimum shall include (1) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company, the most
recent subsequently filed Quarterly Report on Form 10-Q and any Current Report
on Form 8-K of the Company filed subsequent to such Quarterly Report, other
than Current Reports describing Asset Dispositions otherwise described in the
offering materials (or corresponding successor reports), (2) a description of
material developments in the Company’s business subsequent to the date of the
latest of such reports, and (3) if material, appropriate pro forma financial
information) and all instructions and materials necessary to tender Securities
pursuant to the Offer, together with the address referred to in clause (c)
(iii).

 

(ii)                                  Not
later than the date upon which written notice of an Offer is delivered to the
Trustee as provided above, the Company shall deliver to the Trustee an Officers’
Certificate as to (1) the amount of the Offer (the “Offer Amount”), (2) the
allocation of the Net Available Cash from the Asset Dispositions pursuant to
which such Offer is being

 

42

 

made and (3)
the compliance of such allocation with the provisions of Section 4.06(a). By no
later than 11:00 a.m. New York City time on the Purchase Date, the Company
shall irrevocably deposit with the Trustee or with a paying agent (or, if the
Company is acting as its own paying agent, segregate and hold in trust) an
amount equal to the Offer Amount or, if less, the purchase price of Securities
(and other Senior Subordinated Indebtedness) tendered and accepted for payment
in the Offer. Upon the expiration of the period for which the Offer remains
open (the “Offer Period”), the Company shall deliver to the Trustee for
cancelation the Securities or portions thereof that have been properly tendered
to and are to be accepted by the Company. The Trustee (or the Paying Agent, if
not the Trustee) shall, on the date of purchase, mail or deliver payment to
each tendering Holder in the amount of the purchase price.

 

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

 

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

 

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

 

SECTION 4.07                    Limitation on Transactions with Affiliates. (a)  The Company shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, enter

 

43

 

into or conduct any transaction (including,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company (an “Affiliate Transaction”) unless
such Affiliate Transaction is on terms (i) that are no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than those that
could be obtained at the time of such transaction in arm’s-length dealings with
a Person who is not such an Affiliate, (ii) that, in the event that such
Affiliate Transaction involves an aggregate amount in excess of $5.0 million,
(1) are set forth in writing and (2) except as provided in Section
4.07(a)(iii), have been approved by a majority of the members of the Board of
Directors having no personal stake in such Affiliate Transaction (if any such
members exist) and (iii) that, in the event (1) such Affiliate Transaction
involves an amount in excess of $10.0 million, or (2) if there are no members
of the Board of Directors having no personal stake in such Affiliate
Transaction and such Affiliate Transaction involves an aggregate amount in
excess of $5.0 million, have been determined by a nationally recognized
appraisal, accounting or investment banking firm to be fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries.

 

(b)                                 The
provisions of Section 4.07(a) shall not prohibit (i) any Restricted Payment
permitted to be paid pursuant to Section 4.04, (ii) any issuance of securities,
or other payments awards or grants in cash, securities or otherwise pursuant
to, or the funding of, employment arrangements, options to purchase Capital
Stock of the Company and equity ownership, restricted stock plans, long-term
incentive plans, stock appreciation rights plans, participation plans or
similar employee benefits plans approved by the Board of Directors, (iii) the grant
of options (and the exercise thereof) to purchase Capital Stock of the Company
or similar rights to employees and directors of the Company pursuant to plans
approved by the Board of Directors, (iv) loans or advances to officers,
directors or employees in the ordinary course of business, but in any event not
to exceed $2.0 million in the aggregate outstanding at any one time, (v) the
payment of reasonable fees to directors of the Company and its Subsidiaries who
are not employees of the Company or its Subsidiaries and other reasonable fees,
compensation, benefits and indemnities paid or entered into by the Company or
its Restricted Subsidiaries in the ordinary course of business to or with the
officers, directors or employees of the Company and its Restricted
Subsidiaries, (vi) any transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries, (vii) the provision by Persons
who may be deemed Affiliates or stockholders of the Company (other than J.P.
Morgan Partners, LLC and Persons directly or indirectly controlled by J.P.
Morgan Partners, LLC) of investment banking, commercial banking, trust, lending
or financing, investment, underwriting, placement agent, financial advisory or
similar services to the Company or its Subsidiaries performed after the Closing
Date, (viii) sales of Capital Stock to Permitted Holders approved by a majority
of the members of the Board of Directors who do not have a material direct or
indirect financial interest in or with respect to the transaction being
considered, or (ix) the existence or performance by the Company or any
Restricted Subsidiary under any agreement as in effect as of the Closing Date
or replacement agreement therefor or any transaction contemplated thereby
(including pursuant to any amendment thereto or replacement agreement therefor)
so long as such amendment or replacement is not more disadvantageous to the
Holders of the Securities in any material respect than the original agreement
as in effect on the Closing Date.

 

SECTION 4.08                    Change of Control. (a)  Upon a Change of Control, each Holder shall
have the right to require that the Company repurchase all or any part of such
Holder’s Securities at a purchase price in cash equal to (i) for a repurchase
date occurring during

 

44

 

the period from the Issue Date to but
excluding June 14, 2008, 100% of the principal amount of the Securities to be
repurchased plus the Applicable Premium as of, and accrued and unpaid interest,
if any, to, the date of repurchase and (ii) for a repurchase date occurring
during the period commencing on or after June 14, 2008, the redemption price of
the Securities at such date as set forth in paragraph 5 of the Securities plus
accrued and unpaid interest to the date of repurchase (subject, in the case of
each of clauses (i) and (ii) hereof, to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), in accordance with the terms contemplated in Section 4.08(b); provided,
however, that notwithstanding the occurrence of a Change of Control, the
Company shall not be obligated to repurchase the Securities pursuant to this
Section 4.08 in the event that it has exercised its right to redeem all the
Securities under paragraph 5 of the Securities. In the event that at the time
of such Change of Control the terms of any agreement governing Bank
Indebtedness of the Company or its Subsidiaries restrict or prohibit the
repurchase of Securities pursuant to this Section 4.08, then prior to the
mailing of the notice to Holders provided for in Section 4.08(b) below but in
any event within 30 days following any Change of Control, the Company shall (i)
repay in full all such Bank Indebtedness or offer to repay in full all such
Bank Indebtedness and repay the Bank Indebtedness of each lender who has
accepted such offer or (ii) obtain the requisite consent of the lenders under
such agreements to permit the repurchase of the Securities as provided for in
Section 4.08(b).

 

(b)                                 Within
30 days following any Change of Control (except as provided in the proviso to
the first sentence of Section 4.08(a)), the Company shall mail a notice to each
Holder with a copy to the Trustee (the “Change of Control Offer”) stating:

 

(i)                                     that
a Change of Control has occurred and that such Holder has the right to require
the Company to purchase all or a portion (in integral multiples of $1,000) of
such Holder’s Securities at a purchase price (or, in the case of any repurchase
date occurring prior to June 14, 2008, the applicable formula for calculating
the repurchase price) in cash equal to (i) for a repurchase date occurring
during the period from the Issue Date to but excluding June 14, 2008, 100% of
the principal amount of the Securities to be repurchased plus the Applicable
Premium as of, and accrued and unpaid interest, if any, to, the date of
repurchase and (ii) for a repurchase date occurring during the period
commencing on or after June 14, 2008, the redemption price of the Securities at
such date as set forth in paragraph 5 of the Securities plus accrued and unpaid
interest to the date of repurchase (subject, in the case of each of clauses (i)
and (ii) hereof, to the right of Holders of record on the relevant record date
to receive interest due on the relevant interest payment date);

 

(ii)                                  the
circumstances and relevant facts and financial information regarding such
Change of Control;

 

(iii)                               the
repurchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed); and

 

(iv)                              the
instructions determined by the Company, consistent with this Section, that a
Holder must follow in order to have its Securities purchased.

 

45

 

(c)                                  Holders
electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Company at the
address specified in the notice at least three Business Days prior to the
purchase date. Holders shall be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased. Holders whose
Securities are purchased only in part shall be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.

 

(d)                                 On
the purchase date, all Securities purchased by the Company under this Section
shall be delivered to the Trustee for cancellation, and the Company shall pay
the purchase price plus accrued and unpaid interest to the Trustee for further
distribution the Holders entitled thereto.

 

(e)                                  Notwithstanding
the foregoing provisions of this Section, the Company shall not be required to
make a Change of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in Section 4.08(b) applicable to a
Change of Control Offer made by the Company and purchases all Securities
validly tendered and not withdrawn under such Change of Control Offer.

 

(f)                                    At
the time the Company delivers Securities to the Trustee which are to be
accepted for purchase, the Company shall also deliver an Officers’ Certificate
stating that such Securities are to be accepted by the Company pursuant to and
in accordance with the terms of this Section 4.08. A Security shall be deemed
to have been accepted for purchase at the time the Trustee, directly or through
an agent, mails or delivers payment therefor to the surrendering Holder.

 

(g)                                 Prior
to any Change of Control Offer, the Company shall deliver to the Trustee an
Officers’ Certificate stating that all conditions precedent contained herein to
the right of the Company to make such offer have been complied with.

 

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

 

SECTION 4.09                    Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
an Officers’ Certificate (which certificate may be the same certificate
required by TIA Section 314(a)(4)) stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any
Default that occurred during such period. If they do, the certificate shall
describe the Default, its

 

46

 

status and what action the Company is taking
or proposes to take with respect thereto. The Company also shall comply with
TIA Section 314(a)(4).

 

SECTION 4.10                    Further Instruments and Acts. Upon request of the
Trustee or as otherwise necessary, the Company shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.

 

SECTION 4.11                    Future Note Guarantors. The Company shall cause
each Domestic Subsidiary and any other Restricted Subsidiary that guarantees
any Senior Indebtedness (other than a Foreign Subsidiary that guarantees Senior
Indebtedness Incurred by another Foreign Subsidiary) to become a Note
Guarantor, and, if applicable, execute and deliver to the Trustee a
supplemental indenture substantially in the form of Exhibit B pursuant to which
such Domestic or other Restricted Subsidiary will Guarantee payment of the
Securities.

 

SECTION 4.12                    Limitation on Lines of Business. The Company
shall not, and shall not permit any Restricted Subsidiary to, engage in any
business, other than a Permitted Business, except that the Company and any of
its Restricted Subsidiaries may engage in a new business so long as the Company
and its Restricted Subsidiaries, taken as a whole, remain substantially engaged
in a Permitted Business.

 

ARTICLE 5

 

Successor Company

 

SECTION 5.01                    When
Company May Merge or Transfer Assets.                             (a)    The Company shall not consolidate with or
merge with or into, or convey, transfer or lease all or substantially all its
assets to, any Person, unless:

 

(i)                                     the
resulting, surviving or transferee Person (the “Successor Company”) shall be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor
Company (if not the Company) shall expressly assume, by a supplemental
indenture hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, all the obligations of the Company under the Securities and
this Indenture;

 

(ii)                                  immediately
after giving effect to such transaction (and treating any Indebtedness which
becomes an obligation of the Successor Company or any Restricted Subsidiary as
a result of such transaction as having been Incurred by the Successor Company
or such Restricted Subsidiary at the time of such transaction), no Default
shall have occurred and be continuing;

 

(iii)                               immediately
after giving effect to such transaction, the Successor Company would be able to
Incur an additional $1.00 of Indebtedness pursuant to Section 4.03(a); and

 

47

 

(iv)                              the
Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture.

 

The Successor
Company shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture, but the predecessor Company in
the case of a conveyance, transfer or lease of all or substantially all its
assets shall not be released from the obligation to pay the principal of and
interest on the Securities.

 

(b)                                 The
Company shall not permit any Note Guarantor to consolidate with or merge with
or into any Person unless:

 

(i)                                     (1)
the resulting, surviving or transferee Person will be a corporation,
partnership or limited liability company organized and existing under the laws
of the United States of America, any State thereof or the District of Columbia,
and such Person (if not such Note Guarantor) shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of such Note Guarantor under
its Note Guarantee; (2) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person or any Restricted Subsidiary as a result of such
transaction as having been Incurred by such Person or such Restricted
Subsidiary at the time of such transaction), no Default shall have occurred and
be continuing; and (3) the Company shall have delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with this
Indenture; or

 

(ii)                                  such
transaction results in the Company receiving cash or other property (other than
Capital Stock representing a controlling interest in the successor entity), and
the transaction is made in compliance with Section 4.06.

 

(c)                                  Notwithstanding
the foregoing, (i) any Restricted Subsidiary may consolidate with, merge into
or transfer or lease all or part of its properties and assets to the Company or
a Subsidiary that is a Note Guarantor and (ii) the Company may merge with an
Affiliate incorporated solely for (1) the purpose of incorporating the Company
or (2) organizing the Company in another jurisdiction to realize tax or other
benefits.

 

ARTICLE 6

 

Defaults and Remedies

 

SECTION 6.01                    Events of Default. An “Event of Default” occurs
if:

 

(a)                                  the
Company defaults in any payment of interest on any Security when the same
becomes due and payable, whether or not such payment shall be prohibited by
Article 10, and such default continues for a period of 30 days;

 

(b)                                 the
Company (i) defaults in the payment of the principal of any Security when the
same becomes due and payable at its Stated Maturity, upon required redemption

 

48

 

or repurchase,
upon declaration or otherwise, whether or not such payment shall be prohibited
by Article 10 or (ii) fails to redeem or purchase Securities when required pursuant
to this Indenture or the Securities, whether or not such redemption or purchase
shall be prohibited by Article 10;

 

(c)                                  the
Company or any Note Guarantor fails to comply with Section 5.01;

 

(d)                                 the
Company or any Restricted Subsidiary fails to comply with Section 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.11 or 4.12 (other than a failure to purchase
Securities when required under Section 4.06 or 4.08) and such failure continues
for 45 days after the written notice specified below;

 

(e)                                  the
Company or any Restricted Subsidiary fails to comply with any of its agreements
in the Securities or this Indenture (other than those referred to in (a), (b),
(c) or (d) above) and such failure continues for 60 days after the written
notice specified below;

 

(f)                                    the
principal amount of any Indebtedness of the Company or any Restricted
Subsidiary is not paid within any applicable grace period after final maturity
or the acceleration by the holders thereof because of a default and the
aggregate principal amount of such Indebtedness unpaid or accelerated exceeds
$10.0 million or its foreign currency equivalent at the time and such failure
continues for 30 days after the written notice specified below;

 

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

 

(i)                                     commences a
voluntary case;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

49

 

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

 

or any similar relief is granted under any
foreign laws and the order or decree remains unstayed and in effect for 60
days;

 

(i)                                     any
judgment or decree for the payment of money in excess of  $10.0 million (net of any amounts with
respect to which a reputable and creditworthy insurance company has
acknowledged liability in writing) or its foreign currency equivalent against
the Company or a Restricted Subsidiary if such judgment or decree becomes final
and nonappealable and remains outstanding for a period of 60 days following
such judgment and is not discharged, waived or the execution thereof stayed; or

 

(j)                                     any
Note Guarantee of a Material Subsidiary ceases to be in full force and effect
(except as contemplated by the terms thereof) or any Note Guarantor or Person
acting by or on behalf of such Note Guarantor denies or disaffirms its
obligations under this Indenture or any Note Guarantee and such Default
continues for 10 days after the written notice specified below.

 

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

 

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

 

A Default
under clause (d), (e), (f) or (j) above is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities notify the Company of the Default and the Company or the Note
Guarantor, as applicable, does not cure such Default within the time specified
after receipt of such notice. Such notice must specify the Default, demand that
it be remedied and state that such notice is a “Notice of Default”.

 

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

 

SECTION 6.02                    Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(g) or (h) with respect to the
Company) occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the outstanding Securities by written notice (specifying
the Event of Default and stating that the notice is a “notice of acceleration”)
to the Company may declare the principal of and accrued but unpaid interest on
all the Securities to be due and payable. Upon such a declaration, such
principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(g) or (h) with respect to the Company occurs,
the principal of and interest on all the Securities shall ipso facto become and
be immediately due and payable without any declaration

 

50

 

or other act on the part of the Trustee or
any Holders. The Holders of a majority in principal amount of the Securities by
notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.

 

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

 

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

 

SECTION 6.04                    Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (a) a Default in the
payment of the principal of or interest on a Security, (b) a Default arising
from the failure to redeem or purchase any Security when required pursuant to
the terms of this Indenture or (c) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Holder
affected. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent right.

 

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

 

SECTION 6.06                    Limitation on Suits. (a)  Except to enforce the right to receive
payment of principal, premium (if any) or interest when due, no Holder may
pursue any remedy with respect to this Indenture or the Securities unless:

 

(i)                                     the
Holder gives to the Trustee written notice stating that an Event of Default is
continuing;

 

(ii)                                  the
Holders of at least 25% in principal amount of the  Securities make a written request to the
Trustee to pursue the remedy;

 

51

 

(iii)                               such
Holder or Holders offer to the Trustee reasonable security or indemnity
reasonably satisfactory to it against any loss, liability or expense;

 

(iv)                              the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and

 

(v)                                 the
Holders of a majority in principal amount of the Securities do not give the
Trustee a direction inconsistent with the request during such 60-day period.

 

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

 

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

 

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

 

SECTION 6.09                    Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to the Company, any Subsidiary or Note
Guarantor, their creditors or their property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder
to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07.

 

SECTION 6.10                    Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:

 

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

 

SECOND: 
to holders of Senior Indebtedness of the Company to the extent required
by Article 10 and to holders of Senior Indebtedness of the Note Guarantors to
the extent required by Article 12;

 

52

 

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

 

FOURTH: 
to the Company.

 

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

 

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

 

SECTION 6.12                    Waiver of Stay or Extension Laws. Neither the
Company nor any Note Guarantor (to the extent it may lawfully do so) shall at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company and each Note Guarantor (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.

 

ARTICLE 7

 

Trustee

 

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

 

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

 

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

 

(ii)                                  in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements

 

53

 

of this
Indenture. However, with respect to any certificate or opinions required to be
furnished to it hereunder, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                                 Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section and to the provisions of the TIA.

 

SECTION 7.02                    Rights of Trustee. (a)  The Trustee may conclusively rely on any
document (whether in its original or facsimile form) believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.

 

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

 

54

 

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

 

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

 

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

 

(f)                                    The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, debenture, note or other paper
or document unless requested in writing to do so by the Holders of not less
than a majority in principal amount of the Securities at the time outstanding,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney at the Company’s expense and shall incur no liability
or additional liability of any kind by reason of such inquiry or investigation.

 

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

 

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

 

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

 

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

 

(k)                                  The
Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless

 

55

 

written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.

 

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

 

SECTION 7.04                    Trustee’s Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Note Guarantee or the Securities, it shall not be
accountable for the Company’s use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company or any Note Guarantor
in this Indenture or in any document issued in connection with the sale of the
Securities or in the Securities other than the Trustee’s certificate of
authentication. The Trustee shall not be charged with knowledge of any Default
or Event of Default under Sections 6.01(c), (d), (e), (f), (i) or (j) or of the
identity of any Significant Subsidiary unless either (a) a Trust Officer shall
have actual knowledge thereof or (b) the Trustee shall have received notice
thereof in accordance with Section 13.02 hereof from the Company, any Note
Guarantor or any Holder at the Corporate Trust Office of the Trustee, such
notice referencing the Securities and this Indenture.

 

SECTION 7.05                    Notice of Defaults. If a Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each Holder notice
of the Default within the earlier of 90 days after it occurs or 30 days after
it is actually known to a Trust Officer. Except in the case of a Default in
payment of principal of or interest on any Security (including payments
pursuant to the mandatory redemption provisions of such Security, if any), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Holders.

 

SECTION 7.06                    Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Holder a brief report dated as of such May 15 that complies
with TIA Section 313(a) if and to the extent required thereby. The Trustee
shall also comply with TIA Section 313(b) and 313(c).

 

A copy of each
report at the time of its mailing to Holders shall be filed with the SEC and
each stock exchange (if any) on which the Securities are listed. The Company
agrees to notify promptly the Trustee whenever the Securities become listed on
any stock exchange and of any delisting thereof.

 

SECTION 7.07                    Compensation and Indemnity. The Company shall pay
to the Trustee from time to time reasonable compensation for its services as
shall be agreed to in writing from time to time 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 shall reimburse the Trustee upon
request for all reasonable out-of- pocket expenses incurred or made

 

56

 

by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the Trustee’s
agents, counsel, accountants and experts. The Company and each Note Guarantor,
jointly and severally, shall indemnify the Trustee and any predecessor Trustee
against any and all loss, liability, claim, damage or expense (including
reasonable attorneys’ fees), including taxes (other than taxes based upon,
measured by or determined by the income of the Trustee), incurred by or in
connection with the administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company of any claim for which
it may seek indemnity promptly upon obtaining actual knowledge thereof;
provided, however, that any failure so to notify the Company shall not relieve
the Company or any Note Guarantor of its indemnity obligations hereunder. The
Company shall defend the claim and the indemnified party shall provide reasonable
cooperation at the Company’s expense in the defense. Such indemnified parties
may have separate counsel and the Company and the Note Guarantors, as
applicable shall pay the fees and expenses of such counsel; provided, however,
that the Company shall not be required to pay such fees and expenses if it
assumes such indemnified parties’ defense and, in such indemnified parties’
reasonable judgment, there is no conflict of interest between the Company and
the Note Guarantors, as applicable, and such parties in connection with such
defense. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by an indemnified party through such party’s
own willful misconduct, negligence or bad faith.

 

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

 

The Company’s
payment obligations pursuant to this Section shall survive the satisfaction or
discharge of this Indenture, any rejection or termination of this Indenture
under any bankruptcy law or the resignation or removal of the Trustee. Without
prejudice to any other rights available to the Trustee under applicable law,
when the Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(g) or (h) with respect to the Company, the expenses are intended
to constitute expenses of administration under the Bankruptcy Law.

 

SECTION 7.08                    Replacement of Trustee. (a)  The Trustee may resign at any time by so
notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee. The Company shall remove the Trustee if:

 

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

 

(ii)                                  the
Trustee is adjudged bankrupt or insolvent;

 

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

 

(iv)                              the
Trustee otherwise becomes incapable of acting.

 

(b)                                 If
the Trustee resigns, is removed by the Company or by the Holders of a majority
in principal amount of the Securities and such Holders do not reasonably
promptly

 

57

 

appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.

 

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

 

(d)                                 If
a successor Trustee does not take office within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in
principal amount of the Securities may petition, at the expense of the Company,
any court of competent jurisdiction for the appointment of a successor Trustee
at the expense of the Company.

 

(e)                                  If
the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to
resign is stayed as provided in TIA Section 310(b), any Holder who has been a
bona fide holder of a Security for at least six months may petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee.

 

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

 

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

 

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

 

SECTION 7.10                    Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. The Trustee shall
comply with TIA Section 310(b); subject to its right to apply for a stay of its
duty to resign under the penultimate paragraph of TIA Section 310(b); provided,
however, that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other

 

58

 

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.

 

ARTICLE 8

 

Discharge of Indenture; Defeasance

 

SECTION 8.01                    Discharge of Liability on Securities; Defeasance.
(a)  When (i) all outstanding Securities
(other than Securities replaced or paid pursuant to Section 2.07) have been
canceled or delivered to the Trustee for cancelation or (ii) all outstanding
Securities have become due and payable, whether at maturity or as a result of
the mailing of a notice of redemption pursuant to Article 3 hereof, and the
Company irrevocably deposits with the Trustee funds in an amount sufficient or
U.S. Government Obligations, the principal of and interest on which will be
sufficient, or a combination thereof sufficient, in the written opinion of a
nationally recognized firm of independent public accountants delivered to the
Trustee (which delivery shall only be required if U.S. Government Obligations
have been so deposited), to pay the principal of, premium (if any) and interest
on the outstanding Securities when due at maturity or upon redemption of,
including interest thereon to maturity or such redemption date (other than
Securities replaced or paid pursuant to Section 2.07) and if in the case of
both clause (i) and (ii) the Company pays all other sums payable hereunder by
the Company, then this Indenture shall, subject to Section 8.01(c), cease to be
of further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers’ Certificate
and an Opinion of Counsel and at the cost and expense of the Company.

 

(b)                                 Subject
to Sections 8.01(c) and 8.02, the Company at any time may terminate (i) all of
its obligations under the Securities and this Indenture (“legal defeasance
option”) or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.11 and 4.12 and the operation of Section 5.01(a)(iii), 6.01(d),
6.01(f), 6.01(g) (with respect to Significant Subsidiaries of the Company
only), 6.01(h) (with respect to Significant Subsidiaries of the Company only)
6.01(i) and 6.01(j) (“covenant defeasance option”). The Company may exercise
its legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option. In the event that the Company terminates all of its
obligations under the Securities and this Indenture by exercising its legal
defeasance option or its covenant defeasance option, the obligations under the
Note Guarantees shall each be terminated simultaneously with the termination of
such obligations.

 

If the Company
exercises its legal defeasance option, payment of the Securities may not be
accelerated because of an Event of Default. If the Company exercises its
covenant defeasance option, payment of the Securities may not be accelerated
because of an Event of Default specified in Section 6.01(d), 6.01(f), 6.01(g)
(with respect to Significant Subsidiaries only), 6.01(h) (with respect to
Significant Subsidiaries only), 6.01(i) or 6.01(j) or because of the failure of
the Company to comply with Section 5.01(a)(iii).

 

59

 

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

 

(c)                                  Notwithstanding
clauses (a) and (b) above, the Company’s obligations in Sections 2.03, 2.04,
2.05, 2.06, 2.07, 2.08, 7.07, 7.08 and in this Article 8 shall survive until
the Securities have been paid in full. Thereafter, the Company’s obligations in
Sections 7.07, 8.04, 8.05 and 8.06 shall survive.

 

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

 

(i)                                     the
Company irrevocably deposits in trust with the Trustee money in an amount
sufficient or U.S. Government Obligations, the principal of and interest on
which will be sufficient, or a combination thereof sufficient, to pay the
principal of, premium (if any) and interest, on the Securities when due at
maturity or redemption, as the case may be, including interest thereon to
maturity or such redemption date;

 

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

 

(iii)                               123
days pass after the deposit is made and during the 123-day period no Default
specified in Section 6.01(g) or (h) with respect to the Company occurs which is
continuing at the end of the period;

 

(iv)                              the
deposit does not constitute a default under any other agreement binding on the
Company and is not prohibited by Article 10;

 

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

 

(vi)                              in
the case of the legal defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel stating that (1) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling, or
(2) since the date of this Indenture there has been a change in the applicable
Federal income tax law, 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 Federal income tax purposes as a result of such
deposit and legal defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such deposit and legal defeasance had not occurred;

 

(vii)                           in
the case of the covenant defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that the Holders will not

 

60

 

recognize
income, gain or loss for Federal income tax purposes as a result of such
deposit and covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such deposit and covenant defeasance had not occurred; and

 

(viii)                        the
Company delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance and
discharge of the Securities as contemplated by this Article 8 have been
complied with.

 

(b)                                 Before
or after a deposit, the Company may make arrangements satisfactory to the
Trustee for the redemption of Securities at a future date in accordance with
Article 3.

 

(c)                                  Notwithstanding
the foregoing, the Opinion of Counsel required by clause (vi) above need not be
delivered if all Notes not theretofore delivered to the Trustee for cancelation
have become due and payable.

 

SECTION 8.03                    Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant
to this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article 10 or 12.

 

SECTION 8.04                    Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any money or U.S.
Government Obligations held by it as provided in this Article which, in the
written opinion of nationally recognized firm of independent public accountants
delivered to the Trustee (which delivery shall only be required if U.S.
Government Obligations have been so deposited), are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
discharge or defeasance in accordance with this Article.

 

Subject to any
applicable abandoned property law, the Trustee and the Paying Agent shall pay
to the Company upon written request any money held by them for the payment of
principal or interest that remains unclaimed for two years, and, thereafter,
Holders entitled to the money must look to the Company for payment as general
creditors, and the Trustee and the Paying Agent shall have no further liability
with respect to such monies.

 

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

 

SECTION 8.06                    Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
this Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company’s obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is

 

61

 

permitted to apply all such money or U.S.
Government Obligations in accordance with this Article 8; provided, however,
that, if the Company has made any payment of principal of or interest on, any
Securities because of the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.

 

ARTICLE 9

 

Amendments

 

SECTION 9.01                    Without Consent of Holders. The Company, the Note
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Holder:

 

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

 

(ii)                                  to
comply with Article 5;

 

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

 

(iv)                              to
make any change in Article 10 or Article 12 that would limit or terminate the
benefits available to any holder of Senior Indebtedness of the Company or a
Note Guarantor (or Representatives thereof) under Article 10 or Article 12,
respectively;

 

(v)                                 to
add additional Guarantees with respect to the Securities or to secure the
Securities;

 

(vi)                              to
add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company;

 

(vii)                           to
comply with any requirement of the SEC in connection with qualifying, or
maintaining the qualification of, this Indenture under the TIA; or

 

(viii)                        to
make any change that does not materially and adversely affect the rights of any
Holder under the provisions of this Indenture.

 

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

 

SECTION 9.02                    With Consent of Holders. (a)  The Company, the Note Guarantors and the
Trustee may amend this Indenture or the Securities without notice to any Holder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities then outstanding (including consents obtained in connection
with a tender offer or

 

62

 

exchange for the Securities) and compliance
with any provisions of this Indenture may be waived with the written consent of
the Holders of at least a majority in principal amount of the Securities then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Securities). However, without the consent of each Holder
affected, an amendment or waiver may not:

 

(i)                                     reduce
the amount of Securities whose Holders must consent to an amendment;

 

(ii)                                  reduce
the rate of or extend the time for payment of interest on any Security;

 

(iii)                               reduce
the principal of or extend the Stated Maturity of any Security;

 

(iv)                              reduce
the premium payable upon the redemption of any Security or change the time at
which any Security may be redeemed in accordance  with Article 3;

 

(v)                                 make
any Security payable in money other than that stated in the Security;

 

(vi)                              make
any change in Article 10 or Article 12 that adversely affects the rights of any
Holder under Article 10 or Article 12;

 

(vii)                           make
any change in Section 6.04 or 6.07 or the second sentence of this Section 9.02;
or

 

(viii)                        modify
the Note Guarantees in any manner adverse to the Holders.

 

It shall not
be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed amendment, but it shall be sufficient if
such consent approves the substance thereof.

 

After an
amendment under this Section 9.02 becomes effective, the Company shall mail to
Holders a notice briefly describing such amendment. The failure to give such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.02.

 

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

 

SECTION 9.04                    Revocation and Effect of Consents and Waivers. (a)  A consent to an amendment or a waiver by a
Holder of a Security shall bind the Holder and every subsequent Holder of that
Security or portion of the Security that evidences the same debt as the
consenting Holder’s Security, even if notation of the consent or waiver is not
made on the Security. However, any such Holder or subsequent Holder may revoke
the consent or waiver as to such Holder’s Security or portion of the Security
if the Trustee receives the notice of revocation before the date on which the
Trustee receives an Officers’ Certificate from the Company certifying that the
requisite number of consents have been received. After an amendment or waiver
becomes effective, it shall bind every Holder. An amendment or waiver

 

63

 

becomes effective upon the (i) receipt by the
Company or the Trustee of the requisite number of consents, (ii) satisfaction
of conditions to effectiveness as set forth in this Indenture and any indenture
supplemental hereto containing such amendment or waiver and (iii) execution of
such amendment or waiver (or supplemental indenture) by the Company and the
Trustee.

 

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

 

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

 

SECTION 9.06                    Trustee to Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and shall be provided with, and (subject to Section 7.01)
shall be fully protected in relying upon, an Officers’ Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture and that such amendment is the legal, valid and binding
obligation of the Company and the Note Guarantors enforceable against them in
accordance with its terms, subject to customary exceptions, and complies with
the provisions hereof (including Section 9.03).

 

ARTICLE 10

 

Subordination

 

SECTION 10.01              Agreement to Subordinate. The Company agrees, and
each Holder by accepting a Security agrees, that the Indebtedness evidenced by
the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the prior payment in full of all Senior
Indebtedness of the Company and that the subordination is for the benefit of
and enforceable by the holders of such Senior Indebtedness. The Securities
shall in all respects rank pari passu with all other Senior Subordinated
Indebtedness of the Company and shall rank senior to all existing and future
Subordinated Obligations of the Company; and only Indebtedness of the Company
that is Senior Indebtedness of the Company shall rank senior to the Securities
in accordance with the provisions set forth herein. All provisions of this
Article 10 shall be subject to Section 10.12.

 

64

 

SECTION 10.02              Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:

 

(a)                                  holders
of Senior Indebtedness of the Company shall be entitled to receive payment in
full of such Senior Indebtedness before Holders shall be entitled to receive
any payment of principal of or interest on the Securities; and

 

(b)                                 until
the Senior Indebtedness of the Company is paid in full , any payment or
distribution to which Holders would be entitled but for this Article 10 shall
be made to holders of such Senior Indebtedness as their interests may appear,
except that Holders of the Securities may receive Capital Stock and any debt
securities that are subordinated to such Senior Indebtedness to at least the
same extent as the Securities.

 

SECTION 10.03              Default on Designated Senior Indebtedness. The
Company may not pay the principal of, premium (if any) or interest on the
Securities or make any deposit pursuant to Section 8.01 and may not otherwise
repurchase, redeem or otherwise retire any Securities (collectively, “pay the
Securities”) if (a) any principal of, interest on, unpaid drawings for letters
of credit in respect of, or regularly accruing fees with respect to any,
Designated Senior Indebtedness of the Company is not paid when due or (b) any
other default on such Designated Senior Indebtedness occurs and the maturity of
such Designated Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (i) the default has been cured or waived and any such
acceleration has been rescinded or (ii) such amounts due under Designated
Senior Indebtedness have been paid in full; provided, however, that the Company
may pay the Securities without regard to the foregoing if the Company and a
Trust Officer of the Trustee receive written notice approving such payment from
the Representative of such Designated Senior Indebtedness with respect to which
either of the events set forth in clause (a) or (b) of this sentence has
occurred and is continuing. During the continuance of any default (other than a
default described in clause (a) or (b) of the preceding sentence) with respect
to any Designated Senior Indebtedness of the Company pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration
of any applicable grace periods, the Company may not pay the Securities for a
period (a “Payment Blockage Period”) commencing upon the receipt by a Trust
Officer of the Trustee (with a copy to the Company) of written notice specified
as a “notice of default” and describing with particularity the default under
such Designated Senior Indebtedness (a “Blockage Notice”) of such default from
the Representative of such Designated Senior Indebtedness specifying an
election to effect a Payment Blockage Period and ending 179 days thereafter (or
earlier if such Payment Blockage Period is terminated (a) by written notice to
the Trustee and the Company from the Person or Persons who gave such Blockage
Notice, (b) by repayment in full of such Designated Senior Indebtedness or (c)
because the default giving rise to such Blockage Notice is no longer
continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Company may resume
payments on the Securities after the end of such Payment Blockage Period,
including any missed payments. Not more than one Blockage Notice may be given
in

 

65

 

any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period; provided, however, that if any Blockage Notice
within such 360-day period is given by or on behalf of any holders of
Designated Senior Indebtedness other than the Bank Indebtedness, the
Representative of the Bank Indebtedness may give another Blockage Notice within
such period; provided further, however, that in no event may the total number
of days during which any Payment Blockage Period or Periods is in effect exceed
179 days in the aggregate during any 360 consecutive day period. For purposes
of this Section, no default or event of default that existed or was continuing
on the date of the commencement of any Payment Blockage Period with respect to
the Designated Senior Indebtedness initiating such Payment Blockage Period
shall be, or be made, the basis of the commencement of a subsequent Payment
Blockage Period by the Representative of such Designated Senior Indebtedness,
whether or not within a period of 360 consecutive days, unless such default or
event of default shall have been cured or waived for a period of not less than
90 consecutive days.

 

SECTION 10.04              Acceleration of Payment of Securities. If payment
of the Securities is accelerated because of an Event of Default, the Company or
the Trustee shall promptly notify the holders of the Designated Senior
Indebtedness of the Company (or their Representative) of the acceleration. If
any Designated Senior Indebtedness of the Company is outstanding, the Company
may not pay the Securities until five Business Days after such holders or the
Representative of such Designated Senior Indebtedness receive notice of such
acceleration and, thereafter, may pay the Securities only if this Article 10
otherwise permits payment at that time.

 

SECTION 10.05              When Distribution Must Be Paid Over. If a payment
or distribution is made to Holders that because of this Article 10 should not
have been made to them, the Holders who receive the distribution shall hold
such payment or distribution in trust for holders of Senior Indebtedness of the
Company and pay it over to them as their interests may appear.

 

SECTION 10.06              Subrogation. After all Senior Indebtedness of the
Company is paid in full and until the Securities are paid in full, Holders
shall be subrogated to the rights of holders of such Senior Indebtedness to
receive distributions applicable to Senior Indebtedness. A distribution made
under this Article 10 to holders of such Senior Indebtedness which otherwise
would have been made to Holders is not, as between the Company and Holders, a
payment by the Company on such Senior Indebtedness.

 

SECTION 10.07              Relative Rights. This Article 10 defines the
relative rights of Holders and holders of Senior Indebtedness of the Company. Nothing
in this Indenture shall:

 

(a)                                  impair,
as between the Company and Holders, the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest on the Securities
in accordance with their terms; or

 

(b)                                 prevent
the Trustee or any Holder from exercising its available remedies upon a
Default, subject to the rights of holders of Senior Indebtedness of the Company
to receive distributions otherwise payable to Holders.

 

66

 

SECTION 10.08              Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of the Company to enforce the subordination
of the Indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.

 

SECTION 10.09              Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than three
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article 10. The Company, the Registrar, the Paying Agent, a Representative
or a holder of Senior Indebtedness of the Company may give the notice;
provided, however, that, if an issue of Senior Indebtedness of the Company has
a Representative, only the Representative may give the notice.

 

The Trustee in
its individual or any other capacity may hold Senior Indebtedness of the Company
with the same rights it would have if it were not Trustee. The Registrar and
the Paying Agent may do the same with like rights. The Trustee shall be
entitled to all the rights set forth in this Article 10 with respect to any
Senior Indebtedness of the Company which may at any time be held by it, to the
same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 10 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07 or any other Section of this Indenture.

 

SECTION 10.10              Distribution or Notice to Representative. Whenever
a distribution is to be made or a notice given to holders of Senior
Indebtedness of the Company, the distribution may be made and the notice given
to their Representative (if any).

 

SECTION 10.11              Article 10 Not to Prevent Events of Default or Limit Right
To Accelerate. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article 10 shall not be construed
as preventing the occurrence of a Default. Nothing in this Article 10 shall
have any effect on the right of the Holders or the Trustee to accelerate the
maturity of the Securities.

 

SECTION 10.12              Trust Monies Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness of the Company or
subject to the restrictions set forth in this Article 10, and none of the
Holders shall be obligated to pay over any such amount to the Company or any
holder of Senior Indebtedness of the Company or any other creditor of the
Company.

 

SECTION 10.13              Trustee Entitled to Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Holders shall be
entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
10.02 are pending, (b) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to the
Holders or (c) upon

 

67

 

the Representatives for the holders of Senior
Indebtedness of the Company for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Indebtedness 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 10. In the event that the
Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness of the Company to
participate in any payment or distribution pursuant to this Article 10, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to the rights of such
Person under this Article 10, 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. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 10.

 

SECTION 10.14     Trustee to
Effectuate Subordination. Each Holder by accepting a Security
authorizes and directs the Trustee on his, her or its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of the
Company as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.

 

SECTION 10.15     Trustee Not
Fiduciary for Holders of Senior Indebtedness. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of
the Company and shall not be liable to any such holders if it shall mistakenly
pay over or distribute to Holders or the Company or any other Person, money or
assets to which any holders of Senior Indebtedness of the Company shall be
entitled by virtue of this Article 10 or otherwise.

 

SECTION 10.16     Reliance by
Holders of Senior Indebtedness on Subordination Provisions. Each
Holder by accepting a Security acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness of the Company, whether
such Senior Indebtedness was created or acquired before or after the issuance
of the Securities, to acquire and continue to hold, or to continue to hold,
such Senior Indebtedness and such holder of such Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.

 

ARTICLE 11

 

Note Guarantees

 

SECTION 11.01     Note Guarantees.
(a)  Each Note Guarantor hereby jointly
and severally and unconditionally guarantees, as a primary obligor and not
merely as a surety, to each Holder and to the Trustee and its successors and
assigns (i) the full and punctual payment when due, whether at Stated Maturity,
by acceleration, by redemption or otherwise, of all obligations of the Company
under this Indenture (including obligations to the Trustee) and the Securities,
whether for payment of principal of or interest on the Securities and all other
monetary obligations (to the fullest extent permitted by applicable law) of the
Company under

 

68

 

this Indenture and the Securities and (ii)
the full and punctual performance within applicable grace periods of all other
obligations of the Company whether for fees, expenses, indemnification or
otherwise under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the “Guaranteed Obligations”). To the fullest
extent permitted by applicable law, each Note Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed, in whole or in part, without
notice or further assent from each such Note Guarantor, and that each such Note
Guarantor shall remain bound under this Article 11 notwithstanding any
extension or renewal of any Guaranteed Obligation.

 

(b)           Each Note Guarantor waives
presentation to, demand of payment from and protest to the Company of any of
the Guaranteed Obligations and also waives notice of protest for nonpayment. Each
Note Guarantor waives notice of any default under the Securities or the Guaranteed
Obligations. The obligations of each Note Guarantor hereunder shall not be
affected by (i) the failure of any Holder or the Trustee to assert any claim or
demand or to enforce any right or remedy against the Company or any other
Person under this Indenture, the Securities or any other agreement or
otherwise; (ii) any extension or renewal of any thereof; (iii) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Securities or any other agreement; (iv) the release of any
security held by any Holder or the Trustee for the Guaranteed Obligations or
any of them; (v) the failure of any Holder or Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations; or (vi) any
change in the ownership of such Note Guarantor, except as provided in Section
11.02(b).

 

(c)           Each Note Guarantor hereby waives any
right to which it may be entitled to have its obligations hereunder divided
among the Note Guarantors, such that such Note Guarantor’s obligations would be
less than the full amount claimed. Each Note Guarantor hereby waives any right
to which it may be entitled to have the assets of the Company first be used and
depleted as payment of the Company’s or such Note Guarantor’s obligations
hereunder prior to any amounts being claimed from or paid by such Note
Guarantor hereunder. Each Note Guarantor hereby waives any right to which it
may be entitled to require that the Company be sued prior to an action being
initiated against such Note Guarantor.

 

(d)           Each Note Guarantor further agrees
that its Note Guarantee herein constitutes a guarantee of payment, performance
and compliance when due (and not a guarantee of collection) and waives any
right to require that any resort be had by any Holder or the Trustee to any
security held for payment of the Guaranteed Obligations.

 

(e)           The Note Guarantee of each Note
Guarantor is, to the extent and in the manner set forth in Article 12,
subordinated and subject in right of payment to the prior payment in full of
the principal of and premium, if any, and interest on all Senior Indebtedness
of the relevant Note Guarantor and is made subject to such provisions of this
Indenture.

 

(f)            Except as expressly set forth in
Sections 8.01(b), 11.02 and 11.06, the obligations of each Note Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or

 

69

 

unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Note Guarantor herein shall not be discharged or impaired
or otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities
or any other agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
any Note Guarantor or would otherwise operate as a discharge of any Note
Guarantor as a matter of law or equity.

 

(g)           Each Note Guarantor agrees that its
Note Guarantee shall remain in full force and effect until payment in full of
all the Guaranteed Obligations or such Note Guarantee is released upon the
merger or the sale of all the Capital Stock or assets of the Note Guarantor in
compliance with Section 4.06 or Article 5. Each Note Guarantor further agrees
that its Note Guarantee herein shall, to the fullest extent permitted by
applicable law, continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of principal of or interest on any
Guaranteed Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.

 

(h)           In furtherance of the foregoing and
not in limitation of any other right which any Holder or the Trustee has at law
or in equity against any Note Guarantor by virtue hereof, upon the failure of
the Company to pay the principal of or interest on any Guaranteed Obligation
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Guaranteed
Obligation, each Note Guarantor hereby promises to and shall, upon receipt of
written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to
the Holders or the Trustee an amount equal to the sum of (i) the unpaid
principal amount of such Guaranteed Obligations, (ii) accrued and unpaid
interest on such Guaranteed Obligations (but only to the extent not prohibited
by law) and (iii) all other monetary obligations of the Company to the Holders
and the Trustee.

 

(i)            Each Note Guarantor agrees that it
shall not be entitled to any right of subrogation in relation to the Holders in
respect of any Guaranteed Obligations guaranteed hereby until payment in full
of all Guaranteed Obligations and all obligations to which the Guaranteed
Obligations are subordinated as provided in Article 12. Each Note Guarantor
further agrees that, as between it, on the one hand, and the Holders and the
Trustee, on the other hand, to the fullest extent permitted by applicable law,
(i) the maturity of the Guaranteed Obligations guaranteed hereby may be
accelerated as provided in Article 6 for the purposes of any Note Guarantee
herein, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Guaranteed Obligations guaranteed hereby,
and (ii) in the event of any declaration of acceleration of such Guaranteed
Obligations as provided in Article 6, such Guaranteed Obligations (whether or
not due and payable) shall forthwith become due and payable by such Note
Guarantor for the purposes of this Section 11.01.

 

(j)            Each Note Guarantor also agrees to
pay any and all costs and expenses (including reasonable attorneys’ fees and
expenses) incurred by the Trustee or any Holder in enforcing any rights under
this Section 11.01.

 

70

 

(k)           Upon request of the Trustee, each
Note Guarantor shall execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

 

SECTION 11.02     Limitation on
Liability. (a)  Any term or
provision of this Indenture to the contrary notwithstanding, the maximum
aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Note
Guarantor shall not exceed the maximum amount that can be hereby guaranteed
without rendering this Indenture, as it relates to such Note Guarantor, void or
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of creditors generally.

 

(b)           A Note Guarantee as to any Note
Guarantor that is a Subsidiary of the Company shall terminate and be of no
further force or effect and such Note Guarantor shall be deemed to be released
from all obligations under this Article 11 upon (A) the merger or consolidation
of such Note Guarantor with or into any Person other than the Company or a
Subsidiary or Affiliate of the Company where such Note Guarantor is not the
surviving entity of such consolidation or merger or (B) the sale by the Company
or any Subsidiary of the Company (or any pledgee of the Company) of the Capital
Stock of such Note Guarantor (or by any other Person as a result of a
foreclosure of any lien on such Capital Stock securing Senior Indebtedness),
where, after such sale, such Note Guarantor is no longer a Subsidiary of the
Company; provided, however, that each such merger, consolidation or sale (or,
in the case of a sale by such a pledgee, the disposition of the proceeds of
such sale actually received by the Company or any of its Subsidiaries) shall
(i) comply with Section 4.06 and Section 5.01(b) and (ii) be contingent upon
such Note Guarantor being released from its Guarantee of, and all pledges and
security interests granted in connection with, the Credit Agreement and any
other Indebtedness of the Company or any Subsidiary of the Company.

 

(c)           In addition, a Note Guarantee of any
Note Guarantor that is a Subsidiary of the Company shall terminate and be of no
further force or effect and such Note Guarantor shall be deemed to be released
from all obligations under this Article 11 upon the Issuer’s designation of
such Note Guarantor as an Unrestricted Subsidiary, provided that such
designation complies with the other applicable provisions of this Indenture.

 

At the request
of the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release (in the form provided by the Company).

 

SECTION 11.03     Successors and
Assigns. This Article 11 shall be binding upon each Note Guarantor
and its successors and assigns and shall inure to the benefit of the successors
and assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Securities shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.

 

SECTION 11.04     No Waiver.
Neither a failure nor a delay on the part of either the Trustee or the Holders
in exercising any right, power or privilege under this Article 11 shall operate
as a waiver thereof, nor shall a single or partial exercise thereof preclude
any other or further exercise of any right, power or privilege. The rights,
remedies and benefits of the

 

71

 

Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits which either may have under this Article 11 at law, in equity, by
statute or otherwise.

 

SECTION 11.05     Modification.
No modification, amendment or waiver of any provision of this Article 11, nor
the consent to any departure by any Note Guarantor therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand
on any Note Guarantor in any case shall entitle such Note Guarantor to any
other or further notice or demand in the same, similar or other circumstances.

 

SECTION 11.06     Execution of
Supplemental Indenture for Future Note Guarantors. Each Subsidiary
which is required to become a Note Guarantor pursuant to Section 4.11 shall
promptly execute and deliver to the Trustee a supplemental indenture in the
form of Exhibit B hereto pursuant to which such Subsidiary shall become a Note
Guarantor under this Article 11 and shall guarantee the Guaranteed Obligations.
Concurrently with the execution and delivery of such supplemental indenture,
the Company shall deliver to the Trustee an Opinion of Counsel and an Officers’
Certificate to the effect that such supplemental indenture has been duly
authorized, executed and delivered by such Subsidiary and that, subject to the
application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and other similar laws relating to creditors’ rights generally and to
the principles of equity, whether considered in a proceeding at law or in
equity, the Note Guarantee of such Note Guarantor is a valid and binding
obligation of such Note Guarantor, enforceable against such Note Guarantor in
accordance with its terms and or to such other matters as the Trustee may
reasonably request.

 

SECTION 11.07     Non-Impairment.
The failure to endorse a Note Guarantee on any Security shall not affect or
impair the validity thereof.

 

ARTICLE 12

 

Subordination of the Note Guarantees

 

SECTION 12.01     Agreement To
Subordinate. Each Note Guarantor agrees, and each Holder by
accepting a Security agrees, that the obligations of a Note Guarantor hereunder
are subordinated in right of payment, to the extent and in the manner provided
in this Article 12, to the prior payment in full of all Senior Indebtedness of
such Note Guarantor and that the subordination is for the benefit of and
enforceable by the holders of such Senior Indebtedness of such Note Guarantor. The
obligations hereunder with respect to a Note Guarantor shall in all respects
rank pari passu with all other Senior Subordinated Indebtedness of such Note
Guarantor and shall rank senior to all existing and future Subordinated
Obligations of such Note Guarantor; and only Indebtedness of such Note Guarantor
that is Senior Indebtedness of such Note Guarantor shall rank senior to the
obligations of such Note Guarantor in accordance with the provisions set forth
herein.

 

SECTION 12.02     Liquidation,
Dissolution, Bankruptcy. Upon any payment or distribution of the
assets of a Note Guarantor to creditors upon a total or partial liquidation or

 

72

 

a total or partial dissolution of such Note
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to such Note Guarantor and its properties:

 

(a)           holders of Senior
Indebtedness of such Note Guarantor shall be entitled to receive payment in
full of such Senior Indebtedness before Holders shall be entitled to receive
any payment pursuant to any Guaranteed Obligations from such Note Guarantor;
and

 

(b)           until the Senior
Indebtedness of such Note Guarantor is paid in full, any payment or
distribution to which Holders would be entitled but for this Article 12 shall
be made to holders of such Senior Indebtedness as their respective interests
may appear, except that Holders may receive Capital Stock and any debt
securities that are subordinated to such Senior Indebtedness to at least the
same extent as the Note Guarantees.

 

SECTION 12.03     Default on
Designated Senior Indebtedness of a Note Guarantor. A Note Guarantor
may not make any payment pursuant to any of the Guaranteed Obligations or
repurchase, redeem or otherwise retire any Securities (collectively, “pay its
Guarantee”) if (a) any Designated Senior Indebtedness of such Note Guarantor is
not paid when due or (b) any other default on Designated Senior Indebtedness of
such Note Guarantor occurs and the maturity of such Designated Senior
Indebtedness is accelerated in accordance with its terms unless, in either
case, (i) the default has been cured or waived and any such acceleration has
been rescinded or (ii) such Designated Senior Indebtedness has been paid in
full; provided, however, that such Note Guarantor may pay its Guarantee without
regard to the foregoing if such Note Guarantor and a Trust Officer of the
Trustee receive written notice approving such payment from the Representative
of the holders of such Designated Senior Indebtedness with respect to which
either of the events in clause (a) or (b) of this sentence has occurred and is
continuing. During the continuance of any default (other than a default
described in clause (a) or (b) of the preceding sentence) with respect to any
Designated Senior Indebtedness of a Note Guarantor pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration
of any applicable grace periods, such Note Guarantor may not pay its Guarantee
for a period (a “Guarantee Payment Blockage Period”) commencing upon the
receipt by a Trust Officer of the Trustee (with a copy to such Note Guarantor
and the Company) of written notice specified as a “notice of default” and
describing with particularity the default under such Designated Senior
Indebtedness (a “Guarantee Blockage Notice”) of such default from the
Representative of the holders of the Designated Senior Indebtedness of such
Note Guarantor specifying an election to effect a Guarantee Payment Blockage
Period and ending 179 days thereafter (or earlier if such Guarantee Payment
Blockage Period is terminated (a) by written notice to the Trustee (with a copy
to such Note Guarantor and the Company) from the Person or Persons who gave
such Guarantee Blockage Notice, (b) because such Designated Senior Indebtedness
has been repaid in full or (c) because the default giving rise to such
Guarantee Blockage Notice is no longer continuing). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section 12.03), unless the
holders of such Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, such Note Guarantor may resume paying its Note Guarantee after
such Guarantee Payment Blockage Period, including any

 

73

 

missed payments. Not more than one Guarantee
Blockage Notice may be given with respect to a Note Guarantor in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness of such Note Guarantor during such period;
provided, however, that if any Guarantee Blockage Notice within such 360-day
period is given by or on behalf of any holders of Designated Senior
Indebtedness of such Note Guarantor other than the Bank Indebtedness, the
Representative of the Bank Indebtedness may give another Guarantee Blockage
Notice within such period; provided further, however, that in no event may the
total number of days during which any Guarantee Payment Blockage Period or
Periods is in effect exceed 179 days in the aggregate during any 360
consecutive day period. For purposes of this Section 12.03, no default or event
of default that existed or was continuing on the date of the commencement of
any Guarantee Payment Blockage Period with respect to the Designated Senior
Indebtedness initiating such Guarantee Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Guarantee Payment Blockage
Period by the Representative of such Designated Senior Indebtedness, whether or
not within a period of 360 consecutive days, unless such default or event of
default shall have been cured or waived for a period of not less than 90
consecutive days.

 

SECTION 12.04     Demand for Payment.
If payment of the Securities is accelerated because of an Event of Default and
a demand for payment is made on a Note Guarantor pursuant to Article 11, the
Trustee (provided that a Trust Officer of the Trustee shall have received
written notice from the Company, such Note Guarantor or a Representative
identifying such Designated Senior Indebtedness, on which notice the Trustee
shall be entitled to conclusively rely) shall promptly notify the holders of
the Designated Senior Indebtedness of such Note Guarantor (or the
Representative of such holders) of such demand. If any Designated Senior
Indebtedness of such Note Guarantor is outstanding, such Note Guarantor may not
pay its Guarantee until five Business Days after such holders or the
Representative of the holders of the Designated Senior Indebtedness of such
Note Guarantor receive notice of such demand and, thereafter, may pay its
Guarantee only if this Article 12 otherwise permits payment at that time.

 

SECTION 12.05     When Distribution
Must Be Paid Over. If a payment or distribution is made to Holders
that because of this Article 12 should not have been made to them, the Holders
who receive the payment or distribution shall hold such payment or distribution
in trust for holders of the Senior Indebtedness of the relevant Note Guarantor
and pay it over to them as their respective interests may appear.

 

SECTION 12.06     Subrogation.
After all Senior Indebtedness of a Note Guarantor is paid in full and until the
Securities are paid in full in cash, Holders shall be subrogated to the rights
of holders of Senior Indebtedness of such Note Guarantor to receive
distributions applicable to Designated Senior Indebtedness of such Note
Guarantor. A distribution made under this Article 12 to holders of Senior
Indebtedness of such Note Guarantor which otherwise would have been made to
Holders is not, as between such Note Guarantor and Holders, a payment by such
Note Guarantor on Senior Indebtedness of such Note Guarantor.

 

SECTION 12.07     Relative Rights.
This Article 12 defines the relative rights of Holders and holders of Senior
Indebtedness of a Note Guarantor. Nothing in this Indenture shall:

 

74

 

(a)           impair, as between a
Note Guarantor and Holders, the obligation of a Note Guarantor which is
absolute and unconditional, to make payments with respect to the Guaranteed
Obligations to the extent set forth in Article 11; or

 

(b)           prevent the Trustee
or any Holder from exercising its available remedies upon a default by a Note
Guarantor under its obligations with respect to the Guaranteed Obligations,
subject to the rights of holders of Senior Indebtedness of such Note Guarantor to
receive distributions otherwise payable to Holders.

 

SECTION 12.08     Subordination May
Not Be Impaired by a Note Guarantor. No right of any holder of
Senior Indebtedness of a Note Guarantor to enforce the subordination of the
obligations of such Note Guarantor hereunder shall be impaired by any act or
failure to act by such Note Guarantor or by its failure to comply with this
Indenture.

 

SECTION 12.09     Rights of Trustee
and Paying Agent. Notwithstanding Section 12.03, the Trustee or the
Paying Agent may continue to make payments on the Guaranteed Obligations and
shall not be charged with knowledge of the existence of facts that would
prohibit the making of any such payments unless, not less than three Business
Days prior to the date of such payment, a Trust Officer of the Trustee receives
written notice satisfactory to it that payments may not be made under this
Article 12. A Note Guarantor, the Registrar or co-registrar, the Paying Agent,
a Representative or a holder of Senior Indebtedness of a Note Guarantor may
give the notice; provided, however, that if an issue of Senior Indebtedness of
a Note Guarantor has a Representative, only the Representative may give the
notice.

 

The Trustee in
its individual or any other capacity may hold Senior Indebtedness of a Note
Guarantor with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 12 with respect to any Senior Indebtedness of a Note Guarantor which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness of such Note Guarantor; and nothing in Article 7 shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article 12 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
7.07 or any other Section of this Indenture.

 

SECTION 12.10     Distribution or
Notice to Representative. Whenever a distribution is to be made or a
notice given to holders of Senior Indebtedness of a Note Guarantor, the
distribution may be made and the notice given to their Representative (if any).

 

SECTION 12.11     Article 12 Not To
Prevent Events of Default or Limit Right To Accelerate. The failure
of a Note Guarantor to make a payment on any of its Guaranteed Obligations by
reason of any provision in this Article 12 shall not be construed as preventing
the occurrence of a default by such Note Guarantor under such obligations. Nothing
in this Article 12 shall have any effect on the right of the Holders or the
Trustee to make a demand for payment on a Note Guarantor pursuant to Article
11.

 

SECTION 12.12     Trustee Entitled
To Rely. Upon any payment or distribution pursuant to this Article
12, the Trustee and the Holders shall be entitled to rely (a) upon any order or
decree of a court of competent jurisdiction in which any proceedings of the

 

75

 

nature referred to in Section 12.02 are
pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the Holders or
(c) upon the Representatives for the holders of Senior Indebtedness of a Note
Guarantor for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness of a
Note Guarantor and other Indebtedness of a Note 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 12. In the event that the
Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness of a Note Guarantor
to participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such
Note Guarantor held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 12, 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. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 12.

 

SECTION 12.13     Trustee To
Effectuate Subordination. Each Holder by accepting a Security
authorizes and directs the Trustee on his, her or its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of
each of the Note Guarantors as provided in this Article 12 and appoints the
Trustee as attorney-in- fact for any and all such purposes.

 

SECTION 12.14     Trustee Not
Fiduciary for Holders of Senior Indebtedness of a Note Guarantor. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of a Note Guarantor and shall not be liable to any such holders if
it shall mistakenly pay over or distribute to Holders or the relevant Note
Guarantor or any other Person, money or assets to which any holders of Senior
Indebtedness of such Note Guarantor shall be entitled by virtue of this Article
12 or otherwise.

 

SECTION 12.15     Reliance by
Holders of Senior Indebtedness of a Note Guarantor on Subordination Provisions.
Each Holder by accepting a Security acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness of a Note Guarantor,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.

 

SECTION 12.16     Defeasance.
The terms of this Article 12 shall not apply to payments from money or the
proceeds of U.S. Government Obligations held in trust by the Trustee for the
payment of principal of and interest on the Securities pursuant to the
provisions described in Section 8.03.

 

76

 

ARTICLE 13

 

Miscellaneous

 

SECTION 13.01     Trust Indenture
Act Controls. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by, or with
another provision (an “incorporated provision”) included in this Indenture by
operation of, TIA Sections 310 to 318, inclusive, such imposed duties or
incorporated provision shall control.

 

SECTION 13.02     Notices.
Any notice or communication shall be in writing (which may be a facsimile with
the original to follow) and delivered in person or mailed by first-class mail
addressed as follows:

 

	
   

  	
   

  	
  if to the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Pliant Corporation

  
	
   

  	
   

  	
  1475 Woodfield Road, Suite 700

  
	
   

  	
   

  	
  Schaumburg, Illinois 60173

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention of:

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to the Trustee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
  2 North LaSalle Street, Suite 1020

  
	
   

  	
   

  	
  Chicago, IL 60602

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention of:

  
	
   

  	
   

  	
  Corporate Trust Administration

  

 

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

 

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

 

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

 

SECTION 13.03     Communication by
Holders with Other Holders. Holders may communicate pursuant to TIA
Section 312(b) with other Holders with respect to their rights

 

77

 

under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else 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 or refrain from taking any action under
this Indenture, the Company shall furnish to the Trustee:

 

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

 

(b)           an Opinion of
Counsel in form reasonably satisfactory to the Trustee stating that, in the
opinion of such counsel, all such conditions precedent have been complied with
(provided, however, that such counsel may rely as to matters of fact on
Officers’ Certificates).

 

SECTION 13.05     Statements
Required in Certificate or Opinion. Each certificate or opinion with
respect to compliance with a covenant or condition provided for in this
Indenture (other than pursuant to Section 4.09) shall include:

 

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

 

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

 

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

 

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

 

SECTION 13.06     When Securities
Disregarded. In determining whether the Holders of the required
principal amount of Securities have concurred in any direction, waiver or
consent, Securities owned by the Company, any Note Guarantor or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any Note Guarantor (other than JP Morgan
Securities, Inc.) shall be disregarded and deemed not to be outstanding, except
that, for the purpose of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities which the Trustee
knows are so owned shall be so disregarded. Subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.

 

SECTION 13.07     Rules by Trustee,
Paying Agent and Registrar. The Trustee may make reasonable rules
for action by or a meeting of Holders. The Registrar and the Paying Agent may
make reasonable rules for their functions.

 

78

 

SECTION 13.08     Legal Holidays.
A “Legal Holiday” is a Saturday, a Sunday or other day on which banking
institutions are not required by law or regulation to be open in the State of
New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.

 

SECTION 13.09     GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

SECTION 13.10     No Recourse
Against Others. A director, officer, employee or stockholder, as
such, of the Company or any of the Note Guarantors, shall not have any
liability for any obligations of the Company or any of the Note Guarantors
under the Securities or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Holder shall waive and release all such liability. The waiver and release
shall be part of the consideration for the issue of the Securities.

 

SECTION 13.11     Successors.
All agreements of the Company and each Note Guarantor in this Indenture and the
Securities shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.

 

SECTION 13.12     Multiple Originals.
The parties may sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Indenture.

 

SECTION 13.13     Table of Contents;
Headings. The table of contents, cross-reference sheet and headings
of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.

 

SECTION 13.14     Waiver of Jury Trial. EACH OF THE
COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE
TRANSACTION CONTEMPLATED HEREBY.

 

SECTION 13.15     Force Majeure. In no event shall the
Trustee be responsible or liable for any failure or delay in the performance of
its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the

 

79

 

Trustee shall use reasonable efforts which
are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.

 

[Rest of page intentionally left blank]

 

80

 

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

 

	
   

  	
   

  	
  PLIANT CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joseph Kwederis

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph Kwederis

  
	
   

  	
   

  	
   

  	
  Senior Vice President and Chief Financial

  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PLIANT CORPORATION INTERNATIONAL,

  
	
   

  	
   

  	
  PLIANT FILM PRODUCTS OF MEXICO, INC.,

  
	
   

  	
   

  	
  PLIANT SOLUTIONS CORPORATION,

  
	
   

  	
   

  	
  UNIPLAST HOLDINGS, INC.,

  
	
   

  	
   

  	
  UNIPLAST U.S., INC.,

  
	
   

  	
   

  	
  UNIPLAST INDUSTRIES CO.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joseph Kwederis

  	
   

  
	
   

  	
   

  	
   

  	
  Joseph Kwederis

  
	
   

  	
   

  	
   

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PLIANT PACKAGING OF CANADA, LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Harold C. Bevis

  	
   

  
	
   

  	
   

  	
   

  	
  Harold C. Bevis

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF NEW YORK TRUST COMPANY,

  N.A., as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
									

 

81

 

APPENDIX A

PROVISIONS RELATING TO SECURITIES

 

1.             Definitions

 

For the
purposes of this Appendix A the following terms shall have the meanings
indicated below:

 

“Agent
Members” shall have the meaning set forth in Section 2.1(c) of this
Appendix A.

 

“Applicable
Procedures” means with respect to any transfer, redemption or exchange of
or for beneficial interests in any Global Security, the rules and procedures of
the Depositary that apply to such transfer, redemption or exchange.

 

“Definitive Security” means a certificated
Security that does not bear the Global Securities Legend.

 

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

 

“Distribution
Compliance Period” means the 40-day distribution compliance period as
defined in Regulation S.

 

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

 

“Global
Security” means a Security that bears the Global Security Legend.

 

“Global
Securities Legend” means the legend set forth under that caption in Section
2.3(f)(ii) of this Appendix A.

 

“IAI”
means an institutional “accredited investor” as described in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act.

 

“IAI Global
Security” has the meaning set forth in Section 2.1(b) of this Appendix A.

 

“Indirect
Participant” means a Person who holds a beneficial interest in a Global
Security through a Participant.

 

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

 

“Private
Placement Legend” means the legend set
forth under that caption in Section 2.3(f)(i) of this Appendix A.

 

“QIB”
means a “qualified institutional buyer” as defined in Rule 144A

 

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

 

 

“Regulation
S Global Security” has the meaning set forth in Section 2.1(b) of this Appendix
A.

 

“Restricted
Definitive Security” means one or more Definitive Securities bearing the
Private Placement Legend.

 

“Restricted
Global Security” means the IAI Global Security, the Rule 144A Global
Security and the Regulation S Global Security.

 

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

 

“Rule 144A
Global Security” has the meaning set forth in Section 2.1(b) of this
Appendix A.

 

“Rule 501”
means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

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

 

“Securities
Custodian” means the custodian with respect to a Global Security (as
appointed by the Depositary) or any successor person thereto, who shall
initially be the Trustee.

 

“Unrestricted Definitive Security” means one or more
Definitive Securities that do not and are not required to bear the Private
Placement Legend.

 

“Unrestricted
Global Security” means one or more Global Securities that do not and are
not required to bear the Private Placement Legend and are deposited with and
registered in the name of the Depositary or its nominee.

 

All terms not
otherwise defined in this Appendix A shall have the respective meanings
ascribed to them in the Indenture.

 

2.             The Securities

 

2.1           Form and Dating

 

(a)           The Securities
issued on the date hereof will be issued by the Company only to Persons who
constitute both IAIs and QIBs pursuant to an exemption from the registration
requirements of Section 5 of the Securities Act. Subject to the restrictions
set forth herein, such Securities may thereafter be transferred in accordance
with applicable law to QIBs in reliance on Rule 144A, purchasers in reliance on
Regulation S, IAIs in accordance with Rule 501 or as otherwise permitted
hereby.

 

(b)           Global Securities.
The Securities shall be issued initially in the form of one or more global
Securities in definitive, fully registered form (collectively, the “Rule 144A Global
Security”) without interest coupons and bearing the Global Securities Legend
and Restricted Securities Legend, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Securities Custodian,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by the Company and authenticated by the Trustee

 

2

 

as provided in
this Indenture. One or more global securities in definitive, fully registered
form without interest coupons and bearing the Global Securities Legend and the
Restricted Securities Legend (collectively, the “IAI Global Security”) and one
or more global securities in definitive, fully registered form without interest
coupons and bearing the Global Securities Legend and the Restricted Securities
Legend (collectively, the “Regulation S Global Security”). in each case shall
also be issued on the Closing Date, deposited with the Securities Custodian,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by the Company and authenticated by the Trustee as provided in this
Indenture to accommodate transfers of beneficial interest in the Securities to IAIs
and in transactions pursuant to Regulation S subsequent to the initial issuance
of the Securities. The aggregate principal amount of the Global Securities may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary or its nominee and on the schedules thereto
as hereinafter provided.

 

(c)           Book-entry
Provisions. This Section 2.1(c) shall apply only to a Global Security deposited
with or on behalf of the Depositary.

 

The Company
shall execute and the Trustee shall, in accordance with this Section 2.1(c) and
Section 2.2 and pursuant to an order of the Company signed by two Officers,
authenticate and deliver initially one or more Global Securities that
(i) shall be registered in the name of the Depositary for such Global
Security or Global Securities or the nominee of such Depositary and (ii) shall
be delivered by the Trustee to such Depositary or pursuant to such Depositary’s
instructions or held by the Trustee as Securities Custodian.

 

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

 

(d)           Definitive
Securities. Except as provided in Sections 2.3 or 2.4, owners of beneficial
interests in Global Securities will not be entitled to receive physical
delivery of certificated Securities.

 

2.2           Authentication.
The Trustee shall authenticate and make available for delivery, upon a written
order of the Company signed by two Officers, Securities for original issue on
the date hereof in an aggregate principal amount not to exceed $24,000,000. Such
order shall specify the amount of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not exceed
$24,000,000, except as provided in Sections 2.07 and 2.08.

 

3

 

2.3           Transfer and
Exchange.

 

(a)           Transfer
and Exchange of Global Securities. A Global Security may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. Upon the occurrence of any of the
events set forth in Section 2.4(a) of this Appendix A, Definitive Securities
shall be issued in denominations of $1.00 or integral multiples thereof and in
such names as the Depositary shall instruct the Trustee in writing. Global
Securities also may be exchanged or replaced, in whole or in part, as provided
in Section 2.07 of this Indenture. Except as provided above, every Security authenticated
and delivered in exchange for, or in lieu of, a Global Security or any portion
thereof, pursuant to this Section 2.3 or Section 2.07 of the Indenture, shall
be authenticated and delivered in the form of, and shall be, a Global Security.
A Global Security may not be exchanged for another Security other than as
provided in this Section 2.3(a), and beneficial interests in a Global Security
may not be transferred and exchanged other than as provided in Section 2.3(b)
or (c) hereof.

 

(b)           Transfer
and Exchange of Beneficial Interests in the Global Securities. The
transfer and exchange of beneficial interests in the Global Securities shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Securities shall be subject to restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Transfers
of beneficial interests in Global Securities also shall require compliance with
either clause (i) or (ii) below, as applicable, as well as one or more of the
other following clauses, as applicable:

 

(i)            Transfer of Beneficial Interests
in the Same Global Security. Beneficial interests in any Restricted Global
Security may be transferred to Persons who take delivery thereof in the form of
a beneficial interest in the same Restricted Global Security in accordance with
the transfer restrictions set forth in the Private Placement Legend and any
Applicable Procedures. Beneficial interests in any Unrestricted Global Security
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security. Except as may be
required by any Applicable Procedures, no written orders or instructions shall
be required to be delivered to the Registrar to effect the transfers described
in this Section 2.3(b)(i).

 

(ii)           All Other Transfers and Exchanges
of Beneficial Interests in Global Securities. In connection with all
transfers and exchanges of beneficial interests that are not subject to Section
2.3(b)(i) above, the transferor of such beneficial interest must deliver to the
Registrar either (A)(1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to credit or cause to be credited a beneficial
interest in another Global Security in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given in
accordance with the Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B)(1) if
permitted under Section 2.3(a), a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the Applicable

 

4

 

Procedures directing the Depositary to cause
to be issued a Definitive Security in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Security shall be registered to effect the transfer
or exchange referred to in (B)(1) above. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global
Securities contained in this Indenture and the Securities or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Security(s) pursuant to Section 2.3(g) hereof.

 

(iii)          Transfer of Beneficial Interests in
a Restricted Global Security to Another Restricted Global Security. A
holder of a beneficial interest in a Restricted Global Security may transfer
such beneficial interest to a Person who takes delivery thereof in the form of
a beneficial interest in another Restricted Global Security if the transfer
complies with the requirements of Section 2.3(b)(ii) above and the Registrar
receives the following:

 

(1)           if the transferee will take delivery
in the form of a beneficial interest in the 144A Global Security, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof or, if permitted by the
Applicable Procedures, item (3) thereof;

 

(2)           if the transferee will take delivery
in the form of a beneficial interest in the Regulation S Global Security, then
the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and

 

(3)           if the transferee is required by the
Applicable Procedures to take delivery in the form of a beneficial interest in
the IAI Global Security, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if applicable.

 

(iv)          Transfer or Exchange of Beneficial
Interests in a Restricted Global Security for Beneficial Interests in an
Unrestricted Global Security. A holder of a beneficial interest in a
Restricted Global Security may exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Security or may transfer such
beneficial interest to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Security only if the exchange or transfer
complies with the requirements of Section 2.3(b)(ii) above and:

 

(1)           the Registrar receives the following:

 

(A)          if the holder of such beneficial
interest in a Restricted Global Security proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global Security, a
certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or

 

5

 

(B)           if the holder of such beneficial
interest in a Restricted Global Security proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security, a certificate from such
holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof; and

 

(2)           in each such case, if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar to the effect that such exchange
or transfer complies with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

 

If any such transfer is effected at a time
when an Unrestricted Global Security has not yet been issued, the Company shall
execute and, upon receipt of an authentication order in accordance with Section
2.2 hereof, the Trustee shall authenticate one or more Unrestricted Global
Securities in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant hereto.

 

(v)           Transfer or Exchange of Beneficial
Interests in an Unrestricted Global Security for Beneficial Interests in a
Restricted Global Security Prohibited. Beneficial interests in an
Unrestricted Global Security may not be exchanged for, or transferred to
Persons who take delivery thereof in the form of, beneficial interests in a
Restricted Global Security.

 

(c)           Transfer
and Exchange of Beneficial Interests in Global Securities for Definitive
Securities.

 

(i)            Transfer or Exchange of
Beneficial Interests in Restricted Global Securities to Restricted Definitive Securities.
Subject to Section 2.3(a) hereof, if any holder of a beneficial interest in a
Restricted Global Security proposes to exchange such beneficial interest for a
Restricted Definitive Security or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Restricted Definitive
Security, then, upon receipt by the Registrar of the following documentation:

 

(1)           if the holder of such beneficial
interest in a Restricted Global Security proposes to exchange such beneficial interest
for a Restricted Definitive Security, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

 

(2)           if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item (1)
thereof;

 

(3)           if such beneficial interest is being
transferred to a “Non-U.S. Person” in an offshore transaction (as defined in
Section 902(k) of Regulation S) in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;

 

6

 

(4)           if such beneficial interest is being
transferred pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;

 

(5)           if such beneficial interest is being
transferred to an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than those
listed in clauses (2) through (4) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3)(d) thereof, if applicable; or

 

(6)           if such beneficial interest is being
transferred to the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof,

 

the Trustee shall reduce or cause to be reduced in a corresponding
amount pursuant to Section 2.3(g) hereof, the aggregate principal amount of the
applicable Restricted Global Security, and the Company shall execute and, upon
receipt of an authentication order in accordance with Section 2.2 hereof, the
Trustee shall authenticate and deliver a Restricted Definitive Security in the
appropriate principal amount to the Person designated by the holder of such
beneficial interest in the instructions delivered to the Registrar by the
Depositary and the applicable Participant or Indirect Participant on behalf of
such holder. Any Restricted Definitive Security issued in exchange for
beneficial interests in a Restricted Global Security pursuant to this Section
2.3 (c)(i) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest shall designate
in such instructions. The Trustee shall deliver such Restricted Definitive
Securities to the Persons in whose names such Securities are so registered. Any
Restricted Definitive Security issued in exchange for a beneficial interest in
a Restricted Global Security pursuant to this Section 2.3(c)(i) shall bear the
Private Placement Legend and shall be subject to all restrictions on transfer
contained therein.

 

(ii)           Transfer or Exchange of Beneficial
Interests in Restricted Global Securities to Unrestricted Definitive Securities.
Subject to Section 2.3(a) hereof, a holder of a beneficial interest in a
Restricted Global Security may exchange such beneficial interest for an
Unrestricted Definitive Security or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Security only if:

 

(1)           the Registrar receives the following:

 

(A)          if the holder of such beneficial
interest in a Restricted Global Security proposes to exchange such beneficial
interest for an Unrestricted Definitive Security, a certificate from such
holder in the form of Exhibit C hereto, including the certifications in item
(1)(b) thereof; or

 

7

 

(B)           if the holder of such beneficial
interest in a Restricted Global Security proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form of an
Unrestricted Definitive Security, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof; and

 

(2)           in each such case, if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar to the effect that such exchange
or transfer complies with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

 

Upon satisfaction of the
conditions of this Section 2.3(c)(ii), the Company shall execute and, upon
receipt of an authentication order in accordance with Section 2.2 hereof, the
Trustee shall authenticate and deliver an Unrestricted Definitive Security in
the appropriate principal amount to the Person designated by the holder of such
beneficial interest in instructions delivered to the Registrar by the
Depositary and the applicable Participant or Indirect Participant on behalf of
such holder, and the Trustee shall reduce or cause to be reduced in a
corresponding amount pursuant to Section 2.3(g), the aggregate principal amount
of the applicable Restricted Global Security.

 

(iii)          Transfer or Exchange of Beneficial
Interests in Unrestricted Global Securities to Unrestricted Definitive
Securities. Subject to Section 2.3 (a) hereof, if any holder of a
beneficial interest in an Unrestricted Global Security proposes to exchange
such beneficial interest for an Unrestricted Definitive Security or to transfer
such beneficial interest to a Person who takes delivery thereof in the form of
an Unrestricted Definitive Security, then, upon satisfaction of the applicable
conditions set forth in Section 2.3(b)(ii) hereof, the Trustee shall reduce or
cause to be reduced in a corresponding amount pursuant to Section 2.3(g)
hereof, the aggregate principal amount of the applicable Unrestricted Global
Security, and the Company shall execute, and, upon receipt of an authentication
order in accordance with Section 2.2 hereof, the Trustee shall authenticate and
deliver an Unrestricted Definitive Security in the appropriate principal amount
to the Person designated by the holder of such beneficial interest in
instructions delivered to the Registrar by the Depositary and the applicable
Participant or Indirect Participant on behalf of such holder. Any Unrestricted
Definitive Security issued in exchange for a beneficial interest pursuant to
this Section 2.3(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial interest
shall designate in such instructions. The Trustee shall deliver such
Unrestricted Definitive Securities to the Persons in whose names such
Securities are so registered. Any Unrestricted Definitive Security issued in
exchange for a beneficial interest pursuant to this Section 2.3(c)(iii) shall
not bear the Private Placement Legend.

 

(d)           Transfer
and Exchange of Definitive Securities for Beneficial Interests in the Global
Securities.

 

8

 

(i)            Transfer or Exchange of
Restricted Definitive Securities to Beneficial Interests in Restricted Global
Securities. If any holder of a Restricted Definitive Security proposes to
exchange such Restricted Definitive Security for a beneficial interest in a
Restricted Global Security or to transfer such Restricted Definitive Securities
to a Person who takes delivery thereof in the form of a beneficial interest in
a Restricted Global Security, then, upon receipt by the Registrar of the
following documentation:

 

(1)           if the holder of such Restricted
Definitive Security proposes to exchange such Restricted Definitive Security
for a beneficial interest in a Restricted Global Security, a certificate from
such holder in the form of Exhibit C hereto, including the certifications in
item (2)(b) thereof;

 

(2)           if such Restricted Definitive
Security is being transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;

 

(3)           if such Restricted Definitive
Security is being transferred to a “non-U.S. Person” in an offshore transaction
(as defined in Rule 902(k) of Regulation S) in accordance with Rule 903 or Rule
904, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;

 

(4)           if such Restricted Definitive
Security is being transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144, a certificate
to the effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;

 

(5)           if such Restricted Definitive
Security is being transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of the Securities
Act other than those listed in clauses (2) through (4) above, a certificate to
the effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)(d) thereof, if
applicable; or

 

(6)           if such Restricted Definitive
Security is being transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof,

 

the Trustee shall cancel the Restricted Definitive Security, increase
or cause to be increased in a corresponding amount pursuant to Section 2.3(g)
hereof, the aggregate principal amount of, in the case of clause (1) above, the
appropriate Restricted Global Security, in the case of clause (2) above, a 144A
Global Security, in the case of clause (3) above, a Regulation S Global
Security, and in all other cases, a IAI Global Security.

 

(ii)           Transfer or Exchange of Restricted
Definitive Securities to Beneficial Interests in Unrestricted Global Securities.
A holder of a Restricted Definitive Security may exchange such Restricted
Definitive Security for a beneficial interest in an Unrestricted Global
Security or transfer such Restricted Definitive Security to a Person

 

9

 

who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security only if:

 

(1)           the Registrar receives the following:

 

(A)          if the holder of such Restricted
Definitive Security proposes to exchange such Restricted Definitive Security
for a beneficial interest in an Unrestricted Global Security, a certificate
from such holder in the form of Exhibit C hereto, including the certifications
in item (1)(c) thereof; or

 

(B)           if the holder of such Restricted
Definitive Security proposes to transfer such Restricted Definitive Security to
a Person who shall take delivery thereof in the form of a beneficial interest
in an Unrestricted Global Security, a certificate from such Holder in the form
of Exhibit B hereto, including the certifications in item (4) thereof; and

 

(2)           in each such case, if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar to the effect that such exchange
or transfer complies with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

 

Upon satisfaction of the conditions in this
Section 2.3(d)(ii), the Trustee shall cancel such Restricted Definitive
Security and increase or cause to be increased in a corresponding amount
pursuant to Section 2.3(g) hereof, the aggregate principal amount of the
Unrestricted Global Security.

 

(iii)          Transfer or Exchange of Unrestricted
Definitive Securities to Beneficial Interests in Unrestricted Global Securities.
A holder of an Unrestricted Definitive Security may exchange such Unrestricted
Definitive Security for a beneficial interest in an Unrestricted Global
Security or transfer such Unrestricted Definitive Security to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Security at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Unrestricted Definitive
Security and increase or cause to be increased in a corresponding amount
pursuant to Section 2.3(g) hereof the aggregate principal amount of one of the
Unrestricted Global Securities.

 

(iv)          Transfer or Exchange of Unrestricted
Definitive Securities to Beneficial Interests in Restricted Global Securities
Prohibited. An Unrestricted Definitive Security may not be exchanged for,
or transferred to Persons who take delivery thereof in the form of, beneficial
interests in a Restricted Global Security.

 

(v)           Issuance of Unrestricted Global
Securities. If any such exchange or transfer of a Definitive Security for a
beneficial interest in an Unrestricted Global Security is effected pursuant to
clause (ii) or (iii) at a time when an Unrestricted Global Security has not yet
been issued, the Company shall issue and, upon receipt of an

 

10

 

authentication order in accordance with
Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted
Global Securities in an aggregate principal amount equal to the principal
amount of Definitive Securities so transferred.

 

(e)           Transfer
and Exchange of Definitive Securities for Definitive Securities.
Upon request by a holder of Definitive Securities and such holder’s compliance
with the provisions of this Section 2.3(e), the Registrar shall register the
transfer or exchange of Definitive Securities. Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to the
Registrar the Definitive Securities duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such holder. In addition, the requesting holder shall provide any additional
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 2.3 (e).

 

(i)            Transfer of Restricted Definitive
Securities to Restricted Definitive Securities. Any Restricted Definitive
Security may be transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Security if the
Registrar receives the following:

 

(1)           if the transfer will be made pursuant
to Rule 144A, a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;

 

(2)           if the transfer will be made pursuant
to Rule 903 or Rule 904, a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and

 

(3)           if the transfer will be made pursuant
to any other exemption from the registration requirements of the Securities
Act, a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable.

 

(ii)           Transfer or Exchange of Restricted
Definitive Securities to Unrestricted Definitive Securities. Any Restricted
Definitive Security may be exchanged by the holder thereof for an Unrestricted
Definitive Security or transferred to a Person or Persons who take delivery
thereof in the form of an Unrestricted Definitive Security only if:

 

(1)           the Registrar receives the following:

 

(A)          if the holder of such Restricted
Definitive Security proposes to exchange such Restricted Definitive Securities
for an Unrestricted Definitive Security, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item (1)(d) thereof;
or

 

(B)           if the holder of such Restricted
Definitive Securities proposes to transfer such Restricted Definitive Securities
to a Person who shall take delivery thereof in the form of an Unrestricted
Definitive

 

11

 

Security, a certificate from such holder in
the form of Exhibit B hereto, including the certifications in item (4) thereof;
and

 

(2)           in each such case, if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar to the effect that such exchange
or transfer complies with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

 

Upon satisfaction of the
conditions of any of the clauses of this Section 2.3(e)(ii), the Trustee shall
cancel the prior Restricted Definitive Security and the Company shall execute,
and upon receipt of an authentication order in accordance with Section 2.2
hereof, the Trustee shall authenticate and deliver an Unrestricted Definitive
Security in the appropriate aggregate principal amount to the Person designated
by the holder of such prior Restricted Definitive Security in instructions
delivered to the Registrar by such holder.

 

(iii)          Transfer of Unrestricted Definitive
Securities to Unrestricted Definitive Securities. A holder of Unrestricted
Definitive Securities may transfer such Unrestricted Definitive Securities to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Security. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Securities pursuant to the
instructions from the holder thereof.

 

(f)            Legends. The following legends
shall appear on the face of all Global Securities and Definitive Securities
issued under this Indenture unless specifically stated otherwise in the
applicable provisions of this Indenture.

 

(i)            Private Placement Legend.

 

(1)           Except as permitted by clause (2)
below, each Global Security and each Definitive Security (and all Securities
issued in exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:

 

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

 

(1)           REPRESENTS THAT (A) IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”),
(B) IT IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (C) IT IS AN INSTITUTIONAL 

 

12

 

“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN “IAI”) OR (D) IT IS A PERSON WHO HAS
OTHERWISE ACQUIRED THIS SECURITY IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH
(2) BELOW;

 

(2)           AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING
THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS
SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE), (E) TO AN IAI,
THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS
SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND IN EACH CASE,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES
LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER, IF THE
ISSUER SO REQUESTS, THAT SUCH TRANSFER COMPLIES WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER),
OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND

 

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

 

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

 

13

 

(2)           Notwithstanding the foregoing, any
Global Security or Definitive Security issued pursuant to clauses (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) to this Section 2.3
(and all Securities issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.

 

(ii)           Global Security Legend. Each
Global Security shall bear a legend in substantially the following form:

 

“THIS GLOBAL SECURITY IS HELD BY THE
DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE
IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE
MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE INDENTURE,
(II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.3(a) OF APPENDIX A TO THE INDENTURE, (III) THIS GLOBAL
SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.10 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

 

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 DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS SECURITY 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 SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS MAY BE 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.”

 

(g)           Cancellation
and/or Adjustment of Global Securities. At such time as all
beneficial interests in a particular Global Security have been exchanged for
Definitive Securities or a particular Global Security has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Security
shall be returned to or retained and cancelled by the Trustee in accordance
with Section 2.10 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Security or for Definitive Securities, 

 

14

 

the aggregate
principal amount of Securities represented by such Global Security shall be
reduced accordingly and an endorsement shall be made on such Global Security by
the Trustee or by the Depositary at the direction of the Trustee to reflect
such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Security, the aggregate principal amount
of such other Global Security shall be increased accordingly and an endorsement
shall be made on such Global Security by the Trustee or by the Depositary at
the direction of the Trustee to reflect such increase.

 

(h)           General Provisions with
Respect to Transfers and Exchanges of Securities.

 

(i)            To permit registrations of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate,
Definitive Securities and Global Securities at the Registrar’s request.

 

(ii)           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, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charge payable upon
exchanges to be registered in the name of the registered Holder effecting the
exchange pursuant to Sections 2.06, 3.06, 4.06, 4.08 and 9.05 of this
Indenture).

 

(iii)          Prior to the due presentation for
registration of transfer of any Security, the Company, the Trustee, the Paying
Agent or the Registrar may deem and treat the person in whose name a Security
is registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other
purposes whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee, the Paying Agent or the Registrar shall be affected by
notice to the contrary.

 

(iv)          All Securities 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 Securities surrendered upon such transfer or exchange.

 

(v)           All certifications, certificates and
Opinions of Counsel required to be submitted to the Registrar pursuant to this
Section 2.3 to effect a registration of transfer or exchange may be submitted
by facsimile.

 

(vi)          The Trustee is hereby authorized and directed
to enter into a letter of representations with the Depositary in the form
provided by the Company and to act in accordance with such letter.

 

(i)            No Obligation of the
Trustee.

 

(i)            The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, an
Agent Member or any other Person with respect to the accuracy of the records of
the Depositary or its nominee or of any participant or member 

 

15

 

thereof, with respect to any ownership
interest in the Securities or with respect to the delivery to any Participant,
Agent Member, beneficial owner or other Person (other than the Depositary) of
any notice (including any notice of redemption or repurchase) or the payment of
any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Securities shall be given or made only to the registered
Holders (which shall be the Depositary or its nominee in the case of a Global
Security). The rights of beneficial owners in any Global Security shall be
exercised only through the Depositary subject to the applicable rules and
procedures of the Depositary. The Trustee may rely and shall be fully protected
in relying upon information furnished by the Depositary with respect to its
members, participants and any beneficial owners.

 

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

 

2.4           Definitive
Securities

 

(a)           A Global Security
deposited with the Depositary or with the Trustee as Securities Custodian
pursuant to Section 2.1 shall be transferred to the beneficial owners thereof
in the form of Definitive Securities in an aggregate principal amount equal to
the principal amount of such Global Security, in exchange for such Global
Security, only if such transfer complies with Section 2.3 and (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security or if at any time the Depositary ceases to
be a “clearing agency” registered under the Exchange Act, and a successor
depositary is not appointed by the Company within 90 days of such notice or
after the Company becomes aware of such cessation, or (ii) an Event of Default
has occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.

 

(b)           Any Global Security
that is transferable to the beneficial owners thereof pursuant to this Section
2.4 shall be surrendered by the Depositary to the Trustee, to be so
transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations. Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in such denominations as permitted by Section 2.3(a) and
registered in such names as the Depositary shall direct.

 

(c)           Subject to the
provisions of Section 2.4(b), the registered Holder of a Global Security may
grant proxies and otherwise authorize any Person, including Participant and 

 

16

 

Indirect Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.

 

(d)           In the event of the
occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii),
the Company will promptly make available to the Trustee a reasonable supply of
Definitive Securities in fully registered form without interest coupons.

 

17

 

EXHIBIT
A

 

[FORM OF
FACE OF 18% SENIOR SUBORDINATED NOTES DUE 2012]

 

[Global
Securities Legend](1)

 

THIS GLOBAL
SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS
SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.3(a) OF APPENDIX A TO THE INDENTURE, (III)
THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.

 

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 DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS
THIS SECURITY 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 SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE 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.

 

[Private
Placement Legend](2)

 

THIS SECURITY
(OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), 

 

(1) Insert the
following legend if Security is to be issued in global form.

(2) Insert the
following legend if Security is subject to transfer restrictions.

 

A-1

 

AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

 

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

 

(2)           AGREES
THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
ISSUER OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER
THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE),
(E) TO AN IAI, THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND IN EACH CASE, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO
THE ISSUER, IF THE ISSUER SO REQUESTS, THAT SUCH TRANSFER COMPLIES WITH THE
SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUER), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION; AND

 

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

 

A-2

 

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

 

 

	
  No.

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  18% Senior Subordinated Note due 2012

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  CUSIP No.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ISIN No.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

 

PLIANT
CORPORATION, a Delaware corporation, promises to pay to Cede & Co., or
registered assigns, the principal sum [listed on the Schedule of Increases or
Decreases in Global Security attached hereto](3) [of $   ](4) on
July 15, 2012.

 

Interest
Payment Dates: January 15 and July 15.

 

Record Dates:
January 1 and July 1.

 

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

(3)  Insert if Security is to be
issued in global form.

(4) Insert if Security is to be issued in definitive form.

 

A-3

 

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

 

	
   

  	
   

  	
  PLIANT CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  	
   

  	
   

  
	
  AUTHENTICATION

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  as Trustee,
  certifies

  	
   

  	
   

  
	
  that this is
  one of

  	
   

  	
   

  
	
  the
  Securities referred

  	
   

  	
   

  
	
  to in the
  Indenture.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
						

 

 

[FORM OF
REVERSE SIDE OF 18% SENIOR SUBORDINATED NOTES DUE 2012]

 

18% Senior
Subordinated Note due 2012

 

1.                                       INTEREST

 

PLIANT
CORPORATION, a Delaware corporation (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the “Company”),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above.

 

Interest on
the Securities will accrue from the date of issuance at the rate of 18% per
annum until maturity, and will be payable semiannually on each January 15
and July 15 commencing July 15, 2007, to holders of record on the
immediately preceding January 1 or 

 

A-4

 

July 1. Interest
on the Securities shall accrue from the most recent date to which interest has
been paid or duly provided for or, if no interest has been paid or duly
provided for, from June 14, 2007 until
the principal hereof is due. On each interest payment date, the Company shall
pay the accrued interest in cash. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.

 

2.                                       METHOD
OF PAYMENT

 

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

 

3.                                       PAYING
AGENT AND REGISTRAR

 

Initially, The
Bank of New York Trust Company, N.A., a national banking association (the “Trustee”),
will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent or Registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

 

4.                                       INDENTURE

 

The Company
issued the Securities under an Indenture dated as of June 14, 2007 (the “Indenture”),
among the Company, the Note Guarantors and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and
provisions of the Indenture, and Holders (as defined in the Indenture) are
referred to the Indenture and the TIA for a statement of such terms and
provisions.

 

A-5

 

The Securities
are senior subordinated unsecured obligations of the Company limited to
$24,000,000 aggregate principal amount at any one time outstanding (subject to
Sections 2.07 and 2.08 of the Indenture). This Security is one of the
Securities referred to in the Indenture. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, make certain Investments and other Restricted Payments, pay
dividends and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates and make Asset Sales. The Indenture also imposes limitations on the
ability of the Company and each Note Guarantor to consolidate or merge with or
into any other Person or the Company to convey, transfer or lease all or
substantially all of its property.

 

To guarantee
the due and punctual payment of the principal and interest on the Securities
and all other amounts payable by the Company under the Indenture and the
Securities when and as the same shall be due and payable, whether at maturity,
by acceleration or otherwise, according to the terms of the Securities and the
Indenture, the Note Guarantors have jointly and severally unconditionally
guaranteed the Guaranteed Obligations on a senior subordinated basis pursuant
to the terms of the Indenture.

 

5.                                       OPTIONAL
REDEMPTION

 

The Securities
shall be redeemable at the option of the Company, in whole or in part, on not
less than 30 nor more than 60 days prior notice, (i) for a redemption date
occurring during the period from the Issue Date to but excluding June 14, 2008,
100% of the principal amount of the Securities to be redeemed plus the
Applicable Premium as of, and accrued and unpaid interest, if any, to, the date
of redemption and (ii) for a redemption date occurring during the period
commencing on or after June 14, 2008, at the following redemption prices
(expressed as percentages of principal amount), plus accrued and unpaid
interest to the redemption date (subject, in the case of each of clauses (i)
and (ii) hereof, to the right of Holders of record on the relevant record date
to receive interest due on the relevant interest payment date) if redeemed
during the 12-month period commencing on June 14, 2008 of the years set forth
below:

 

	
   

  	
   

  	
  Redemption

  	
   

  
	
  Year

  	
   

  	
  Price

  	
   

  
	
  2008

  	
   

  	
  106.00

  	
  %

  
	
  2009

  	
   

  	
  103.00

  	
  %

  
	
  2010

  	
   

  	
  101.00

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

6.                                       SINKING
FUND

 

The Securities
are not subject to any sinking fund.

 

7.                                       NOTICE
OF REDEMPTION

 

Notice of
redemption will be mailed by first-class mail at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his 

 

A-6

 

or her
registered address. Securities in denominations larger than $1,000 principal
amount may be redeemed in part but only in whole multiples of $1,000 principal
amount. If money sufficient to pay the redemption price of and accrued and
unpaid interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date
interest ceases to accrue on such Securities (or such portions thereof) called
for redemption.

 

8.                                       REPURCHASE
OF SECURITIES AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL

 

Upon a Change
of Control, any Holder of Securities will have the right, subject to certain
conditions specified in the Indenture, to cause the Company to repurchase all
or any part of the Securities of such Holder at a purchase price equal to (i)
for a repurchase date occurring during the period from the Issue Date to but
excluding June 14, 2008, 100% of the principal amount of the Securities to be
repurchased plus the Applicable Premium as of, and accrued and unpaid interest,
if any, to, the date of repurchase and (ii) for a repurchase date occurring
during the period commencing on or after June 14, 2008, the redemption price of
the Securities at such date as set forth in paragraph 5 of the Securities plus
accrued and unpaid interest to the date of repurchase (subject, in the case of
each of clauses (i) and (ii) hereof, to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) as provided in, and subject to the terms of, the Indenture.

 

In accordance
with Section 4.06 of the Indenture, the Company will be required to offer to
purchase Securities upon the occurrence of certain events.

 

9.                                       SUBORDINATION

 

The Securities
and Note Guarantees are subordinated to Senior Indebtedness, as defined in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Securities may be paid. The Company and each Note Guarantor
agrees, and each Holder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.

 

10.                                 DENOMINATIONS;
TRANSFER; EXCHANGE

 

The Securities
are in registered form without coupons in denominations of $1,000 principal
amount and whole multiples of $1,000 principal amount; PROVIDED that the
aggregate principal amount of the Securities issued on the date of original
issuance shall not exceed $24,000,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be
redeemed) or to transfer or exchange any Securities for a period of 15 days
prior to a selection of Securities to be redeemed or 15 days before an interest
payment date.

 

A-7

 

11.                                 PERSONS
DEEMED OWNERS

 

Except as
provided in paragraph 2 hereof, the registered Holder of this Security may be
treated as the owner of it for all purposes.

 

12.                                 UNCLAIMED
MONEY

 

If money for
the payment principal or interest remains unclaimed for two years, the Trustee
and the Paying Agent shall pay the money back to the Company at its written
request unless an abandoned property law designates another Person. After any
such payment, Holders entitled to the money must look to the Company for
payment and not to the Trustee for payment as general creditors and the Trustee
and the Paying Agent shall have no further liability with respect to such
monies.

 

13.                                 DISCHARGE
AND DEFEASANCE

 

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

 

14.                                 AMENDMENT;
WAIVER

 

Subject to
certain exceptions set forth in the Indenture, (i) the Indenture or the
Securities may be amended without prior notice to any Holder but with the
written consent of the Holders of at least a majority in aggregate principal
amount of the outstanding Securities and (ii) any default or compliance with
any provisions of the Indenture may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Holder, the Company, the Note Guarantors and the Trustee may
amend the Indenture or the Securities (i) to cure any ambiguity, omission,
defect or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii)
to provide for uncertificated Securities in addition to or in place of certificated
Securities; (iv) to add Note Guarantees with respect to the Securities; (v) to
secure the Securities; (vi) to add additional covenants or to surrender rights
and powers conferred on the Company; (vii) to comply with the requirements of
the SEC in order to effect or maintain the qualification of the Indenture under
the TIA; (viii) to make any change that does not materially and adversely
affect the rights of any Holder under the provisions of the Indenture; and (ix)
to make any change in the subordination provisions of the Indenture that would
limit or terminate the benefits available to any holder of Senior Indebtedness
of the Company (or any Representative thereof) under such subordination
provisions.

 

15.                                 DEFAULTS
AND REMEDIES

 

If an Event of
Default occurs (other than an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company) and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities may declare the principal of and accrued but unpaid interest on all
the Securities to be due and payable. If an Event of Default relating to
certain events of bankruptcy, insolvency or 

 

A-8

 

reorganization
of the Company occurs, the principal of and interest on all the Securities
shall become immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders. Under certain circumstances, the
Holders of a majority in principal amount of the outstanding Securities may
rescind any such acceleration with respect to the Securities and its
consequences.

 

If an Event of
Default occurs and is continuing, the Trustee shall be under no obligation to
exercise any of the rights or powers under the Indenture at the request or
direction of any of the Holders unless such Holders have offered to the Trustee
indemnity or security reasonably satisfactory to it against any loss, liability
or expense and certain other conditions are complied with. Except to enforce
the right to receive payment of principal, premium (if any) or interest when
due, no Holder may pursue any remedy with respect to the Indenture or the
Securities unless (i) such Holder has previously given the Trustee notice that
an Event of Default is continuing, (ii) Holders of at least 25% in principal
amount of the outstanding Securities have requested the Trustee in writing to
pursue the remedy, (iii) such Holders have offered the Trustee reasonable
security or indemnity against any loss, liability or expense, (iv) the Trustee
has not complied with such request within 60 days after the receipt of the
request and the offer of security or indemnity and (v) the Holders of a
majority in principal amount of the outstanding Securities have not given the
Trustee a direction inconsistent with such request within such 60-day period.
Subject to certain restrictions, the Holders of a majority in principal amount
of the outstanding Securities are given the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee. The Trustee,
however, may refuse to follow any direction that conflicts with law or the
Indenture or that the Trustee determines is unduly prejudicial to the rights of
any other Holder or that would involve the Trustee in personal liability. Prior
to taking any action under the Indenture, the Trustee shall be entitled to
indemnification reasonably satisfactory to it against all losses and expenses
caused by taking or not taking such action.

 

16.                                 TRUSTEE
DEALINGS WITH THE COMPANY

 

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

 

17.                                 NO
RECOURSE AGAINST OTHERS

 

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

 

 

A-9

 

18.                                 AUTHENTICATION

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

 

19.                                 ABBREVIATIONS

 

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

 

20.                                 GOVERNING
LAW

 

THIS SECURITY
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.

 

21.                                 CUSIP
AND ISIN NUMBERS

 

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

 

THE COMPANY
WILL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN REQUEST AND WITHOUT
CHARGE TO THE HOLDER A COPY OF THE INDENTURE.

 

ASSIGNMENT
FORM

 

To assign this Security, fill in the form
below: 

 

	
  I or we assign and transfer this Security to

  
	
   

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

  
	
   

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

  
	
   

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

  
	
   

  
	
  Date: 

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

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

  

 

A-10

 

	
  Signature Guarantee:

  
	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
  Signature must be guaranteed

  	
  Signature of Signature

  
	
  by a participant in a 

  	
  Guarantee

  
	
  recognized signature guaranty

  	
   

  
	
  medallion program or other

  	
   

  
	
  signature guarantor acceptable

  	
   

  
	
  to the Trustee

  	
   

  

 

 

OPTION OF
HOLDER TO ELECT PURCHASE

 

IF YOU WANT TO
ELECT TO HAVE THIS SECURITY PURCHASED BY THE COMPANY PURSUANT TO SECTION 4.06
(ASSET DISPOSITION) OR 4.08 (CHANGE OF CONTROL) OF THE INDENTURE, CHECK THE
BOX:

 

ASSET
DISPOSITION  ̈  CHANGE OF CONTROL  ̈

 

IF YOU WANT TO
ELECT TO HAVE ONLY PART OF THIS SECURITY PURCHASED BY THE COMPANY PURSUANT TO
SECTION 4.06 OR 4.08 OF THE INDENTURE, STATE THE AMOUNT ($1,000 OR AN INTEGRAL
MULTIPLE THEREOF):

 

	
  $

  	
   

  
	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  	
  YOUR SIGNATURE:

  	
   

  	
   

  
	
  (SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER SIDE OF THE SECURITY)

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNATURE GUARANTEE:

  	
   

  	
   

  
	
   

  	
  SIGNATURE MUST BE GUARANTEED BY A
  PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR OTHER
  SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE

  
								

 

A-11

 

[TO BE
ATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY

 

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

 

	
  Date of 

  increase or 

  decrease in 

  principal 

  amount of 

  this Global 

  Security

  	
   

  	
  Signature of authorized 

  signatory of securities 

  custodian of this Global 

  Security

  	
   

  	
  Amount of 

  increase in 

  principal 

  amount of this 

  Global 

  Security

  	
   

  	
  Amount of 

  decrease in 

  principal 

  amount of this 

  Global 

  Security

  	
   

  	
  Principal 

  Amount of 

  this Global 

  Security 

  following 

  such increase 

  or decrease

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-12

 

EXHIBIT
B

 

FORM OF
CERTIFICATE OF TRANSFER

 

Pliant Corporation

1475 Woodfield Road, Suite 700

Schaumburg, Illinois  60173

Attention:  General Counsel

Telecopier No.: (847) 969-3338

 

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

2 North LaSalle Street,
Suite 1020

Chicago, Illinois  60602

Attention: Corporate Trust Department

Telecopier No.: (312) 827-8542

 

Re:          18% SENIOR
SUBORDINATED NOTES DUE 2012

 

Reference is
hereby made to the Indenture, dated as of June 14, 2007 (the “Indenture”), among Pliant Corporation, as issuer (the “Company”), the Note Guarantors party thereto and The Bank of
New York Trust Company, N.A., as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

 

                   ,
(the “Transferor”) owns and proposes to
transfer the Security[s] or interest in such Security[s] specified in Annex A
hereto, in the principal amount of $              
in such Security[s] or interests (the “Transfer”),
to                             
(the “Transferee”), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby
certifies that:

 

[CHECK ALL THAT
APPLY]

 

1. o  Check if Transferee will
take delivery of a beneficial interest in the 144A Global Security or a
Definitive Security Pursuant to Rule 144A. The Transfer is being
effected pursuant to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the “Securities Act”),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Security is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Security for its own account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a “qualified institutional
buyer” within the meaning of Rule 144A in a transaction meeting the
requirements of Rule 144A and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Security will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Security and/or the Definitive Security and
in the Indenture and the Securities Act.

 

B-1

 

2. o  Check if Transferee will
take delivery of a beneficial interest in the Regulation S Global Security or a
Definitive Security pursuant to Regulation S. The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and, accordingly, the Transferor hereby further certifies
that (i) the Transfer is not being made to a Person in the United States and
(x) at the time the buy order was originated, the Transferee was outside the
United States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(a) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Distribution Compliance
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Security will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Security and/or the Definitive Security and in the Indenture and the Securities
Act.

 

3. o  Check and complete if
Transferee will take delivery of a beneficial interest in the IAI Global
Security or a Definitive Security pursuant to any provision of the Securities
Act other than Rule 144A or Regulation S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Securities and Restricted Definitive Securities
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):

 

(a)           o  such Transfer is being effected pursuant to
and in accordance with Rule 144 under the Securities Act;

 

or

 

(b)           o  such Transfer is being effected to the
Company or a subsidiary thereof;

 

or

 

(c)           o  such Transfer is being effected pursuant to
an effective registration statement under the Securities Act and in compliance
with the prospectus delivery requirements of the Securities Act;

 

or

 

(d)           o  such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144
or Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D under
the Securities Act and the Transfer complies with the transfer 

 

B-2

 

 

restrictions
applicable to beneficial interests in a Restricted Global Security or
Restricted Definitive Securities and the requirements of the exemption claimed,
which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer
is in respect of a principal amount of Securities at the time of transfer of
less than $250,000, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this certification),
to the effect that such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Security will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the IAI Global Security and/or the Definitive Securities and
in the Indenture and the Securities Act.

 

4. o  Check if Transferee will
take delivery of a beneficial interest in an Unrestricted Global Security or of
an Unrestricted Definitive Security.

 

(a)  o  Check if Transfer is
pursuant to Rule 144. (i) The Transfer is being effected pursuant to
and in accordance with Rule 144 under the Securities Act and in compliance with
the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any state of the United States and (ii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Security will no longer be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Securities, on
Restricted Definitive Securities and in the Indenture.

 

(b)  o  Check if Transfer is
Pursuant to Regulation S. (i) The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Security will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Securities, on Restricted Definitive Securities and in the Indenture.

 

(c)  o  Check if Transfer is
Pursuant to Other Exemption. (i) The Transfer is being effected
pursuant to and in compliance with an exemption from the registration
requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any State of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Security will not be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Securities or
Restricted Definitive Securities and in the Indenture.

 

B-3

 

This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Insert Name of Transferor]

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
					

 

B-4

 

ANNEX A TO
CERTIFICATE OF TRANSFER

 

1.             The Transferor owns and proposes to
transfer the following:

 

[CHECK ONE OF
(a) OR (b)]

 

(a)           o   a beneficial interest in the:

 

(i)         o   144A Global Security (CUSIP          ),
or

 

(ii)        o   Regulation S Global Security (CUSIP          ),
or

 

(iii)       o   IAI Global Security (CUSIP          );
or

 

(b)           o   a Restricted Definitive Security.

 

2.             After the Transfer the Transferee
will hold:

 

[CHECK ONE OF
(a), (b) OR (c)]

 

(a)           o   a beneficial interest in the:

 

(i)         o   144A Global Security (CUSIP          ),
or

 

(ii)        o   Regulation S Global Security (CUSIP          ),
or

 

(iii)       o   IAI Global Security (CUSIP          );
or

 

(iv)       o   Unrestricted Global Security (CUSIP          );
or

 

(b)           o   a Restricted Definitive Security; or

 

(c)           o   an Unrestricted Definitive Security,

 

in accordance with the
terms of the Indenture.

 

B-5

 

EXHIBIT C

 

FORM OF
CERTIFICATE OF EXCHANGE

 

Pliant Corporation

1475 Woodfield Road, Suite 600

Schaumburg, Illinois  60173

Attention:  General Counsel

Telecopier No.: (847) 969-3338

 

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

2 North LaSalle Street,
Suite 1020

Chicago, Illinois  60602

Attention: Corporate Trust Department

Telecopier No.: (312) 827-8542

 

Re:          18% SENIOR
SUBORDINATED NOTES DUE 2012

 

Reference is
hereby made to the Indenture, dated as of June 14, 2007 (the “Indenture”), among Pliant Corporation, as issuer (the “Company”), the Note Guarantors party thereto and The Bank of
New York Trust Company, N.A., as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

 

                          ,
(the “Owner”) owns and proposes to exchange
the Security[s] or interest in such Security[s] specified herein, in the
principal amount of $            
in such Security[s] or interests (the “Exchange”). In
connection with the Exchange, the Owner hereby certifies that:

 

1.             Exchange
of Restricted Definitive Securities or Beneficial Interests in a Restricted
Global Security for Unrestricted Definitive Securities or Beneficial Interests
in an Unrestricted Global Security

 

(a)  o  Check if Exchange is from
beneficial interest in a Restricted Global Security to beneficial interest in
an Unrestricted Global Security. In connection with the Exchange of
the Owner’s beneficial interest in a Restricted Global Security for a
beneficial interest in an Unrestricted Global Security in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Security and pursuant to and in accordance with the United
States Securities Act of 1933, as amended (the “Securities
Act”), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Security is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

 

(b)  o  Check if Exchange is from
beneficial interest in a Restricted Global Security to Unrestricted Definitive
Security. In connection with the Exchange of the Owner’s beneficial
interest in a Restricted Global Security for an Unrestricted Definitive
Security, the Owner hereby certifies (i) the Unrestricted Definitive Security
is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Security and pursuant to and in 

 

C-1

 

accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Security is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.

 

(c)  o  Check if Exchange is from
Restricted Definitive Security to beneficial interest in an Unrestricted Global
Security. In connection with the Owner’s Exchange of a Restricted
Definitive Security for a beneficial interest in an Unrestricted Global
Security, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any
state of the United States.

 

(d)  o  Check if Exchange is from
Restricted Definitive Security to Unrestricted Definitive Security. In
connection with the Owner’s Exchange of a Restricted Definitive Security for an
Unrestricted Definitive Security, the Owner hereby certifies (i) the
Unrestricted Definitive Security is being acquired for the Owner’s own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Securities and
pursuant to and in accordance with the Securities Act, (iii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Security is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

 

2.             Exchange
of Restricted Definitive Securities or Beneficial Interests in Restricted
Global Securities for Restricted Definitive Securities or Beneficial Interests
in Restricted Global Securities

 

(a)  o  Check if Exchange is from
beneficial interest in a Restricted Global Security to Restricted Definitive
Security. In connection with the Exchange of the Owner’s beneficial
interest in a Restricted Global Security for a Restricted Definitive Security
with an equal principal amount, the Owner hereby certifies that the Restricted
Definitive Security is being acquired for the Owner’s own account without
transfer. Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the Restricted Definitive Security issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Security and in the
Indenture and the Securities Act.

 

(b)  o  Check if Exchange is from
Restricted Definitive Security to beneficial interest in a Restricted Global
Security. In connection with the Exchange of the Owner’s Restricted
Definitive Security for a beneficial interest in the [CIRCLE ONE] 144A Global
Security, Regulation S Global Security, IAI Global Security with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner’s own account without transfer and
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Definitive Security and pursuant to
and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions
on 

 

C-2

 

transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Security and in the Indenture and the Securities Act.

 

This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Insert Name of Transferor]

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
					

 

C-3

 

EXHIBIT D

 

FORM OF
CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

Pliant Corporation

1475 Woodfield Road, Suite 700

Schaumburg, Illinois  60173

Attention:  General Counsel

Telecopier No.: (847) 969-3338

 

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

2 North LaSalle Street,
Suite 1020

Chicago, Illinois  60602

Attention: Corporate Trust Department

Telecopier No.: (312) 827-8542

 

Re:          18% SENIOR
SUBORDINATED NOTES DUE 2012

 

Reference is
hereby made to the Indenture, dated as of June 14, 2007 (the “Indenture”), among Pliant Corporation, as issuer (the “Company”), the Note Guarantors party thereto and The Bank of
New York Trust Company, N.A., as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

 

In connection
with our proposed purchase of $            
aggregate principal amount of:

 

(a)  o  a beneficial interest in a Global Security,
or

 

(b)  o  a Definitive Security,

 

we
confirm that:

 

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

 

2.             We understand that the offer and
sale of the Securities have not been registered under the Securities Act, and
that the Securities and any interest therein may not be offered or sold 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 the Securities or any interest therein, we will do so only
(A) to the Company or any subsidiary thereof, (B) in accordance with
Rule 144A under the Securities Act to a “qualified institutional buyer” (as
defined therein), (C) 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 you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is 

 

D-1

 

in respect of
a principal amount of Securities, at the time of transfer of less than
$250,000, an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such transfer is in compliance with the Securities Act, (D) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the provisions of Rule 144(k) under the
Securities Act or (F) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any Person
purchasing the Definitive Security or beneficial interest in a Global Security
from us in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.

 

3.             We understand that, on any proposed
resale of the Securities or beneficial interest therein, we will be required to
furnish to you and the Company such certifications, legal opinions and other
information as you and the Company may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions. We further understand
that the Securities purchased by us will bear a legend to the foregoing effect.

 

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 Securities, and we and any accounts for which we are acting
are each able to bear the economic risk of our or its investment. We have had
access to such financial and other information and 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 Securities.

 

5.             We are acquiring the Securities or
beneficial interest therein purchased by us for our own 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 and are not acquiring the
Securities with a view to any distribution thereof in a transaction that would
violate the Securities Act of the securities laws of any state of the United
States or any other applicable jurisdiction.

 

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

 

D-2

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Insert Name of Accredited Investor]

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
							

 

D-3

 

EXHIBIT E

 

FORM OF
SUPPLEMENTAL INDENTURE

 

SUPPLEMENTAL INDENTURE (this “Supplemental
Indenture”) dated as of [   ], among [NEW GUARANTOR] (the “New
Guarantor”), a subsidiary of PLIANT CORPORATION (or its successor), a Delaware
corporation (the “Company”), [OTHER EXISTING GUARANTORS] and THE BANK OF NEW
YORK TRUST COMPANY, N.A., a national banking association, as trustee under the
indenture referred to below (the “Trustee”).

 

W I T N E S S E T H :

 

WHEREAS the
Company and [OTHER EXISTING GUARANTORS] (the “Existing Guarantors”) have
heretofore executed and delivered to the Trustee an Indenture (the “Indenture”)
dated as of June 14, 2007, providing for the issuance of an aggregate principal
amount of up to $24,000,000 of 18% Senior Subordinated Notes due 2012 (the “Securities”);

 

WHEREAS
Section 4.11 of the Indenture provides that under certain circumstances the
Company is required to cause the New Guarantor to execute and deliver to the
Trustee a supplemental indenture pursuant to which the New Guarantor shall
unconditionally guarantee all the Company’s obligations under the Securities
pursuant to a Note Guarantee on the terms and conditions set forth herein; and

 

WHEREAS
pursuant to Section 9.01 of the Indenture, the Trustee, the Company and the
Existing Guarantors are authorized to execute and deliver this Supplemental
Indenture;

 

NOW THEREFORE,
in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the New Guarantor,
the Company, the Existing Guarantors and the Trustee mutually covenant and
agree for the equal and ratable benefit of the holders of the Securities as
follows:

 

1.             Agreement to Guarantee. The New Guarantor hereby
agrees, jointly and severally with all the Existing Guarantors, to
unconditionally guarantee the Company’s obligations under the Securities on the
terms and subject to the conditions set forth in Articles 11 and 12 of the
Indenture and to be bound by all other applicable provisions of the Indenture
and the Securities.

 

2.             Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in
all respects ratified and confirmed and all the terms, conditions and
provisions thereof shall remain in full force and effect. This Supplemental
Indenture shall form a part of the Indenture for all purposes, and every holder
of Securities heretofore or hereafter authenticated and delivered shall be
bound hereby.

 

3.             Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

E-1

 

4.             Trustee Makes No Representation. The recitals
contained herein shall be taken as the statements of the Company, [NEW
GUARANTOR] and the Existing Guarantors, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of this Supplemental Indenture.

 

5.             Counterparts. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.

 

6.             Effect of Headings. The Section headings herein
are for convenience only and shall not effect the construction thereof.

 

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

 

	
   

  	
  [NEW GUARANTOR],

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PLIANT CORPORATION,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [OTHER EXISTING GUARANTORS],

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST 

  COMPANY, N.A., as Trustee,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-2

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