Document:

Exhibit 4.1

    EXHIBIT
      4.1

     

    EXECUTION
      COPY

     

     

      
        

      

    

     

      
        

      

    

     

     

    SUN
      HEALTHCARE GROUP, INC.

    Issuer

     

    

     

    91⁄8%
      Senior Subordinated Notes due 2015

     

    ____________________________

     

    INDENTURE

     

    Dated
      as
      of April 12, 2007

     

    ____________________________

     

    WELLS
      FARGO BANK, 

    NATIONAL
      ASSOCIATION

    Trustee

     

    

    
      
 

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CROSS-REFERENCE
      TABLE

     

    
      	
              TIA

              Section

            	 	
              Indenture

              Section

            
	
              310(a)(1)

            	 	
              7.11

            
	
              (a)(2)

            	 	
              7.11

            
	
              (a)(3)

            	 	
              N.A.

            
	
              (a)(4)

            	 	
              N.A.

            
	
              (b)

            	 	
              7.09;
                7.11

            
	
              (c)

            	 	
              N.A.

            
	
              311(a)

            	 	
              7.12

            
	
              (b)

            	 	
              7.12

            
	
              (c)

            	 	
              N.A.

            
	
              312(a)

            	 	
              2.05

            
	
              (b)

            	 	
              13.03

            
	
              (c)

            	 	
              13.03

            
	
              313(a)

            	 	
              7.07

            
	
              (b)(1)

            	 	
              N.A.

            
	
              (b)(2)

            	 	
              7.07

            
	
              (c)

            	 	
              13.02

            
	
              (d)

            	 	
              7.07

            
	
              314(a)

            	 	
              4.02;

            
	 	 	4.10;
              13.02
	
              (b)

            	 	
              N.A.

            
	
              (c)(1)

            	 	
              13.04

            
	
              (c)(2)

            	 	
              13.04

            
	
              (c)(3)

            	 	
              N.A.

            
	
              (d)

            	 	
              N.A.

            
	
              (e)

            	 	
              13.05

            
	
              (f)

            	 	
              4.10

            
	
              315(a)

            	 	
              7.01

            
	
              (b)

            	 	
              7.06;
                13.02

            
	
              (c)

            	 	
              7.01

            
	
              (d)

            	 	
              7.01

            
	
              (e)

            	 	
              6.11

            
	
              316(a)(last
                sentence)

            	 	
              13.0

            
	
              (a)(1)(A)

            	 	
              6.05

            
	
              (a)(1)(B)

            	 	
              6.04

            
	
              (a)(2)

            	 	
              N.A.

            
	
              (b)

            	 	
              6.07

            
	
              317(a)(1)

            	 	
              6.08

            
	
              (a)(2)

            	 	
              6.09

            
	
              (b)

            	 	
              2.04

            
	
              318(a)

            	 	
              13.01

            

    

    N.A.
      means Not Applicable.

     

                                                      

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

    
      
        
          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    i

     

    TABLE
      OF
      CONTENTS

     

    Page

    
      
        
          	
                  ARTICLE
                    ONE

                   

                
	
                  SECTION
                    1.01.

                	
                  Definitions.

                	
                  1

                
	
                  SECTION
                    1.02.

                	
                  Incorporation
                    by Reference of Trust Indenture Act

                	
                  24

                
	
                  SECTION
                    1.03.

                	
                  Rules
                    of Construction

                	
                  24

                
	
                   

                  ARTICLE
                    TWO

                   

                
	
                  THE
                    NOTES

                   

                
	
                  SECTION
                    2.01.

                	
                  Form
                    and Dating

                	
                  25

                
	
                  SECTION
                    2.02.

                	
                  Execution
                    and Authentication

                	
                  25

                
	
                  SECTION
                    2.03.

                	
                  Registrar
                    and Paying Agent

                	
                  26

                
	
                  SECTION
                    2.04.

                	
                  Paying
                    Agent To Hold Money in Trust

                	
                  26

                
	
                  SECTION
                    2.05.

                	
                  Noteholder
                    Lists

                	
                  26

                
	
                  SECTION
                    2.06.

                	
                  Transfer
                    and Exchange

                	
                  27

                
	
                  SECTION
                    2.07.

                	
                  Replacement
                    Notes

                	
                  27

                
	
                  SECTION
                    2.08.

                	
                  Outstanding
                    Notes

                	
                  27

                
	
                  SECTION
                    2.09.

                	
                  Treasury
                    Notes

                	
                  28

                
	
                  SECTION
                    2.10.

                	
                  Temporary
                    Notes

                	
                  28

                
	
                  SECTION
                    2.11.

                	
                  Cancellation

                	
                  28

                
	
                  SECTION
                    2.12.

                	
                  Defaulted
                    Interest

                	
                  28

                
	
                  SECTION
                    2.13.

                	
                  CUSIP
                    Numbers, ISINs, etc

                	
                  28

                
	
                  SECTION
                    2.14.

                	
                  Issuance
                    of Additional Notes

                	
                  29

                
	
                   

                  ARTICLE
                    THREE

                   

                
	
                  REDEMPTION

                   

                
	
                  SECTION
                    3.01.

                	
                  Notices
                    to Trustee

                	
                  29

                
	
                  SECTION
                    3.02.

                	
                  Selection
                    of Notes to Be Redeemed

                	
                  29

                
	
                  SECTION
                    3.03.

                	
                  Notice
                    of Redemption

                	
                  30

                
	
                  SECTION
                    3.04.

                	
                  Effect
                    of Notice of Redemption

                	
                  30

                
	
                  SECTION
                    3.05.

                	
                  Deposit
                    of Redemption Price

                	
                  31

                
	
                  SECTION
                    3.06.

                	
                  Notes
                    Redeemed in Part

                	
                  31

                
	
                  SECTION
                    3.07.

                	
                  Escrow
                    of Proceeds; Special Mandatory Redemption.

                	
                  31

                
	
                   

                  ARTICLE
                    FOUR

                   

                
	
                  COVENANTS

                   

                
	
                  SECTION
                    4.01.

                	
                  Payment
                    of Notes

                	
                  31

                
	
                  SECTION
                    4.02.

                	
                  SEC
                    Reports

                	
                  32

                

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        ii

         

        
          	
                  SECTION
                    4.03.

                	
                  Limitation
                    on Indebtedness and Issuance of Preferred Stock

                	
                  32

                
	
                  SECTION
                    4.04.

                	
                  Limitation
                    on Restricted Payments

                	
                  36

                
	
                  SECTION
                    4.05.

                	
                  Dividend
                    and Other Payment Restrictions Affecting Restricted

                       Subsidiaries

                	
                  40

                
	
                  SECTION
                    4.06.

                	
                  Limitation
                    on Sales of Assets and Subsidiary Stock

                	
                  41

                
	
                  SECTION
                    4.07.

                	
                  Limitation
                    on Affiliate Transactions

                	
                  45

                
	
                  SECTION
                    4.08.

                	
                  Limitation
                    on Line of Business

                	
                  46

                
	
                  SECTION
                    4.09.

                	
                  Designation
                    of Restricted and Unrestricted Subsidiaries

                	
                  46

                
	
                  SECTION
                    4.10.

                	
                  Change
                    of Control

                	
                  47

                
	
                  SECTION
                    4.11.

                	
                  Limitation
                    on Liens

                	
                  48

                
	
                  SECTION
                    4.12.

                	
                  Limitation
                    on Other Senior Subordinated Indebtedness

                	
                  48

                
	
                  SECTION
                    4.13.

                	
                  Future
                    Guaranties

                	
                  49

                
	
                  SECTION
                    4.14.

                	
                  Compliance
                    Certificate

                	
                  49

                
	
                   

                  ARTICLE
                    FIVE

                   

                
	
                  SUCCESSOR
                    COMPANY

                   

                
	
                  SECTION
                    5.01.

                	
                  When
                    Company May Merge or Transfer Assets

                	
                  49

                
	
                   

                  ARTICLE
                    SIX

                   

                
	
                  DEFAULTS
                    AND REMEDIES

                   

                
	
                  SECTION
                    6.01.

                	
                  Events
                    of Default

                	
                  51

                
	
                  SECTION
                    6.02.

                	
                  Acceleration

                	
                  53

                
	
                  SECTION
                    6.03.

                	
                  Other
                    Remedies

                	
                  54

                
	
                  SECTION
                    6.04.

                	
                  Waiver
                    of Past Defaults

                	
                  54

                
	
                  SECTION
                    6.05.

                	
                  Control
                    by Majority

                	
                  54

                
	
                  SECTION
                    6.06.

                	
                  Limitation
                    on Suits

                	
                  54

                
	
                  SECTION
                    6.07.

                	
                  Rights
                    of Holders to Receive Payment

                	
                  55

                
	
                  SECTION
                    6.08.

                	
                  Collection
                    Suit by Trustee

                	
                  55

                
	
                  SECTION
                    6.09.

                	
                  Trustee
                    May File Proofs of Claim

                	
                  55

                
	
                  SECTION
                    6.10.

                	
                  Priorities

                	
                  55

                
	
                  SECTION
                    6.11.

                	
                  Undertaking
                    for Costs

                	
                  56

                
	
                  SECTION
                    6.12.

                	
                  Waiver
                    of Stay or Extension Laws

                	
                  56

                
	
                   

                  ARTICLE
                    SEVEN

                   

                
	
                  TRUSTEE

                   

                
	
                  SECTION
                    7.01.

                	
                  Duties
                    of Trustee

                	
                  56

                
	
                  SECTION
                    7.02.

                	
                  Notice
                    of Defaults

                	
                  57

                
	
                  SECTION
                    7.03.

                	
                  Rights
                    of Trustee

                	
                  58

                
	
                  SECTION
                    7.04.

                	
                  Individual
                    Rights of Trustee

                	
                  58

                
	
                  SECTION
                    7.05.

                	
                  Trustee’s
                    Disclaimer

                	
                  58

                
	
                  SECTION
                    7.06.

                	
                  Reserved.

                	
                  58

                

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        iii

         

        
          	
                  SECTION
                    7.07.

                	
                  Reports
                    by Trustee to Holders

                	
                  58

                
	
                  SECTION
                    7.08.

                	
                  Compensation
                    and Indemnity

                	
                  59

                
	
                  SECTION
                    7.09.

                	
                  Replacement
                    of Trustee

                	
                  59

                
	
                  SECTION
                    7.10.

                	
                  Successor
                    Trustee by Merger

                	
                  60

                
	
                  SECTION
                    7.11.

                	
                  Eligibility;
                    Disqualification

                	
                  60

                
	
                  SECTION
                    7.12.

                	
                  Preferential
                    Collection of Claims Against Company

                	
                  61

                
	
                   

                  ARTICLE
                    EIGHT

                   

                
	
                  DISCHARGE
                    OF INDENTURE; DEFEASANCE

                   

                
	
                  SECTION
                    8.01.

                	
                  Discharge
                    of Liability on Notes; Defeasance

                	
                  61

                
	
                  SECTION
                    8.02.

                	
                  Conditions
                    to Defeasance

                	
                  62

                
	
                  SECTION
                    8.03.

                	
                  Application
                    of Trust Money

                	
                  63

                
	
                  SECTION
                    8.04.

                	
                  Repayment
                    to Company

                	
                  63

                
	
                  SECTION
                    8.05.

                	
                  Indemnity
                    for Government Obligations

                	
                  63

                
	
                  SECTION
                    8.06.

                	
                  Reinstatement

                	
                  63

                
	
                   

                  ARTICLE
                    NINE

                   

                
	
                  AMENDMENTS

                   

                
	
                  SECTION
                    9.01.

                	
                  Without
                    Consent of Holders

                	
                  64

                
	
                  SECTION
                    9.02.

                	
                  With
                    Consent of Holders

                	
                  65

                
	
                  SECTION
                    9.03.

                	
                  Compliance
                    with Trust Indenture Act

                	
                  66

                
	
                  SECTION
                    9.04.

                	
                  Revocation
                    and Effect of Consents and Waivers

                	
                  66

                
	
                  SECTION
                    9.05.

                	
                  Notation
                    on or Exchange of Notes

                	
                  66

                
	
                  SECTION
                    9.06.

                	
                  Trustee
                    To Sign Amendments

                	
                  67

                
	
                  SECTION
                    9.07.

                	
                  Payment
                    for Consent

                	
                  67

                
	
                   

                  ARTICLE
                    TEN

                   

                
	
                  SUBORDINATION

                   

                
	
                  SECTION
                    10.01.

                	
                  Agreement
                    To Subordinate

                	
                  67

                
	
                  SECTION
                    10.02.

                	
                  Liquidation,
                    Dissolution, Bankruptcy

                	
                  67

                
	
                  SECTION
                    10.03.

                	
                  Default
                    on Senior Indebtedness of the Company

                	
                  68

                
	
                  SECTION
                    10.04.

                	
                  Acceleration
                    of Payment of Notes

                	
                  69

                
	
                  SECTION
                    10.05.

                	
                  When
                    Distribution Must Be Paid Over

                	
                  69

                
	
                  SECTION
                    10.06.

                	
                  Subrogation

                	
                  69

                
	
                  SECTION
                    10.07.

                	
                  Relative
                    Rights

                	
                  69

                
	
                  SECTION
                    10.08.

                	
                  Subordination
                    May Not Be Impaired by Company

                	
                  69

                
	
                  SECTION
                    10.09.

                	
                  Rights
                    of Trustee and Paying Agent

                	
                  69

                
	
                  SECTION
                    10.10.

                	
                  Distribution
                    or Notice to Representative

                	
                  70

                
	
                  SECTION
                    10.11.

                	
                  Article
                    Ten Not To Prevent Events of Default or Limit Right To

                       Accelerate

                	
                  70

                
	
                  SECTION
                    10.12.

                	
                  Trust
                    Moneys Not Subordinated

                	
                  70

                

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        iv

         

        
          	
                  SECTION
                    10.13.

                	
                  Trustee
                    Entitled To Rely

                	
                  70

                
	
                  SECTION
                    10.14.

                	
                  Trustee
                    To Effectuate Subordination

                	
                  71

                
	
                  SECTION
                    10.15.

                	
                  Trustee
                    Not Fiduciary for Holders of Senior Indebtedness of the

                       Company

                	
                  71

                
	
                  SECTION
                    10.16.

                	
                  Reliance
                    by Holders of Senior Indebtedness of the Company on

                       Subordination
                    Provisions

                	
                  71

                
	
                   

                  ARTICLE
                    ELEVEN

                   

                
	
                  SUBSIDIARY
                    GUARANTIES

                   

                
	
                  SECTION
                    11.01.

                	
                  Guaranties

                	
                  71

                
	
                  SECTION
                    11.02.

                	
                  Limitation
                    on Liability

                	
                  73

                
	
                  SECTION
                    11.03.

                	
                  Successors
                    and Assigns

                	
                  74

                
	
                  SECTION
                    11.04.

                	
                  No
                    Waiver

                	
                  74

                
	
                  SECTION
                    11.05.

                	
                  Modification

                	
                  74

                
	
                  SECTION
                    11.06.

                	
                  Release
                    of Subsidiary Guarantor

                	
                  74

                
	
                  SECTION
                    11.07.

                	
                  Contribution

                	
                  75

                
	
                   

                  ARTICLE
                    TWELVE

                   

                
	
                  SUBORDINATION
                    OF SUBSIDIARY GUARANTIES

                   

                
	
                  SECTION
                    12.01.

                	
                  Agreement
                    To Subordinate

                	
                  75

                
	
                  SECTION
                    12.02.

                	
                  Liquidation,
                    Dissolution, Bankruptcy

                	
                  76

                
	
                  SECTION
                    12.03.

                	
                  Default
                    on Senior Indebtedness of Subsidiary Guarantor

                	
                  76

                
	
                  SECTION
                    12.04.

                	
                  Demand
                    for Payment

                	
                  77

                
	
                  SECTION
                    12.05.

                	
                  When
                    Distribution Must Be Paid Over

                	
                  77

                
	
                  SECTION
                    12.06.

                	
                  Subrogation

                	
                  77

                
	
                  SECTION
                    12.07.

                	
                  Relative
                    Rights

                	
                  77

                
	
                  SECTION
                    12.08.

                	
                  Subordination
                    May Not Be Impaired by Company

                	
                  78

                
	
                  SECTION
                    12.09.

                	
                  Rights
                    of Trustee and Paying Agent

                	
                  78

                
	
                  SECTION
                    12.10.

                	
                  Distribution
                    or Notice to Representative

                	
                  78

                
	
                  SECTION
                    12.11.

                	
                  Article
                    Twelve Not To Prevent Events of Default or Limit Right

                       To
                    Demand Payment

                	
                  79

                
	
                  SECTION
                    12.12.

                	
                  Trustee
                    Entitled To Rely

                	
                  79

                
	
                  SECTION
                    12.13.

                	
                  Trustee
                    To Effectuate Subordination

                	
                  79

                
	
                  SECTION
                    12.14.

                	
                  Trustee
                    Not Fiduciary for Holders of Senior Indebtedness of

                       Subsidiary
                    Guarantor

                	
                  79

                
	
                  SECTION
                    12.15.

                	
                  Reliance
                    by Holders of Senior Indebtedness of Subsidiary

                       Guarantors
                    on Subordination Provisions

                	
                  80

                
	
                   

                  ARTICLE
                    THIRTEEN

                   

                
	
                  MISCELLANEOUS

                   

                
	
                  SECTION
                    13.01.

                	
                  Trust
                    Indenture Act Controls

                	
                  80

                

        

      

    

    
      
        
        

      

      
        
        

        
          

        
v

      
        	
                SECTION
                  13.02.

              	
                Notices

              	
                80

              
	
                SECTION
                  13.03.

              	
                Communication
                  by Holders with Other Holders

              	
                81

              
	
                SECTION
                  13.04.

              	
                Certificate
                  and Opinion as to Conditions Precedent

              	
                81

              
	
                SECTION
                  13.05.

              	
                Statements
                  Required in Certificate or Opinion

              	
                81

              
	
                SECTION
                  13.06.

              	
                When
                  Notes Disregarded

              	
                81

              
	
                SECTION
                  13.07.

              	
                Rules
                  by Trustee, Paying Agent and Registrar

              	
                82

              
	
                SECTION
                  13.08.

              	
                Legal
                  Holidays

              	
                82

              
	
                SECTION
                  13.09.

              	
                Governing
                  Law

              	
                82

              
	
                SECTION
                  13.10.

              	
                No
                  Recourse Against Others

              	
                82

              
	
                SECTION
                  13.11.

              	
                Successors

              	
                82

              
	
                SECTION
                  13.12.

              	
                Multiple
                  Originals

              	
                82

              
	
                SECTION
                  13.13.

              	
                Table
                  of Contents; Headings

              	
                82

              

         

         

        Rule
          144A/Regulation S/IAI Appendix

         

        Exhibit
          1
          -             Form
          of Initial Note

         

        Exhibit
          2
          -             Form
          of Exchange Note or Private Exchange Note

         

        Exhibit
          3
          -             Form
          of Transferee Letter of Representation

      

       

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    INDENTURE
      dated as of April 12, 2007 (this “Indenture”), among SUN HEALTHCARE GROUP, INC.,
      a Delaware corporation, the Subsidiary Guarantors (as defined below) and WELLS
      FARGO BANK, NATIONAL 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 Initial Notes, Exchange
      Notes and Private Exchange Notes (collectively, the “Notes”).

     

    ARTICLE
      ONE

     

     

    SECTION
      1.01. Definitions.

     

    “Acquired
      Debt” means, with respect to any specified Person: 

     

    (1) 
      Indebtedness of any other Person existing at the time such other Person is
      merged with or into or became a Subsidiary of such specified Person, whether
      or
      not such Indebtedness is incurred in connection with, or in contemplation of,
      such other Person merging with or into, or becoming a Subsidiary of such
      specified Person; and 

     

    (2) 
      Indebtedness secured by a Lien encumbering any asset acquired by such specified
      Person. 

     

    “Adjusted
      Treasury Rate” means, with respect to any redemption date, (1) the yield,
      under the heading which represents the average for the immediately preceding
      week, appearing in the most recently published statistical release designated
      “H.15(519)” or any successor publication which is published weekly by the Board
      of Governors of the Federal Reserve System and which establishes yields on
      actively traded United States Treasury securities adjusted to constant maturity
      under the caption “Treasury Constant Maturities”, for the maturity corresponding
      to the Comparable Treasury Issue (if no maturity is within three months before
      or after April 15, 2011, yields for the two published maturities most closely
      corresponding to the Comparable Treasury Issue shall be determined and the
      Adjusted Treasury Rate shall be interpolated or extrapolated from such yields
      on
      a straight line basis, rounding to the nearest month) or (2) if such
      release (or any successor release) is not published during the week preceding
      the calculation date or does not contain such yields, the rate per year equal
      to
      the semi-annual equivalent yield to maturity of the Comparable Treasury Issue
      (expressed as a percentage of its principal amount) equal to the Comparable
      Treasury Price for such redemption date, in each case calculated on the third
      Business Day immediately preceding the redemption date, in each case, plus
      0.50%.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “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 purposes of this definition, “control,” as used with
      respect to any Person, shall mean the possession, directly or indirectly, of
      the
      power to direct or cause the direction of the management or policies of such
      Person, whether through the ownership of voting securities, by agreement or
      otherwise. For purposes of this definition, the terms “controlling,” “controlled
      by” and “under common control with” shall have correlative
      meanings.

     

    “Applicable
      Premium” means with respect to a Note at any redemption date, the greater of
      (1) 1.00% of the principal amount of such Note and (2) the excess of
      (A) the present value at such redemption date of (i) the redemption
      price of such Note on April 15, 2011 (such redemption price being described
      in
      the fourth paragraph of Section 5 of the Notes exclusive of any accrued
      interest) plus (ii) all required remaining scheduled interest payments due
      on such Note through April 15, 2011 (but excluding accrued and unpaid interest
      to the redemption date), computed using a discount rate equal to the Adjusted
      Treasury Rate, over (B) the principal amount of such Note on such
      redemption date.

     

    “Asset
      Sale” means: 

     

    (1) 
      the
      sale, lease, conveyance or other disposition (a “Disposition”)
      of any
      assets or rights (including by way of a sale and leaseback) outside of the
      ordinary course of business; and 

     

    (2) 
      the
      issue or sale by the Company or any Restricted Subsidiary of Equity Interests
      of
      any of the Company’s Restricted Subsidiaries;

     

    in
      the
      case of either clause (1) or (2), whether in a single transaction or a
      series of related transactions:

     

    (A) that
      have
      a fair market value in excess of $3.0 million; or 

     

    (B) for
      net
      proceeds in excess of $3.0 million.

     

    Notwithstanding
      the preceding, the following items shall not be deemed to be Asset
      Sales:

     

    (1) 
      a
      Disposition of assets by the Company to the Company or a Restricted Subsidiary
      or by a Restricted Subsidiary to the Company or to any other Restricted
      Subsidiary; 

     

    (2) 
      an
      issuance of Equity Interests by a Restricted Subsidiary to the Company or to
      another Restricted Subsidiary; 

     

    (3) 
      the
      issuance of Equity Interests by a Restricted Subsidiary in which the percentage
      interest (direct and indirect) in the Equity Interests of such
      Person

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    owned
      by
      the Company after giving effect to such issuance, is at least equal to the
      percentage interest prior to such issuance; 

     

    (4) 
      a
      Restricted Payment that is permitted by Section 4.04; 

     

    (5) 
      a
      Disposition in the ordinary course of business; 

     

    (6) 
      any
      Liens permitted by this Indenture and foreclosures thereon; 

     

    (7) 
      any
      exchange of property pursuant to Section 1031 of the Code for use in a
      Permitted Business;

     

    (8) 
      the
      license or sublicense of intellectual property or other general intangibles;
      

     

    (9) 
      the
      lease or sublease of property in the ordinary course of business so long as
      the
      same does not materially interfere with the business of the Company and its
      Restricted Subsidiaries taken as a whole; and 

     

    (10) the
      sale
      or other disposition of cash or Cash Equivalents. 

     

    “Attributable
      Debt” in respect of a Sale and Leaseback Transaction means, at the time of
      determination, the present value of the total obligations of the lessee for
      net
      rental payments during the remaining term of the lease included in such Sale
      and
      Leaseback Transaction. For purposes hereof such present value shall be
      calculated using a discount rate equal to the rate of interest implicit in
      such
      Sale and Leaseback Transaction, determined by lessee in good faith on a basis
      consistent with comparable determinations of Capital Lease Obligations under
      GAAP; provided,
      however,
      that if
      such sale and leaseback transaction results in a Capital Lease Obligation,
      the
      amount of Indebtedness represented thereby will be determined in accordance
      with
      the definition of “Capital Lease Obligation.”

     

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

     

    “Board
      of
      Directors” means (1) with respect to a Person that is a corporation or
      limited liability company, the board of directors, board of managers or
      equivalent governing board of such Person or any duly authorized committee
      thereof, (2) with respect to a Person that is a limited partnership, the
      board of directors, board of managers or equivalent governing board of such
      Person’s general partner, and (3) with respect to any other Person, the
      governing body of such Person most closely approximating the governing bodies
      contemplated in the preceding clauses (1) and (2). 

     

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

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

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

     

    “Capital
      Lease Obligation” means an obligation that is required to be classified and
      accounted for as a capital 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. 

     

    “Capital
      Stock” means: 

     

    (a)
       in
      the
      case of a corporation, corporate stock; 

     

    (b)   in
      the
      case of an association or business entity, any and all shares, interests,
      participations, rights or other equivalents (however designated) of corporate
      stock; 

     

    (c)   in
      the
      case of a partnership or limited liability company, partnership or membership
      interests (whether general or limited); and 

     

    (d)   any
      other
      interest or participation that confers on a Person the right to receive a share
      of the profits and losses of, or distributions of assets of, the issuing Person.
      

     

    “Cash
      Equivalents” means: 

     

    (1) 
      United
      States dollars; 

     

    (2) 
      Government Securities having maturities of not more than twelve months from
      the
      date of acquisition; 

     

    (3) 
      time
      deposit accounts, term deposit accounts, money market deposit accounts, time
      deposits, bankers’ acceptances, certificates of deposit and eurodollar time
      deposits with maturities of twelve months or less from the date of acquisition,
      bankers’ acceptances with maturities of twelve months or less from the date of
      acquisition, overnight bank deposits, and demand deposit accounts in each case
      with any lender party to the Senior Credit Facilities or with any domestic
      commercial bank having capital and surplus in excess of $500 million and a
      Thomson Bank Watch Rating of “B” or better; 

     

    (4) 
      repurchase obligations with a term of not more than 30 days for underlying
      securities of the types described in clauses (2) and (3) above entered
      into with any financial institution meeting the qualifications specified in
      clause (3) above; 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (5) 
      commercial paper having the rating of “P-2” (or higher) from Moody’s or “A-2”
(or higher) from Standard & Poor’s and in each case maturing within
      twelve months after the date of acquisition; and 

     

    (6) 
      any fund
      investing substantially all its assets in investments that constitute Cash
      Equivalents of the kinds described in clauses (1) through (5) of this
      definition. 

     

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

     

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

     

    (2) 
      the
      adoption of a plan relating to the liquidation or dissolution of the Company;
      

     

    (3) 
      any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
      Exchange Act or any successor provisions to either of the foregoing), including
      any group acting for the purpose of acquiring, holding, voting or disposing
      of
      securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act,
      becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act,
      except that a Person will be deemed to have “beneficial ownership” of all shares
      that any such Person has the right to acquire, whether such right is exercisable
      immediately or only after the passage of time), directly or indirectly, of
      35.0%
      or more of the total voting power of the Voting Stock of the Company); or

     

    (4) 
      the
      first day on which a majority of the members of the Board of Directors of the
      Company are not Continuing Directors of the Company. 

     

    “Clipper
      Partnerships” means the limited partnerships and limited liability companies
      that own skilled nursing facilities in New Hampshire currently leased by
      subsidiaries of the Company, in which the Company has ownership interests and
      as
      to which the Company has options to acquire the remaining ownership interests
      held by third parties. 

     

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

     

    “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.

     

    “Comparable
      Treasury Issue” means the United States Treasury security selected by the
      Quotation Agent as having a maturity comparable to the remaining
      term

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    of
      the
      Notes from the redemption date to April 15, 2011, that would be utilized, at
      the
      time of selection and in accordance with customary financial practice, in
      pricing new issues of corporate debt securities of a maturity most nearly equal
      to April 15, 2011.

     

    “Comparable
      Treasury Price” means, with respect to any redemption date, if clause (2)
      of the Adjusted Treasury Rate definition is applicable, the average of three,
      or
      such lesser number as is obtained by the Trustee, Reference Treasury Dealer
      Quotations for such redemption date.

     

    “Consolidated
      Cash Flow” means, with respect to any Person for any period, the Consolidated
      Net Income of such Person for such period, plus (minus)
      to the
      extent deducted (added) in computing such Consolidated Net Income: 

     

    (1) 
      provision for taxes based on income or profits of such Person and its
      Subsidiaries for such period; plus
      (minus)
      

     

    (2) 
      Fixed
      Charges; plus
      (minus)
      

     

    (3) 
      depreciation, amortization (including amortization of goodwill and other
      intangibles but excluding amortization of prepaid cash expenses that were paid
      in a prior period) and other non-cash charges (excluding any such non-cash
      charge to the extent that it represents an accrual of or reserve for cash
      expenses in any future period or amortization of a prepaid cash expense that
      was
      paid in a prior period) of such Person and its Subsidiaries for such period;
      plus
      (minus)
      

     

    (4) 
      any
      non-capitalized transaction costs incurred in connection with actual or proposed
      financings, acquisitions or divestitures (including financing and refinancing
      fees and costs incurred in connection with the Transactions); plus
      (minus) 

     

    (5) 
      Minority
      Interest with respect to any Restricted Subsidiary; plus
      (minus)
      

     

    (6) 
      transaction expenses associated with acquisitions of facilities; plus
      (minus)

     

    (7) 
      all
      lease payments in respect of operating leases arising out of Sale and Leaseback
      Transactions with respect to which and to the extent that the Company or any
      Restricted Subsidiary was deemed to have incurred Attributable Debt.

     

    Notwithstanding
      the preceding, the provision for taxes on the income or profits of, and the
      depreciation and amortization and other non-cash charges of, a Subsidiary of
      the
      referent Person shall be added to Consolidated Net Income to compute
      Consolidated Cash Flow only to the extent (and in the same proportion) that
      Net
      Income of such Subsidiary was included in calculating Net Income of such Person.
      

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Consolidated
      Interest Expense” means, with respect to any Person for any period, the sum of,
      without duplication: 

     

    (1) 
      the
      interest expense of such Person and its Restricted Subsidiaries for such period,
      on a combined, consolidated basis, determined in accordance with GAAP (including
      amortization of original issue discount, non-cash interest payments, the
      interest component of all payments associated with Capital Lease Obligations,
      commissions, discounts and other fees and charges incurred in respect of letter
      of credit or bankers’ acceptance financings, and net payments, if any, pursuant
      to Hedging Obligations; provided,
      however,
      that in
      no event shall any amortization of deferred financing costs be included in
      Consolidated Interest Expense) plus
      the
      interest component of all payments associated with Attributable Debt determined
      by such Person in good faith on a basis consistent with comparable
      determinations for Capital Lease Obligations under GAAP; plus 

     

    (2) 
      the
      consolidated capitalized interest of such Person and its Restricted Subsidiaries
      for such period, whether paid or accrued. 

     

    Notwithstanding
      the preceding, the Consolidated Interest Expense with respect to any Restricted
      Subsidiary that is not a Wholly Owned Subsidiary shall be included only to
      the
      extent (and in the same proportion) that the net income of such Restricted
      Subsidiary was included in calculating Consolidated Net Income. 

     

    “Consolidated
      Net Income” means, with respect to any Person for any period, the aggregate of
      the Net Income of such Person and its Restricted Subsidiaries for such period,
      on a consolidated basis, determined in accordance with GAAP, plus (minus)
      to the
      extent deducted (added) in computing such Net Income: 

     

    (1) 
      direct
      or indirect fees, costs, expenses and charges (including any penalties or
      premiums payable) of the Company related to the Transactions which are paid,
      taken or otherwise accounted for within one year of the consummation of the
      Transactions; plus
      (minus)

     

    (2) 
      any gain
      or loss, together with any related provision for taxes on such gain or loss,
      realized in connection with (a) any Asset Sale or (b) the acquisition
      or disposition of any securities by such Person or any of its Restricted
      Subsidiaries
      plus
      (minus);

     

    (3) 
      any
      extraordinary, nonrecurring or non-operating gain or loss, together with any
      related provision for taxes on such extraordinary, nonrecurring or non-operating
      gain or loss; 

     

    provided,
      however,
      that:

     

    (1) 
      the Net
      Income (but not loss) of any Person that is not a Restricted Subsidiary or
      that
      is accounted for by the equity method of accounting shall be included only
      to
      the extent of the amount of dividends or distributions paid in

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    cash
      to
      the referent Person or (subject to clause (2) below) a Restricted
      Subsidiary thereof; 

     

    (2) 
      the Net
      Income of any Restricted Subsidiary shall be excluded to the extent that the
      declaration or payment of dividends or similar distributions by such Restricted
      Subsidiary of such Net Income is not at the date of determination permitted
      without any prior governmental approval that has not been obtained or, directly
      or indirectly, by operation of the terms of its charter or any agreement,
      instrument, judgment, decree, order, statute, rule or governmental regulation
      applicable to such Subsidiary, except to the extent of the amount of dividends
      or other distributions actually paid to the Company or any of its Restricted
      Subsidiaries by such Restricted Subsidiary during such period; 

     

    (3) 
      any
      non-cash compensation expense attributable to grants of stock options,
      restricted stock or similar rights to officers, directors and employees of
      such
      Person and any of its Subsidiaries shall be excluded; and

     

    (4) 
      the
      cumulative effect of a change in accounting principles shall be excluded.

     

    “Continuing
      Directors” means, as of any date of determination, any member of the Board of
      Directors of the Company who: 

     

    (1) 
      was a
      member of such Board of Directors of the Company on the Issue Date;
      or

     

    (2)  
      was nominated for election or elected to such Board of Directors of the Company
      with the approval of a majority of the Continuing Directors who were members
      of
      such Board of Directors at the time of such nomination or election.

     

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

     

    “Designated
      Non-cash Consideration” means, the fair market value of non-cash consideration
      received by the Company or a Restricted Subsidiary in connection with an Asset
      Sale that is so designated as Designated Non-cash Consideration pursuant to
      an
      Officers’ Certificate, setting forth the basis of such valuation, executed by an
      executive vice president and the principal financial officer of the Company,
      less the amount of cash or Cash Equivalents received in connection with a
      subsequent sale of such Designated Non-cash Consideration. 

     

    “Designated
      Senior Debt” means: 

     

    (1) 
      any
      Indebtedness outstanding under the Senior Credit Facilities; and 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (2) 
      any
      other Senior Indebtedness permitted under this Indenture the principal amount
      of
      which is $50.0 million or more and that has been designated by the Company
      as “Designated Senior Debt.” 

     

    “Disqualified
      Stock” means any Capital Stock that, by its terms (or by the terms of any
      security into which it is convertible or for which it is exchangeable), or
      upon
      the happening of any event, matures or is mandatorily redeemable, pursuant
      to a
      sinking fund obligation or otherwise, or redeemable at the option of the Holder
      thereof, in whole or in part, on or prior to the date that is 91 days after
      the
      date on which the Notes mature. Notwithstanding the preceding sentence, any
      Capital Stock that would not qualify as Disqualified Stock but for change of
      control or asset sale provisions shall not constitute Disqualified Stock if
      the
      provisions are not more favorable to the holders of such Capital Stock than
      the
      provisions of Sections 4.10 and 4.06, respectively, and such Capital Stock
      specifically provides that the Company will not redeem or repurchase any such
      Capital Stock pursuant to such provisions prior to the Company’s purchase of the
      Notes as required pursuant to the provisions of Section 4.10 and 4.06,
      respectively. 

     

    “Domestic
      Restricted Subsidiary” means, with respect to the Company, any Restricted
      Subsidiary that was formed under the laws of the United States of America or
      any
      State thereof or the District of Columbia. 

     

    “Equity
      Interests” means Capital Stock and all warrants, options or other rights to
      acquire Capital Stock (but excluding any debt security that is convertible
      into,
      or exchangeable for, Capital Stock). 

     

    “Escrow
      Agent” means Wells Fargo Bank, National Association, as escrow agent, until a
      successor replaces it in accordance with the applicable provisions of the Escrow
      Agreement and thereafter means the successor serving thereunder.

     

    “Escrow
      Agreement” means the Escrow Agreement, dated as of April 12, 2007, between the
      Company and Wells Fargo Bank, National Association, as Escrow
      Agent.

     

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

     

    “Existing
      Indebtedness” means Indebtedness of the Company and its Subsidiaries (other than
      (x) Indebtedness under the Senior Credit Facilities, (y) Indebtedness
      represented by the Initial Notes or (z) Indebtedness of the Clipper Partnerships
      to the extent reflected on the Company's consolidated balance sheet on the
      Issue
      Date in accordance with GAAP) in existence on the Issue Date after giving effect
      to the Transactions, until such amounts are repaid. 

     

    “Fixed
      Charge Coverage Ratio” means with respect to any Person or Persons for any
      period, the ratio of the Consolidated Cash Flow of such Person for such period
      to the Fixed Charges of such Person for such period. In the event that the
      Company or any Restricted Subsidiary incurs, assumes, guarantees or redeems
      any
      Indebtedness (other than revolving credit borrowings) or issues or redeems
      Preferred

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Stock
      subsequent to the commencement of the period for which the Fixed Charge Coverage
      Ratio is being calculated but on or prior to the date on which the event for
      which the calculation of the Fixed Charge Coverage Ratio is made (the
“Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated
      giving pro
      forma
      effect
      to such incurrence, assumption, guarantee or redemption of Indebtedness, or
      such
      issuance or redemption of Preferred Stock, as if the same had occurred at the
      beginning of the applicable four-quarter reference period. 

     

    In
      addition, for purposes of calculating the Fixed Charge Coverage Ratio:

     

    (1) 
      acquisitions that have been made by the Company or any Restricted Subsidiary,
      including through mergers or consolidations and including any related financing
      transactions, during the four-quarter reference period or subsequent to such
      reference period and on or prior to the Calculation Date shall be calculated
      to
      include the Consolidated Cash Flow of the acquired entities on a pro
      forma
      basis
      (which shall be determined in good faith by the chief financial officer of
      the
      Company) after giving effect to Pro Forma Cost Savings, shall be deemed to
      have
      occurred on the first day of the four-quarter reference period; 

     

    (2) 
      the
      Consolidated Cash Flow attributable to operations or businesses disposed of
      prior to the Calculation Date shall be excluded; 

     

    (3) 
      the
      Fixed Charges attributable to operations or businesses disposed of prior to
      the
      Calculation Date shall be excluded, but only to the extent that the obligations
      giving rise to such Fixed Charges will not be obligations of the specified
      Person or any of its Restricted Subsidiaries following the Calculation Date;
      

     

    (4) 
      if (i)
      any Restricted Subsidiary is designated as an Unrestricted Subsidiary or (ii)
      any Unrestricted Subsidiary is designated as a Restricted Subsidiary, in either
      case during the four-quarter reference period or subsequent to such reference
      period and on or prior to the Calculation Date, such designation will be deemed
      to have occurred on the first day of the four-quarter reference period; and
      

     

    (5) 
      if any
      Indebtedness bears a floating rate of interest, the interest expense on such
      Indebtedness shall be calculated as if the rate in effect on the Calculation
      Date had been the applicable rate for the entire period (taking into account
      any
      Hedging Obligation applicable to such Indebtedness if such Hedging Obligation
      has a remaining term as at the Calculation Date in excess of 12 months).

     

    “Fixed
      Charges” means, with respect to any Person for any period, the sum, without
      duplication, of: 

     

    (1) 
      the
      Consolidated Interest Expense of such Person for such period; plus 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (2) 
      any
      interest expense on Indebtedness of another Person that is guaranteed by such
      Person or one of its Restricted Subsidiaries or secured by a Lien on assets
      of
      such Person or one of its Restricted Subsidiaries, whether or not such guarantee
      or Lien is called upon; plus 

     

    (3) 
      the
      product of (a) all dividend payments, whether paid or accrued and whether
      or not in cash, on any series of Preferred Stock of such Person or any of its
      Restricted Subsidiaries, other than dividend payments on Equity Interests
      payable solely in Qualified Equity Interests, times (b) a fraction, the
      numerator of which is one and the denominator of which is one minus the then
      current combined federal, state and local statutory tax rate of such Person,
      expressed as a decimal, in each case, on a consolidated basis and in accordance
      with GAAP. 

     

    “Foreign
      Subsidiary” means any Restricted Subsidiary of the Company that is not organized
      under the laws of the United States of America or any State thereof or the
      District of Columbia.

     

    “GAAP”
      means generally accepted accounting principles in the United States of America
      as in effect from time to time, including those set forth in: 

     

    (1) 
      the
      opinions and pronouncements of the Accounting Principles Board of the American
      Institute of Certified Public Accountants; 

     

    (2) 
      statements and pronouncements of the Financial Accounting Standards Board;
      

     

    (3) 
      such
      other statements by such other entity as approved by a significant segment
      of
      the accounting profession; and 

     

    (4) 
      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.

     

    “Government
      Securities” means direct obligations of, or obligations guaranteed by, the
      United States of America and the payment for which the United States
      pledges its full faith and credit.

     

    “guarantee”
      means a guarantee other than by endorsement of negotiable instruments for
      collection in the ordinary course of business, direct or indirect, in any manner
      including letters of credit and reimbursement agreements in respect thereof,
      of
      all or any part of any Indebtedness. 

     

    “Guaranty
      Agreement” means a supplemental indenture, in a form reasonably acceptable to
      the Trustee, pursuant to which a Subsidiary Guarantor guarantees the Company’s
      obligations under this Indenture and with respect to the Notes on the terms
      provided for in Article 11. 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

        “Hedging
      Obligations” means, with respect to any Person, the obligations of such Person
      under: 

     

        (1) 
      interest
      rate swap agreements, interest rate cap agreements and interest rate collar
      agreements; and 

     

        (2) 
      other
      agreements or arrangements designed to change the allocation of risk due to
      fluctuations in interest rates, currency exchange rates or commodity
      prices.

     

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

     

        “Indebtedness”
means,
      with respect to any specified Person, any indebtedness of such Person, in
      respect of: 

     

        (1) 
      borrowed
      money;

     

        (2) 
      obligations evidenced by bonds, notes, debentures or similar instruments or
      letters of credit (or reimbursement agreements in respect thereof);

     

        (3) 
      bankers’
acceptances; 

     

        (4) 
      Capital
      Lease Obligations;

     

        (5) 
      Attributable Debt; or 

     

        (6) 
      (a) the balance deferred and unpaid of the purchase price of any property,
      except any such balance that constitutes an accrued expense or trade payable
      or
      (b) representing the net amount payable in respect of any Hedging
      Obligations;

     

    if
      and to
      the extent any of the preceding items (other than letters of credit,
      Attributable Debt and Hedging Obligations) would appear as a liability upon
      a
      balance sheet of the specified Person prepared in accordance with GAAP. In
      addition, the term “Indebtedness” with respect to a specified Person includes
      (i) all Indebtedness of others secured by a Lien on any asset of the
      specified Person (whether or not such Indebtedness is assumed by the specified
      Person), but only to the extent that the aggregate amount of such Indebtedness
      does not exceed fair market value of the asset and, to the extent not otherwise
      included, the guarantee by such Person of any Indebtedness of any other Person;
      provided,
      however,
      that
      Indebtedness shall not include the pledge by the Company of the Capital Stock
      of
      an Unrestricted Subsidiary to secure Non-Recourse Debt of such Unrestricted
      Subsidiary and (ii) all Disqualified Stock of the Specified Person. In no
      event shall non-contractual obligations or liabilities in respect of any Capital
      Stock constitute Indebtedness under this definition. 

     

    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;

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    provided,
      however,
      that in
      the case of Indebtedness sold at a discount or which does not require current
      payments of interest, the amount of such Indebtedness at any time will be the
      accreted value thereof at such time. 

     

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

     

    “Investments”
      means, with respect to any Person, all investments by such Person in other
      Persons (including Affiliates) in the forms of direct or indirect loans
      (including guarantees of Indebtedness or other obligations), advances or capital
      contributions (excluding commission, travel advances and other loans and
      advances to officers and employees made in the ordinary course of business),
      purchases or other acquisitions for consideration of Indebtedness, Equity
      Interests or other securities, together with all items that are or would be
      classified as investments on a balance sheet prepared in accordance with GAAP.
      If the Company or any Restricted Subsidiary sells or otherwise disposes of
      any
      Equity Interests of any direct or indirect Restricted Subsidiary such that,
      after giving effect to any such sale or disposition, such Person is no longer
      a
      Restricted Subsidiary, then the Company shall be deemed to have made an
      Investment on the date of any such sale or disposition equal to the fair market
      value of the Equity Interests of such Restricted Subsidiary not sold or disposed
      of determined at the time of such sale or disposition. Notwithstanding the
      foregoing, purchases, redemptions or other acquisitions of Equity Interests
      of
      the Company or any direct or indirect parent of the Company shall not be deemed
      Investments. The amount of an investment shall be determined at the time the
      Investment is made and without giving effect to subsequent changes in
      value.

     

    “Issue
      Date” means April 12, 2007.

     

    “Legal
      Holiday” means a Saturday, a Sunday or a day on which banking institutions are
      not required to be open in the State of New York.

     

    “Lien”
      means, with respect to any asset, any mortgage, lien, pledge, charge, security
      interest or encumbrance of any kind in respect of such asset, whether or not
      filed, recorded or otherwise perfected under applicable law, including any
      conditional sale or other title retention agreement, any option or other
      agreement to sell or give a security interest in and any consensual filing
      of
      any financing statement under the Uniform Commercial Code (or equivalent
      statutes) of any jurisdiction other than filings in respect of leases otherwise
      permitted under this Indenture.

     

    “Merger”
      means the merger of Horizon Merger, Inc. with Harborside Healthcare Corporation
      as part of the Transactions.

     

    “Merger
      Agreement” means the Agreement and Plan of Merger dated as of October 19, 2006,
      among the Company, Horizon Merger Inc. and Harborside Healthcare
      Corporation.

     

    “Minority
      Interest” means, with respect to any Person, interests in income (loss) of any
      of such Person’s Subsidiaries held by one or more Persons other than
      such

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    Person
      or
      another Subsidiary of such Person, as reflected on such Person’s consolidated
      financial statements.

     

    “Moffie
      Portfolio” means the five facilities in Connecticut that are operated by
      Harborside Healthcare Corporation as of the Issue Date, as to which Harborside
      has exercised an option to purchase.

     

    “Moody’s”
      means Moody’s Investment Service, Inc. and any successor to its rating agency
      business.

     

    “Net
      Income” means, with respect to any Person, the net income (loss) of such Person,
      determined in accordance with GAAP and before any reduction in respect of
      Preferred Stock dividends, excluding, however:

     

    (1) 
      any
      income or expense incurred in connection with the extinguishment of any
      Indebtedness of such Person or any of its Restricted Subsidiaries; 

     

    (2) 
      any
      depreciation, amortization, non-cash impairment or other non-cash charges or
      expenses recorded as a result of the application of purchase accounting in
      accordance with Accounting Principles Board Opinion Nos. 16 and 17 or SFAS
      Nos. 141 and 142; and 

     

    (3) 
      any
      gain, loss, income, expense or other charge recognized or incurred in connection
      with changes in value or dispositions of Investments made pursuant to
      clause (8) of the definition of Permitted Investments (it being understood
      that this clause (3) shall not apply to any expenses incurred in connection
      with the funding of contributions to any plan). 

     

    “Net
      Proceeds” means the aggregate proceeds in the form of cash or Cash Equivalents
      received by the Company or any Restricted Subsidiary in respect of any Asset
      Sale (including any cash or Cash Equivalents received upon the sale or other
      disposition of any non-cash consideration received in any Asset Sale), net
      of
      the direct costs relating to such Asset Sale, including (a) fees and
      expenses related to such Asset Sale (including legal, accounting and investment
      banking fees and discounts, and sales and brokerage commissions, and any
      relocation expenses incurred as a result of the Asset Sale), (b) taxes paid
      or payable as a result of the Asset Sale, in each case, after taking into
      account any available tax credits or deductions and any tax sharing
      arrangements, (c) amounts required to be applied to the repayment of
      Indebtedness, other than Indebtedness under the Senior Credit Facilities,
      secured by a Lien on the asset or assets that were the subject of such Asset
      Sale, (d) any reserve in accordance with GAAP against any liabilities
      associated with such Asset Sale and retained by the seller after such Asset
      Sale, including pension and other post-employment benefit liabilities,
      liabilities related to environmental matters and liabilities under any
      indemnification obligations associated with such Asset Sale and (e) cash
      escrows (until released from escrow to the seller). 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    “Non-Recourse
      Debt” means Indebtedness: 

     

    (1) 
      as to
      which neither the Company nor any Restricted Subsidiary: 

     

    (a) provides
      credit support of any kind (including any undertaking, agreement or instrument
      that would constitute Indebtedness); 

     

    (b) is
      directly or indirectly liable as a guarantor or otherwise; or 

     

    (c) constitutes
      the lender; 

     

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

     

    (3) 
      as to
      which the lenders have been notified in writing that they will not have any
      recourse to the stock (other than stock of an Unrestricted Subsidiary pledged
      by
      the Company to secure debt of such Unrestricted Subsidiary) or assets of the
      Company or such Restricted Subsidiary. 

     

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

     

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

     

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

     

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

     

    “Permitted
      Business” means any business in which the Company and the Restricted
      Subsidiaries are engaged on the Issue Date or any business reasonably related,
      ancillary or complementary thereto, or reasonable extensions thereof.

     

    “Permitted
      Investments” means: 

     

    (1) 
      any
      Investment in the Company or in any Restricted Subsidiary; 

     

    (2) 
      any
      Investment in Cash Equivalents; 

     

    (3) 
      any
      Investment in a Person, if as a result of such Investment: 

     

    (a) such
      Person becomes a Restricted Subsidiary; or 

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (b) such
      Person is merged, consolidated or amalgamated with or into, or transfers or
      conveys substantially all of its assets to, or is liquidated into, the Company
      or a Restricted Subsidiary; 

     

    (4) 
      any
      Investment made as a result of the receipt of non-cash consideration from an
      Asset Sale that was made pursuant to and in compliance with Section 4.06 or
      any other disposition of assets not constituting an Asset Sale; 

     

    (5) 
      any
      Investment existing on the Issue Date; 

     

    (6) 
      other
      Investments made after the Issue Date in a Permitted Business having an
      aggregate fair market value (measured on the date each such Investment was
      made
      and without giving effect to subsequent changes in value), when taken together
      with all other Investments made pursuant to this clause (6) after the Issue
      Date that are at the time outstanding, not to exceed the greater of
      (a) $15.0 million or (b) 2.0% of the Total Assets of the Company;

     

    (7) 
      any
      Investment made for consideration consisting solely of Qualified Equity
      Interests; 

     

    (8) 
      any
      Investment made in connection with the funding of contributions under any
      non-qualified employee retirement plan or similar employee compensation plan
      in
      an amount not to exceed the amount of compensation expense recognized by the
      Company and any Restricted Subsidiary in connection with such plans;

     

    (9) 
      any
      Investment received in compromise or resolution of (a) obligations of trade
      creditors or customers that were incurred in the ordinary course of business
      of
      the Company or any Restricted Subsidiary, including pursuant to any plan of
      reorganization or similar arrangement upon the bankruptcy or insolvency of
      any
      trade creditor or customer or (b) litigation, arbitration or other disputes
      with Persons that are not Affiliates; 

     

    (10) Hedging
      Obligations permitted by Section 4.03; 

     

    (11) any
      Investment consisting of prepaid expenses, negotiable instruments held for
      collection and lease, endorsements for deposit or collection in the ordinary
      course of business, utility or workers compensation, performance and similar
      deposits entered into as a result of the operations of the business in the
      ordinary course of business; 

     

    (12) pledges
      or deposits by a Person under workers compensation laws, unemployment insurance
      laws or similar legislation, or deposits in connection with bids, tenders,
      contracts (other than for the payment of Indebtedness) or leases to which such
      Person is a party, or deposits as security for contested taxes or import duties
      or for the payment of rent, in each case incurred in the ordinary course of
      business; 

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (13) any
      Investment consisting of a loan or advance to officers, directors or employees
      of the Company or a Restricted Subsidiary in connection with the purchase by
      such Persons of Equity Interests of the Company; 

     

    (14) loans
      or
      advances to employees made in the ordinary course of business of the Company
      or
      any Restricted Subsidiary of the Company in an aggregate principal amount not
      to
      exceed $2 million at any one time outstanding; 

     

    (15) repurchases
      of the Notes; 

     

    (16) purchases
      of additional Equity Interests in the Clipper Partnerships pursuant to the
      terms
      of the options to acquire such Equity Interests in existence on the Issue
      Date;

     

    (17) guarantees
      of Indebtedness permitted by Section 4.03; and 

     

    (18) other
      Investments made after the Issue Date in any Person having an aggregate fair
      market value (measured on the date each such Investment was made and without
      giving effect to subsequent changes in value), when taken together with all
      other outstanding Investments made pursuant to this clause (18) after the
      Issue Date, not to exceed the greater of (a) $15.0 million or
      (b) 2.0% of the Total Assets of the Company. 

     

    “Permitted
      Junior Securities” means: 

     

    (1) 
      Equity
      Interests in the Company or any Subsidiary Guarantor; or 

     

    (2) 
      debt
      securities that are subordinated to all Senior Indebtedness and any debt
      securities issued in exchange for Senior Indebtedness to substantially the
      same
      extent as, or to a greater extent than, the Notes and the Subsidiary Guaranties
      are subordinated to Senior Indebtedness under this Indenture. 

     

    “Permitted
      Refinancing Indebtedness” means any Indebtedness of the Company or any
      Restricted Subsidiary issued in exchange for, or the net proceeds of which
      are
      used to extend, refinance, renew, defease or discharge or refund (collectively,
      “Refinance”)
      other
      Indebtedness of the Company or any Restricted Subsidiary; provided,
      however,
      that:

     

    (1) 
      the
      principal amount (or accreted value, if applicable) of such Permitted
      Refinancing Indebtedness does not exceed the principal amount of (or accreted
      value, if applicable), plus accrued interest on, the Indebtedness so extended,
      refinanced, renewed, replaced, discharged, defeased or refunded (plus the amount
      of reasonable expenses and premiums incurred in connection therewith);

     

    (2) 
      such
      Permitted Refinancing Indebtedness has a final maturity date no earlier than
      the
      final maturity date of, and has a Weighted Average Life to Maturity equal to
      or
      greater than the Weighted Average Life to Maturity of, the

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    Indebtedness
      being extended, refinanced, renewed, defeased, discharged or refunded;

     

    (3) 
      if the
      Indebtedness being extended, refinanced, renewed, replaced, defeased, refunded
      or discharged is pari
      passu
      in right
      of payment to the Notes, such Permitted Refinancing Indebtedness shall be
pari
      passu
      in right
      of payment to the Notes, and if such Indebtedness is subordinated in right
      of
      payment to the Notes, such Permitted Refinancing Indebtedness has a final
      maturity date later than the final maturity date of, and is subordinated in
      right of payment to (as applicable), the Notes on terms of subordination at
      least as favorable to the Holders as those contained in the documentation
      governing the Indebtedness being extended, refinanced, renewed, defeased,
      discharged or refunded; and

     

    (4) 
      Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor
      may
      not be used to Refinance any Indebtedness of the Company or a Subsidiary
      Guarantor. 

     

    “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) which is preferred as to the payment
      of dividends or distributions, or as to the distribution of assets upon any
      voluntary or involuntary liquidation or dissolution of such Person, over shares
      of Capital Stock of any other class of such Person. The “principal” amount of
      any Preferred Stock at any date shall be the liquidation preference (or, if
      greater, the mandatory redemption price, if any) of such Preferred Stock at
      such
      date. 

     

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

     

    “Pro
      Forma Cost Savings” means, with respect to any period, the reductions in costs
      (including such reductions resulting from employee terminations, facilities
      consolidations and closings, standardization of employee benefits and
      compensation policies, consolidation of property, casualty and other insurance
      coverage and policies, standardization of sales and distribution methods,
      reductions in taxes other than income taxes) that occurred during such period
      that are (1) directly attributable to an asset acquisition or
      (2) implemented, committed to be implemented, specifically identified to be
      implemented or the commencement of implementation of which has begun in good
      faith by the business that was the subject of any such asset acquisition within
      six months of the date of the asset acquisition and that are supportable and
      quantifiable by the underlying records of such business, as if, in the case
      of
      each of clauses (1) and (2), all such reductions in costs had been effected
      as of the beginning of such period, decreased by any incremental expenses
      incurred or to be incurred during

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    such
      period in order to achieve such reduction in costs, all such costs to be
      determined in good faith by the chief financial officer of the Company.

     

    “Public
      Equity Offering” means an underwritten primary public offering of common stock
      of the Company pursuant to an effective registration statement under the
      Securities Act.

     

    “Qualified
      Equity Interests” means Equity Interests of the Company other than Disqualified
      Stock. 

     

    “Quotation
      Agent” means the Reference Treasury Dealer selected by the Trustee after
      consultation with the Company. 

     

    “Reference
      Treasury Dealer” means Credit Suisse Securities (USA) LLC and its successors and
      assigns, CIBC World Markets Corp. and its successors and assigns, UBS Securities
      LLC and its successors and assigns and Jefferies & Company, Inc. and its
      successors and assigns. 

     

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

     

    “Representative”
      means, with respect to a Person, any trustee, agent or representative (if any)
      for an issue of Senior Indebtedness of such Person. 

     

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

     

    “Restricted
      Subsidiary” means any Subsidiary of the Company that is not an Unrestricted
      Subsidiary. 

     

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

     

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

     

    “Secured
      Indebtedness” means any Indebtedness of the Company secured by a Lien.

     

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

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    “Senior
      Credit Facilities” means the Credit Agreement to be entered into in connection
      with the Merger and among the Company, Credit Suisse, as administrative agent
      and collateral agent, and the other agents and lenders named therein, providing
      for revolving credit borrowings and term loans, including any related notes,
      guarantees, collateral documents, instruments and agreements executed in
      connection therewith, and in each case as amended, modified, renewed, refunded,
      replaced or refinanced from time to time including increases in principal
      amount. 

     

    “Senior
      Indebtedness” means with respect to any Person: 

     

    (1) 
      Indebtedness of such Person, whether outstanding on the Issue Date or thereafter
      Incurred; and 

     

    (2) 
      all
      other Obligations of such Person (including interest accruing on or after the
      filing of any petition in bankruptcy or for reorganization relating to such
      Person whether or not post-filing interest is allowed in such proceeding) in
      respect of Indebtedness described in clause (1) above 

     

    unless,
      in the case of clauses (1) and (2), in the instrument creating or
      evidencing the same or pursuant to which the same is outstanding, it is provided
      that such Indebtedness or other obligations are subordinate or pari passu in
      right of payment to the Notes or the Subsidiary Guaranty of such Person, as
      the
      case may be; provided,
      however,
      that
      Senior Indebtedness shall not include: 

     

    (1) 
      any
      obligation of such Person to the Company or any Subsidiary; 

     

    (2) 
      any
      liability for federal, state, local or other taxes owed or owing by such Person;
      

     

    (3) 
      any
      accounts payable or other liability to trade creditors arising in the ordinary
      course of business; 

     

    (4) 
      any
      Indebtedness or other Obligation of such Person which is subordinate or junior
      in any respect to any other Indebtedness or other Obligation of such Person;
      or

     

    (5) 
      that
      portion of any Indebtedness which at the time of Incurrence is Incurred in
      violation of this Indenture. 

     

    “Senior
      Subordinated Indebtedness” means, with respect to a Person, the Notes (in the
      case of the Company), the Subsidiary Guaranty (in the case of a Subsidiary
      Guarantor) and any other Indebtedness of such Person that specifically provides
      that such Indebtedness is to rank pari passu with the Notes or such Subsidiary
      Guaranty, as the case may be, in right of payment and is not subordinated by
      its
      terms in right of payment to any Indebtedness or other Obligation of such Person
      which is not Senior Indebtedness of such Person. 

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    “Significant
      Subsidiary” means any Restricted Subsidiary, or group of Restricted
      Subsidiaries, 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 &
      Poor’s” means Standard & Poor’s, a division of The McGraw-Hill
      Companies, Inc., and any successor to its rating agency business. 

     

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

     

    “Subordinated
      Obligation” means, with respect to a Person, any Indebtedness of such Person
      (whether outstanding on the Issue Date or thereafter Incurred) which is
      subordinate or junior in right of payment to the Notes or a Subsidiary Guaranty
      of such Person, as the case may be, pursuant to a written agreement to that
      effect. 

     

    “Subsidiary”
      means, with respect to any Person: 

     

    (1) 
      any
      corporation, association or other business entity of which more than 50% of
      the
      total voting power of shares of Capital Stock entitled (without regard to the
      occurrence of any contingency) to vote in the election of directors, managers
      or
      trustees thereof is at the time owned or controlled, directly or indirectly,
      by
      such Person or one or more of the other Subsidiaries of that Person (or a
      combination thereof); and 

     

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

     

    “Subsidiary
      Guarantor” means a Subsidiary of the Company that guarantees the Company’s
      payment obligations under this Indenture and the Notes and upon consummation
      of
      the Transactions, shall initially be those Subsidiaries set forth on Schedule
      I
      hereto. 

     

    “Subsidiary
      Guaranty” means each senior subordinated guarantee by each Subsidiary Guarantor
      of the Company’s payment obligations under this Indenture and the Notes pursuant
      to Article 11 or contained in a Guaranty Agreement executed pursuant to this
      Indenture. 

     

    “Total
      Assets” means the total combined, consolidated assets of the Company and its
      Restricted Subsidiaries, as would be shown on the Company’s consolidated balance
      sheet in accordance with GAAP on the date of determination. 

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    “Transactions”
      means the acquisition by Sun Healthcare Group, Inc. of Harborside Healthcare
      Corporation, the issuance and sale of the Initial Notes, the execution and
      delivery of the Senior Credit Facilities and documents related thereto and
      the
      initial extension of credit thereunder, and other transactions contemplated
      by
      the foregoing entered into and consummated in connection with such acquisition,
      including the purchase of the Moffie Portfolio and four properties in the State
      of Massachusetts currently operated by Harborside Healthcare Corporation, as
      to
      which Harborside has exercised an option to purchase, and the payment of fees
      and expenses in connection with the foregoing. 

     

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

     

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

     

    “Trust
      Officer” means the Chairman of the Board, the President or any other officer or
      assistant officer of the Trustee assigned by the Trustee to administer its
      corporate trust matters.

     

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

     

    “Unrestricted
      Subsidiary” means with respect to the Company, any Subsidiary of the Company
      that is designated by the Board of Directors of the Company as an Unrestricted
      Subsidiary pursuant to a Board Resolution, but only to the extent that such
      Subsidiary: 

     

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

     

    (2) 
      has not
      guaranteed or otherwise directly or indirectly provided credit support for
      any
      Indebtedness of the Company or any Restricted Subsidiary; and 

     

    (3) 
      has no
      Subsidiaries that are Restricted Subsidiaries. 

     

    Any
      designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall
      be evidenced to the Trustee by filing with the Trustee a certified copy of
      the
      Board Resolution giving effect to such designation and an Officers’ Certificate
      certifying that such designation complied with the preceding conditions and
      was
      permitted by Section 4.04. If, at any time, any Unrestricted Subsidiary
      would fail to meet the preceding requirements as an Unrestricted Subsidiary,
      it
      shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
      Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
      by a Restricted Subsidiary as of such date and, if such Indebtedness is not
      permitted to be incurred as of such date by Section 4.03, the Company shall
      be in default of such section. The Board of Directors of the Company may at
      any
      time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided,
      however,
      that
      such designation shall be deemed to be an incurrence of Indebtedness by a
      Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
      Subsidiary

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    and
      such
      designation shall be permitted only if (1) such Indebtedness is permitted
      by Section 4.03 and (2) no Default would be in existence following
      such designation. 

     

    “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 at the issuer’s option. 

     

    “Voting
      Stock” of a Person means all classes of Capital Stock 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.
      

     

    “Weighted
      Average Life to Maturity” means, when applied to any Indebtedness at any date,
      the number of years obtained by dividing: 

     

    (1) 
      the sum
      of the products obtained by multiplying: (a) the amount of each then
      remaining installment, sinking fund, serial maturity or other required payments
      of principal, including payment at final maturity, in respect thereof, by
      (b) the number of years (calculated to the nearest one-twelfth) that will
      elapse between such date and the making of such payment, by 

     

    (2) 
      the then
      outstanding principal amount of such Indebtedness. 

     

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

     

    Other
      Definitions.

     

    
      	
              Term

            	
              Defined
                in

              Section

            
	
              “Affiliate
                Transaction”

            	
              4.07(a)

            
	
              “Asset
                Sale Offer”

            	
              4.06(c)

            
	
              “Blockage
                Notice”

            	
              10.03

            
	
              “Change
                of Control Offer”

            	
              4.10(a)

            
	
              “Change
                of Control Payment”

            	
              4.10(a)

            
	
              “covenant
                defeasance option”

            	
              8.01(b)

            
	
              “Custodian”

            	
              6.01

            
	
              “Escrow
                Funds”

            	
              3.07(a)

            
	
              “Event
                of Default”

            	
              6.01

            
	
              “Guaranteed
                Obligations”

            	
              11.01

            
	
              “incur”

            	
              4.03(a)

            
	
              “legal
                defeasance option”

            	
              8.01(b)

            
	
              “Offer
                Amount”

            	
              4.06(d)(2)

            
	
              “Offer
                Period”

            	
              4.06(d)(2)

            
	
              “Paying
                Agent”

            	
              2.03

            

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

      
        	
                “Payment
                  Blockage Period”

              	
                10.03

              
	
                “Payment
                  Default”

              	
                10.03

              
	
                “Permitted
                  Debt”

              	
                4.03(b)

              
	
                “Purchase
                  Date”

              	
                4.06(d)(1)

              
	
                “Registrar”

              	
                2.03

              
	
                “Restricted
                  Payment

              	
                4.04(a)

              

      

       

    

    SECTION
      1.02. 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:

     

    “indenture
      securities” means the Notes and the Subsidiary Guaranties;

     

    “indenture
      security holder” means a Noteholder;

     

    “indenture
      to be qualified” means this Indenture;

     

    “indenture
      trustee” or “institutional trustee” means the Trustee; and

     

    “obligor”
      on the indenture securities means the Company, each Subsidiary Guarantor and
      any
      successor 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
      1.03. Rules
      of Construction.
      Unless
      the context otherwise requires:

     

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

     

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

     

    (3) “or”
is
      not exclusive;

     

    (4) “including”
      means including without limitation;

     

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

     

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

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (7) 
      secured
      Indebtedness shall not be deemed to be subordinate or junior to any other
      secured Indebtedness merely because it has a junior priority with respect to
      the
      same collateral;

     

    (8) 
      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

     

    (9) 
      all
      references to the date the Notes were originally issued shall refer to the
      date
      the Initial Notes were originally issued on the Issue Date.

     

    ARTICLE
      TWO

     

    The
      Notes

     

    SECTION
      2.01. Form
      and Dating.
      Provisions relating to the Notes are set forth in the
      Rule 144A/Regulation S/IAI Appendix attached hereto (the “Appendix”)
      which is hereby incorporated in, and expressly made part of, this Indenture.
      The
      Initial Notes and the Trustee’s certificate of authentication shall be
      substantially in the form of Exhibit 1 to the Appendix which is hereby
      incorporated in, and expressly made a part of, this Indenture. The Exchange
      Notes, the Private Exchange Notes and the Trustee’s certificate of
      authentication shall be substantially in the form of Exhibit 2, which is hereby
      incorporated in and expressly made a part of this Indenture. The Notes may
      have
      notations, legends or endorsements required by law, stock exchange rule,
      agreements to which the Company is subject, if any, or usage (provided that
      any
      such notation, legend or endorsement is in a form acceptable to the Company).
      Each Note shall be dated the date of its authentication. The terms of the Notes
      set forth in the Appendix and Exhibits 1 and 2 are part of the terms
      of this Indenture.

     

    SECTION
      2.02. Execution
      and Authentication.
      At least
      one Officer shall sign the Notes for the Company by manual or facsimile
      signature. 

     

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

     

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

     

    On
      the
      Issue Date, the Trustee shall authenticate and deliver $200,000,000 million
      of
      91⁄8% Senior Subordinated Notes due 2015 and, at any time and from time to time
      thereafter, the Trustee shall authenticate and deliver Notes for original issue
      in an aggregate principal amount specified in such order, in each case upon
      a
      written order of the Company signed by at least one Officer of the Company.
      Such
      order shall specify the amount of the Notes to be authenticated and the date
      on
      which the original issue of Notes is to be authenticated and, in the case of
      an
      issuance of Additional Notes pursuant to

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    Section
      2.14 after the Issue Date, shall certify that such issuance is in compliance
      with Section 4.03.

     

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

     

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

     

    The
      Company shall enter into an appropriate agency agreement with any Registrar,
      Paying Agent or co-registrar not a party to this Indenture, which shall
      incorporate the terms of the TIA. The agreement shall implement the provisions
      of this Indenture that relate to such agent. The Company shall notify the
      Trustee of the name and address of any such agent. If the Company fails to
      maintain a Registrar or Paying Agent, the Trustee shall act as such and shall
      be
      entitled to appropriate compensation therefor pursuant to Section 7.08. The
      Company or any Wholly Owned Subsidiary incorporated or organized within The
      United States of America may act as Paying Agent, Registrar, co-registrar or
      transfer agent.

     

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

     

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

     

    SECTION
      2.05. Noteholder
      Lists.
      The
      Trustee shall preserve in as current a form as is reasonably practicable the
      most recent list available to it of the names and addresses of Noteholders.
      If
      the Trustee is not the Registrar, the Company shall

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    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 Noteholders.

     

    SECTION
      2.06. Transfer
      and Exchange.
      The
      Notes shall be issued in registered form and shall be transferable only upon
      the
      surrender of a Note for registration of transfer. When a Note is presented
      to
      the Registrar or a co-registrar with a request to register a transfer, the
      Registrar shall register the transfer as requested if the requirements of this
      Indenture and Section 8-401(1) of the Uniform Commercial Code are met. When
      Notes are presented to the Registrar or a co-registrar with a request to
      exchange them for an equal principal amount of Notes of other denominations,
      the
      Registrar shall make the exchange as requested if the same requirements are
      met.

     

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

     

    Every
      replacement Note is an additional Obligation of the Company.

     

    SECTION
      2.08. Outstanding
      Notes.
      Notes
      outstanding at any time are all Notes authenticated by the Trustee except for
      those canceled by it, those delivered to it for cancellation and those described
      in this Section as not outstanding. Except as set forth in Section 2.09, a
      Note does not cease to be outstanding because the Company or an Affiliate of
      the
      Company holds the Note; provided,
      however, that Notes held, directly or indirectly, by the Company or its
      Affiliates shall not be deemed outstanding for purposes of the third paragraph
      of Section 5 of the Notes.

     

    If
      a Note
      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
      Note is held by a protected purchaser (as defined in Section 8-303 of the
      Uniform Commercial Code).

     

    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 Notes (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 Noteholders on that date pursuant
      to
      the terms of this Indenture, then
      on
      and after that date such Notes (or portions thereof) cease to be outstanding
      and
      interest on them ceases to accrue.

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    SECTION
      2.09. Treasury
      Notes.
      In
      determining whether the Holders of the required principal amount of Notes have
      concurred in any direction, waiver or consent, Notes owned by the Company or
      any
      Subsidiary Guarantor, or by any Person directly or indirectly controlling or
      controlled by or under direct or indirect common control with the Company or
      any
      Subsidiary Guarantor, will be considered as though not outstanding, except
      that
      for the purposes of determining whether the Trustee will be protected in relying
      on any such direction, waiver or consent, only Notes that the Trustee knows
      are
      so owned will be so disregarded.

     

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

     

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

     

    SECTION
      2.12. Defaulted
      Interest.
      If the
      Company defaults in a payment of interest on the Notes, the Company shall pay
      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 Noteholders on a subsequent special record date. The Company
      shall fix or cause to be fixed any such special record date and payment date
      to
      the reasonable satisfaction of the Trustee and shall promptly mail to each
      Noteholder a notice that states the special record date, the payment date and
      the amount of defaulted interest to be paid.

     

    SECTION
      2.13. CUSIP
      Numbers, ISINs, etc.  The
      Company in issuing the Notes may use “CUSIP” numbers, ISINs and “Common Code”
numbers (in each case if then generally in use) and, if so, the Trustee shall
      use “CUSIP” numbers, ISINs and “Common Code” 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 Notes or as contained in any notice
      of
      a redemption and that reliance may be placed only on the other identification
      numbers printed on the Notes, and any such redemption shall not be affected
      by
      any defect in or omission of such numbers. The Company shall advise the Trustee
      in writing of any change in any “CUSIP” numbers, ISINs or “Common Code” numbers
      applicable to the Notes.

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    SECTION
      2.14. Issuance
      of Additional Notes.
      After
      the Issue Date, the Company shall be entitled, subject to its compliance with
      Section 4.03, to issue Additional Notes under this Indenture, which
      Additional Notes shall have identical terms as the Initial Notes issued on
      the
      Issue Date, other than with respect to the date of issuance and issue price.
      All
      the Notes issued under this Indenture shall be treated as a single class for
      all
      purposes of this Indenture including waivers, amendments, redemptions and offers
      to purchase.

     

    With
      respect to any Additional Notes, the Company shall set forth in a resolution
      of
      the Board of Directors and an Officers’ Certificate, a copy of each which shall
      be delivered to the Trustee, the following information:

     

    (1) 
      the
      aggregate principal amount of such Additional Notes to be authenticated and
      delivered pursuant to this Indenture and the provision of Section 4.03 that
      the
      Company is relying on to issue such Additional Notes;

     

    (2) 
      the
      issue price, the issue date and the CUSIP number of such Additional Notes;
      provided,
      however,
      that no
      Additional Notes may be issued at a price that would cause such Additional
      Notes
      to have “original issue discount” within the meaning of Section 1273 of the
      Code; and

     

    (3) 
      whether
      such Additional Notes shall be Initial Notes or shall be issued in the form
      of
      Exchange Notes as set forth in Exhibit 2.

     

    ARTICLE
      THREE

     

    Redemption

     

    SECTION
      3.01. Notices
      to Trustee.
      If the
      Company elects to redeem Notes pursuant to paragraph 5 of the Notes, it
      shall notify the Trustee in writing of the redemption date, the principal amount
      of Notes to be redeemed and the paragraph of the Notes pursuant to which the
      redemption will occur. The Notes are also subject to mandatory redemption as
      provided in Section 3.07 and paragraph 8 of the Notes.

     

    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 to a
      shorter period. Such notice shall be accompanied by an Officers’ Certificate
      from the Company to the effect that such redemption will comply with the
      conditions herein.

     

    SECTION
      3.02. Selection
      of Notes to Be Redeemed.
      If fewer
      than all the Notes are to be redeemed, the Trustee shall select the Notes to
      be
      redeemed pro rata to the extent practicable. The Trustee shall make the
      selection from outstanding Notes not previously called for redemption. The
      Trustee may select for redemption portions of the principal of Notes that have
      denominations larger than $2,000. Notes and portions of them the Trustee selects
      shall be in principal amounts of $2,000 or a whole multiple of $1,000 in excess
      of $2,000. Provisions of this Indenture that apply to Notes called
      for

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    redemption
      also apply to portions of Notes called for redemption. The Trustee shall notify
      the Company promptly of the Notes or portions of Notes to be
      redeemed.

     

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

     

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

     

    (1) 
      the
      redemption date;

     

    (2) 
      the
      redemption price;

     

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

     

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

     

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

     

    (6) 
      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 Notes (or portion thereof) called for redemption ceases
      to accrue on and after the redemption date;

     

    (7) 
      the
“CUSIP” number, ISIN or “Common Code” number, if any, printed on the Notes being
      redeemed; and

     

    (8) 
      that no
      representation is made as to the correctness or accuracy of the “CUSIP” number,
      ISIN, or “Common Code” number, if any, listed in such notice or printed on the
      Notes.

     

    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, Notes 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 Notes shall be paid at the redemption
      price stated in the notice, plus accrued interest to the redemption date
      (subject to the right of Holders of record on the relevant record date to
      receive interest due on the related interest payment date), and such Notes
      shall
      be canceled by the Trustee. 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.

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    SECTION
      3.05. Deposit
      of Redemption Price.
      Prior to
      the redemption date, the Company shall deposit with the Paying Agent (or, if
      the
      Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
      money sufficient to pay the redemption price of and accrued interest on all
      Notes to be redeemed on that date other than Notes or portions of Notes called
      for redemption which have been delivered by the Company to the Trustee for
      cancellation.

     

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

     

    SECTION
      3.07. Escrow
      of Proceeds; Special Mandatory Redemption.

     

    (a)   The
      Company shall deposit with the Escrow Agent the gross proceeds from the sale
      of
      the Initial Notes plus an amount in cash such that the escrowed funds are in
      an
      amount sufficient to redeem, on the latest possible redemption date pursuant
      to
      the procedures set forth in the Escrow Agreement, in cash the Notes at a
      redemption price equal to 100.00% of the aggregate principal amount of the
      Notes, plus accrued and unpaid interest on the Notes to such redemption date
      (the “Escrow Funds”).

     

    (b)   The
      Notes
      shall be subject to a special mandatory redemption in the event the conditions
      to the release of the Escrow Funds, in accordance with the Escrow Agreement,
      are
      not met on or prior to July 11, 2007 or the Merger Agreement is terminated
      at
      any time prior thereto. Notwithstanding any other provision of this Article
      Three, if such an event occurs, the Company shall cause the notice of special
      mandatory redemption to be mailed to each Holder no later than the third
      Business Day following July 11, 2007 or following the date the Merger Agreement
      is terminated, as applicable, and the Notes shall be redeemed with the Escrow
      Funds five Business Days following the date of such notice of redemption is
      mailed.

     

    (c)   Failure
      to redeem the Notes when required pursuant to Section 3.07(b) will constitute
      an
      Event of Default with respect to the Notes.

     

    ARTICLE
      FOUR

     

    Covenants

     

    SECTION
      4.01. Payment
      of Notes.
      The
      Company shall promptly pay the principal of and interest on the Notes on the
      dates and in the manner provided in the Notes 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 Noteholders on that date pursuant to the terms of this
      Indenture.

     

    The
      Company shall pay interest on overdue principal at the rate
      specified

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    therefor
      in the Notes, and it shall pay interest on overdue installments of interest
      at
      the same rate to the extent lawful.

     

    SECTION
      4.02. SEC
      Reports.
      So long
      as any Notes are outstanding, the Company shall (i) furnish to the Holders
      or cause the Trustee to furnish to the Holders in each case within the time
      periods that such information would have otherwise been required to have been
      provided to the SEC if the rules and regulations applicable to the filing of
      such information were applicable to the Company and (ii) post on its
      website within 10 Business Days thereafter:

     

    (1) 
      all
      quarterly and annual information that would be required to be contained in
      a
      filing with the SEC on Forms 10-Q and 10-K if the Company were required to
      file
      such Forms, including a “Management’s Discussion and Analysis of Financial
      Condition and Results of Operations” and, with respect to the annual information
      only, a report on the annual financial statements by the Company’s certified
      independent accountants in accordance with the professional standards of the
      American Institute of Certified Public Accountants; and 

     

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

     

    The
      availability of the foregoing materials on the SEC’s EDGAR service shall be
      deemed to satisfy the Company’s delivery obligation. 

     

    The
      Company shall, for so long as any Notes remain outstanding, furnish to the
      Holders and to securities analysts and prospective investors, upon their
      request, the information required to be delivered pursuant to Rule 144A(d)
      (4) under the Securities Act. The Company shall at all times comply with
      Trust Indenture Act Section 314(a). 

     

    SECTION
      4.03. Limitation
      on Indebtedness and Issuance of Preferred Stock. i)The
      Company shall not, and shall not permit any of its Restricted Subsidiaries
      to,
      directly or indirectly, create, incur, issue, assume, guarantee or otherwise
      become directly or indirectly liable, contingently or otherwise, with respect
      to
      (collectively, “incur”)
      any
      Indebtedness (including Acquired Debt) and the Company shall not permit any
      of
      its Restricted Subsidiaries to issue any shares of Preferred Stock; provided,
      however,
      that
      the Company or any of the Subsidiary Guarantors shall be entitled to incur
      Indebtedness (including Acquired Debt) and any of the Subsidiary Guarantors
      shall be entitled to issue Preferred Stock if the Fixed Charge Coverage Ratio
      for the Company’s most recently ended four full fiscal quarters for which
      financial statements are publicly available immediately preceding the date
      on
      which such additional Indebtedness is incurred or such Preferred Stock is issued
      would have been at least 2.0 to 1.0, determined on a pro forma basis (including
      a pro forma application of the net proceeds therefrom), as if the additional
      Indebtedness had been incurred, or Preferred Stock had been issued, as the
      case
      may be, at the beginning of such four-quarter period. 

     

    (b)   Section
      4.03(a) shall not prohibit the incurrence of any or the following items of
      Indebtedness (collectively, “Permitted
      Debt”):
      

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    (1) 
      the
      incurrence by the Company or any Restricted Subsidiary of Indebtedness
      (including letters of credit) under the Senior Credit Facilities; provided,
      however,
      that the
      aggregate amount of all Indebtedness then classified as having been incurred
      in
      reliance upon this clause (1) that remains outstanding under the Senior
      Credit Facilities after giving effect to such incurrence does not exceed $535
      million, less, to the extent a permanent repayment and/or commitment reduction
      is required thereunder as a result of such application, the aggregate amount
      of
      Net Proceeds applied to repayments under the Senior Credit Facilities in
      accordance with Section 4.06; 

     

    (2) 
      the
      incurrence by the Company or any Restricted Subsidiary of Existing Indebtedness;
      

     

    (3) 
      the
      incurrence by the Company and the Subsidiary Guarantors of Indebtedness
      represented by the Notes originally issued on the Issue Date and the related
      Subsidiary Guaranties, and the Exchange Notes and/or Private Exchange Notes
      and
      related Subsidiary Guaranties to be issued pursuant to the Registration Rights
      Agreement in respect thereof; 

     

    (4) 
      the
      incurrence by the Company or any Restricted Subsidiary of Indebtedness
      represented by Capital Lease Obligations, mortgage financings or purchase money
      obligations, in each case incurred for the purpose of financing all or any
      part
      of the purchase price or cost of construction or improvement of property, plant
      or equipment used or useful in the business of the Company or such Restricted
      Subsidiary (whether through the direct purchase of assets or the Capital Stock
      of any Person owning such assets), and Permitted Refinancing Indebtedness in
      respect thereof, in an aggregate principal amount or accreted value, as
      applicable, not to exceed at any time outstanding the greater of
      $40.0 million and 2.0% of Total Assets at the time of any incurrence under
      this clause (4); provided
      further, however,
      that no
      more than $6.0 million of Indebtedness shall be incurred pursuant to this clause
      (4) in any one fiscal year;

     

    (5) 
      the
      incurrence by the Company or any Restricted Subsidiary of Indebtedness or
      Preferred Stock in connection with the acquisition of assets or a new Restricted
      Subsidiary and Permitted Refinancing Indebtedness in respect thereof;
provided,
      however,
      that
      such Indebtedness or Preferred Stock (other than such Permitted Refinancing
      Indebtedness) was incurred by the prior owner of such assets or such Restricted
      Subsidiary prior to such acquisition by the Company or one of its Subsidiaries
      and was not incurred in connection with, or in contemplation of, such
      acquisition by the Company or a Subsidiary of the Company; provided
      further,
      however,
      that
      the principal amount (or accreted value, as applicable) of such Indebtedness
      or
      Preferred Stock, together with any other outstanding Indebtedness and Preferred
      Stock incurred pursuant to this clause (5), does not exceed the sum of (x)
      $25.0 million and (y) the amount, not to exceed $31.0 million, of mortgage
      Indebtedness assumed by the Company and its Restricted Subsidiaries in
      connection with the purchase of the Moffie Portfolio; 

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    (6) 
      Indebtedness arising from agreements of the Company or any Restricted Subsidiary
      providing for indemnification, adjustment of purchase price or similar
      obligations, in each case, incurred or assumed in connection with the
      disposition of any business, asset or Subsidiary, other than guarantees of
      Indebtedness incurred by any Person acquiring all or any portion of such
      business, assets or Subsidiary for the purpose of financing such acquisition;
      provided,
      however,
      that
      (a) such Indebtedness is not reflected on the balance sheet of the Company
      or any Restricted Subsidiary (contingent obligations referred to in a footnote
      or footnotes to financial statements and not otherwise reflected on the balance
      sheet will not be deemed to be reflected on such balance sheet for purposes
      of
      this clause (a)) and (b) the maximum assumable liability in respect of such
      Indebtedness shall at no time exceed the gross proceeds including non-cash
      proceeds (the fair market value of such non-cash proceeds being measured at
      the
      time received and without giving effect to any such subsequent changes in value)
      actually received by the Company or such Restricted Subsidiary in connection
      with such disposition; 

     

    (7) 
      the
      incurrence of Indebtedness of the Clipper Partnerships deemed to occur to the
      extent the Clipper Partnerships become Restricted Subsidiaries arising from
      the
      acquisition by the Company of a majority of the Voting Stock of the Clipper
      Partnerships; provided,
      however,
      that
      the principal amount of such Indebtedness incurred pursuant to this clause
      (7)
      does not exceed $51.0 million;

     

    (8) 
      the
      incurrence by the Company or any Restricted Subsidiary of Permitted Refinancing
      Indebtedness in exchange for, or the net proceeds of which are used to refund,
      refinance, defease or discharge Indebtedness incurred pursuant to
      Section 4.03(a) or clause (2), (3) or (7) above or this clause (8);

     

    (9) 
      the
      incurrence by the Company or any Restricted Subsidiary of intercompany
      Indebtedness between the Company and any Restricted Subsidiary; provided,
      however,
      that:

     

    (a) if
      the
      Company or any Subsidiary Guarantor is the obligor on such Indebtedness and
      the
      payee is not the Company or a Subsidiary Guarantor, such Indebtedness must
      be
      expressly subordinated to the prior payment in full in cash of all Obligations
      with respect to the Notes, in the case of the Company, or the Subsidiary
      Guaranty of such Subsidiary Guarantor, in the case of a Subsidiary Guarantor;
      and 

     

    (b) (i)  any
      subsequent issuance or transfer of Equity Interests that results in any such
      Indebtedness being held by a Person other than the Company or a Restricted
      Subsidiary or (ii) any sale or other transfer of any such Indebtedness to a
      Person that is not either the Company or a Restricted Subsidiary shall be
      deemed, in each case, to constitute an incurrence of such Indebtedness by the
      Company or such Restricted Subsidiary, as the case may be, not permitted by
      this
      clause (9); 

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

                                   
      (10) 
      the
      incurrence by the Company or any Restricted Subsidiary of Hedging Obligations
      incurred in the ordinary course of business; 

     

    (11) the
      guarantee by the Company or a Subsidiary Guarantor of Indebtedness of the
      Company or a Restricted Subsidiary that was permitted to be incurred by another
      provision of this Section 4.03; 

     

    (12) the
      issuance by a Restricted Subsidiary to the Company or any Restricted Subsidiary
      of Preferred Stock; provided,
      however,
      that
      (a) any subsequent issuance or transfer of Equity Interests that results in
      any such Preferred Stock being held by a Person other than the Company or a
      Restricted Subsidiary and (b) any sale or other transfer of any such
      Preferred Stock to a Person that is neither the Company nor a Restricted
      Subsidiary shall be deemed, in each case, to constitute an issuance of such
      Preferred Stock by such Restricted Subsidiary that is not permitted by this
      clause (12); 

     

    (13) the
      incurrence by the Company or any Restricted Subsidiary in respect of workers’
compensation claims, self-insurance obligations, indemnities, bankers’
acceptances, performance, completion and surety bonds or guarantees, and similar
      types of obligations in the ordinary course of business; 

     

    (14) the
      incurrence by the Company or any Restricted Subsidiary of Indebtedness arising
      from the honoring by a bank or other financial institution of a check, draft
      or
      similar instrument inadvertently drawn against insufficient funds, so long
      as
      such Indebtedness is covered within five Business Days; 

     

    (15) the
      incurrence of Indebtedness by the Company or any Subsidiary Guarantor to the
      extent that and for so long as the principal amount of such Indebtedness is
      supported by a letter of credit issued pursuant to the Senior Credit Facilities;
      provided,
      however,
      that
      such letter of credit is permitted to be, and is, issued pursuant to clause
      (1)
      above; and 

     

    (16) the
      incurrence by the Company or any Subsidiary Guarantor of additional
      Indebtedness, in an aggregate principal amount (or accreted value, as
      applicable) at any time outstanding, not to exceed $25.0 million.

     

    For
      purposes of determining compliance with this Section 4.03, in the event
      that an item of proposed Indebtedness meets the criteria of more than one of
      the
      categories of Permitted Debt described in clauses (1) through
      (16) above or is entitled to be incurred pursuant to paragraph (a) of this
      Section 4.03, the Company shall be permitted to classify such item of
      Indebtedness in any manner that complies with this Section 4.03 (except that
      Indebtedness incurred under the Senior Credit Facilities on the Issue Date
      shall
      be deemed to have been incurred pursuant to clause (1) above). In addition,
      the Company may, at any time, at its option change the classification of an
      item
      of Indebtedness or any portion thereof (except for Indebtedness incurred under
      clause (1) above) to any other clause or to the first paragraph hereof;
provided,
      however,
      that
      the Company would be permitted to incur such item of Indebtedness (or portion
      thereof) pursuant to such other

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    clause
      or
      the first paragraph hereof, as the case may be, at such time of
      reclassification. The accrual of interest, the accrual of dividends, the
      accretion or amortization of original issue discount, the payment of interest
      on
      any Indebtedness in the form of additional Indebtedness with the same terms,
      the
      reclassification of preferred stock as Indebtedness due to a change in
      accounting principles, and the payment of dividends on Disqualified Stock in
      the
      form of additional shares of the same class of Disqualified Stock shall not
      be
      deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
      for purposes of this Section 4.03. Notwithstanding any other provision of this
      Section 4.03, the maximum amount of Indebtedness that the Company or any
      Restricted Subsidiary shall be entitled to incur pursuant to this Section 4.03
      shall not be deemed to be exceeded solely as a result of fluctuations in
      exchange rates or currency values.

     

    SECTION
      4.04. Limitation
      on Restricted Payments. ii)The
      Company shall not, and shall not permit any of its Restricted Subsidiaries
      to,
      directly or indirectly: 

     

    (1) 
      declare
      or pay any dividend or make any other payment or distribution on account of
      the
      Company’s or any of its Restricted Subsidiary’s Equity Interests (including any
      payment on such Equity Interests in connection with any merger or consolidation
      involving the Company) or to the direct or indirect holders of the Company’s or
      any of its Restricted Subsidiary’s Equity Interests in their capacity as such
      other than dividends or distributions payable in Qualified Equity Interests
      and
      other than dividends or distributions payable to the Company or a Restricted
      Subsidiary; 

     

    (2) 
      purchase, redeem or otherwise acquire or retire for value (including, in
      connection with any merger or consolidation involving the Company) any Equity
      Interests of the Company or any direct or indirect parent of the Company;

     

    (3) 
      make any
      payment on or with respect to, or purchase, redeem, defease or otherwise acquire
      or retire for value any Indebtedness of the Company or a Subsidiary Guarantor
      that is contractually subordinated to the Notes or the Subsidiary Guaranties,
      except (i) payments of interest or principal at Stated Maturity thereof,
      (ii) payments of interest or principal on or in respect of Indebtedness
      owed to and held by the Company or any Restricted Subsidiary and
      (iii) payments, purchases, redemptions, defeasances or other acquisitions
      or retirements for value in anticipation of satisfying a scheduled maturity,
      sinking fund or amortization or other installment obligation or mandatory
      redemption, in each case, due within one year of the Stated Maturity thereof;
      or

     

    (4) 
      make any
      Restricted Investment; 

     

    (all
      such
      payments and other actions set forth in clauses (1) through (4) above
      being collectively referred to as “Restricted
      Payments”);
      

     

    unless,
      at the time of and after giving effect to such Restricted Payment: 

     

    (1) 
      no
      Default shall have occurred and be continuing or would occur as a consequence
      thereof; 

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    (2) 
      the
      Company would, after giving pro
      forma
      effect
      thereto as if such Restricted Payment had been made at the beginning of the
      applicable four-quarter period, have been permitted to incur at least $1.00
      of
      additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
      forth in Section 4.03(a); and 

     

    (3) 
      such
      Restricted Payment, together with the aggregate amount of all other Restricted
      Payments made by the Company and its Restricted Subsidiaries after the Issue
      Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (6),
      (7) and (8) of Section 4.04(b)), is not greater than the sum,
      without duplication, of: 

     

    (a) 50%
      of
      the Consolidated Net Income of the Company for the period (taken as one
      accounting period) from the beginning of the fiscal quarter in which the Issue
      Date occurs to the end of the Company’s most recently ended fiscal quarter for
      which financial statements are publicly available at the time of such Restricted
      Payment (or, if such Consolidated Net Income for such period is a deficit,
      less
      100% of such deficit); plus 

     

    (b) 100%
      of
      the aggregate net proceeds received by the Company after the Issue Date as
      a
      contribution to its common equity capital or received by the Company from the
      issue or sale after the Issue Date (other than to a Subsidiary of the Company)
      of Qualified Equity Interests or of Disqualified Stock or debt securities of
      the
      Company that have been converted into or exchanged for such Qualified Equity
      Interests; plus 

     

    (c) 100%
      of
      the net proceeds received by the Company by means of (i) the sale or other
      disposition (other than to the Company or a Restricted Subsidiary) of Restricted
      Investments made by the Company and its Restricted Subsidiaries and repurchases
      and redemptions of such Restricted Investments from the Company and its
      Restricted Subsidiaries and repayments of loans or advances which constitute
      Restricted Investments by the Company and its Restricted Subsidiaries in each
      case after the Issue Date or (ii) the sale (other than to the Company or a
      Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary;
      plus

     

    (d) if
      any
      Unrestricted Subsidiary (i) is redesignated as a Restricted Subsidiary, the
      fair market value of such redesignated Unrestricted Subsidiary (as certified
      to
      the Trustee in an Officers’ Certificate) as of the date of its redesignation or
      (ii) pays any cash dividends or cash distributions to the Company or any
      Restricted Subsidiary, 100% of any such dividends or distributions made after
      the Issue Date. 

     

    (b)   Section
      4.04(a) shall not prohibit: 

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    (1) 
      the
      payment of any dividend or distribution or the consummation of any irrevocable
      redemption within 60 days after the date of declaration thereof or giving the
      notice of redemption, as the case may be, if at such date of declaration or
      notice such payment would have complied with the provisions of this Indenture;
      

     

    (2) 
      the
      making of any Restricted Payment in exchange for, or out of the net cash
      proceeds of the substantially concurrent sale or issuance (other than to a
      Subsidiary of the Company) of, Qualified Equity Interests or from the
      substantially concurrent contribution to the common equity capital of the
      Company; provided,
      however,
      that the
      amount of any such net cash proceeds that are utilized for any such Restricted
      Payment shall be excluded from Section 4.04(a)(3)(b) and shall not be
      applied to permit the payment of any other Restricted Payment; 

     

    (3) 
      the
      defeasance, redemption, repurchase, repayment or other acquisition of
      subordinated Indebtedness of the Company or any Restricted Subsidiaries with
      the
      net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
      

     

    (4) 
      the
      payment of any dividend (or in the case of any partnership or limited liability
      company, any similar distribution) by a Restricted Subsidiary to the holders
      of
      its Equity Interests on a pro rata basis, taking into account the relative
      preferences, if any, of the various classes of equity interests in such
      Restricted Subsidiary; 

     

    (5) 
      the
      repurchase, redemption or other acquisition or retirement for value (or the
      distribution of amounts to any other direct or indirect parent of the Company
      to
      fund any such repurchase, redemption or other acquisition or retirement) of
      any
      Equity Interests of the Company or any direct or indirect parent of the Company
      held by any current or former officer, director, consultant or employee of
      the
      Company or any Restricted Subsidiary (or any permitted transferees, assigns,
      estates or heirs of any of the foregoing); provided,
      however,
      the
      aggregate amount paid by the Company and its Restricted Subsidiaries pursuant
      to
      this clause (5) shall not exceed $5.0 million in any calendar year
      (excluding for purposes of calculating such amount the amount paid for Equity
      Interests repurchased, redeemed, acquired or retired with the proceeds from
      the
      repayment of outstanding loans previously made by the Company or a Restricted
      Subsidiary for the purpose of financing the acquisition of such Equity
      Interests), with unused amounts in any calendar year being carried over for
      one
      additional calendar year; provided further,
      however,
      that
      such amount in any calendar year may be increased by an amount not to exceed:
      

     

    (A) the
      net
      cash proceeds from the sale of Qualified Equity Interests of the Company, in
      each case, to members of management, directors or consultants of the Company
      or
      any of its Subsidiaries that occurs after the Issue Date, to the extent such
      cash proceeds have not

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

                otherwise
      been and
      are not thereafter applied to permit the payment of any other Restricted
      Payment; plus 

     

    (B) the
      cash
      proceeds of key man life insurance policies received by the Company and its
      Restricted Subsidiaries after the Issue Date; less 

     

    (C) the
      amount of any Restricted Payments previously made pursuant to clauses
      (A) and (B) of this clause (5); 

     

    provided further,
      however,
      that
      cancellation of Indebtedness owing to the Company from members of management
      of
      the Company or any Restricted Subsidiary in connection with a repurchase of
      Equity Interests of the Company shall not be deemed to constitute a Restricted
      Payment for purposes of this Indenture;

     

    (6) 
      the
      declaration and payment of dividends on Disqualified Stock in accordance with
      the certificate of designations therefor; provided,
      however,
      that
      such issuance of Disqualified Stock is permitted by Section 4.03;

     

    (7) 
      repurchases of Equity Interests deemed to occur upon the exercise of stock
      options or warrants or upon the vesting of restricted stock units to the extent
      that such Equity Interests represent a portion of the exercise price thereof
      or
      related income tax liability; 

     

    (8) 
      payments
      made to purchase, redeem, defease or otherwise acquire or retire for value
      any
      Equity Interests of the Company or any Restricted Subsidiary or any Subordinated
      Obligations of the Company or a Subsidiary Guarantor (other than Equity
      Interests or Subordinated Obligations issued to or at any time held by an
      Affiliate of any such Person), in each case, pursuant to provisions requiring
      such Person to offer to purchase, redeem, defease or otherwise acquire or retire
      for value such Equity Interests or Subordinated Obligations upon the occurrence
      of a Change of Control or with the proceeds of Asset Sales as defined in the
      charter provisions, agreements or instruments governing such Equity Interests
      or
      Subordinated Obligations; provided,
      however,
      that a
      Change of Control Offer or Asset Sale Offer, as applicable, has been made and
      the Company has purchased all Notes validly tendered in connection with that
      Change of Control Offer or Asset Sale Offer; and 

     

    (9) 
      other
      Restricted Payments in an aggregate amount up to $15.0 million;

     

    provided,
      however,
      that, in
      the case of clause (9), no Default shall have occurred and be continuing or
      would occur as a consequence of the making of the Restricted Payment
      contemplated thereby. 

     

    (c)   The
      amount of all Restricted Payments (other than cash) shall be the fair market
      value on the date of the Restricted Payment of the assets or securities proposed
      to be transferred or issued by the Company or such Restricted Subsidiary, as
      the
      case may be, pursuant to the Restricted Payment. The fair market value of any
      assets or

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    securities
      that are required to be valued by this Section 4.04 shall be determined in
      good
      faith by the Board of Directors of the Company.

     

    SECTION
      4.05. Dividend
      and Other Payment Restrictions Affecting Restricted
      Subsidiaries. iii)The
      Company shall not, and shall not permit its Restricted Subsidiaries to, directly
      or indirectly, create or permit to exist or become effective any consensual
      encumbrance or restriction on the ability of any Restricted Subsidiary
      to: 

     

    (1) 
      pay
      dividends or make any other distributions to the Company or any Restricted
      Subsidiary (i) on its Capital Stock or (ii) with respect to any other
      interest or participation in, or measured by, its profits; 

     

    (2) 
      pay any
      Indebtedness owed to the Company or any Restricted Subsidiary; 

     

    (3) 
      make
      loans or advances to the Company or any Restricted Subsidiary; or 

     

    (4) 
      transfer
      any of its properties or assets to the Company or any Restricted Subsidiary.
      

     

    (b)   However,
      Section 4.05(a) shall not prohibit encumbrances or restrictions existing under
      or by reason of: 

     

    (1) 
      Existing
      Indebtedness, the Senior Credit Facilities and any other Permitted Debt as
      in
      effect as of the Issue Date, and any amendments, modifications, restatements,
      renewals, increases, supplements, refundings, replacements or refinancings,
      of
      any thereof; provided,
      however,
      that
      such amendments, modifications, restatements, renewals, increases, supplements,
      refundings, replacements or refinancings are not, taken as a whole, materially
      more restrictive with respect to such dividend and other payment restrictions
      than those contained in those agreements as in effect on the Issue Date;

     

    (2) 
      this
      Indenture, the Notes, the Subsidiary Guaranties, the Exchange Notes or the
      Registration Rights Agreement; 

     

    (3) 
      any
      applicable law, rule, regulation or order; 

     

    (4) 
      any
      instrument or agreement of a Person acquired by the Company or any Restricted
      Subsidiary as in effect at the time of such acquisition (except to the extent
      incurred in connection with or in contemplation of such acquisition), which
      encumbrance or restriction is not applicable to any Person, or the properties
      or
      assets of any Person, other than the Person, or the property or assets of the
      Person, so acquired; provided,
      however,
      that, in
      the case of Indebtedness, such Indebtedness was permitted by the terms of this
      Indenture to be incurred; 

     

    (5) 
      customary non-assignment provisions in contracts, leases and licenses entered
      into in the ordinary course of business; 

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    (6) 
      purchase
      money obligations for property acquired in the ordinary course of business
      and
      Capital Lease Obligations that impose restrictions on the property so acquired
      or leased of the nature described in Section 4.05(a)(4); 

     

    (7) 
      secured
      Indebtedness otherwise permitted under this Indenture, the terms of which limit
      the right of the debtor to dispose of the assets securing such Indebtedness;
      

     

    (8) 
      Permitted Refinancing Indebtedness; provided,
      however,
      that the
      material restrictions contained in the agreements governing such Permitted
      Refinancing Indebtedness are not, taken as a whole, materially more restrictive
      with respect to such dividend and other payment restrictions than those
      contained in the agreements governing the Indebtedness being Refinanced;

     

    (9) 
      any
      agreement for the sale or other disposition of a Restricted Subsidiary or an
      asset that restricts distributions by such Restricted Subsidiary or transfers
      of
      such asset pending the sale or other disposition; 

     

    (10) Liens
      permitted to be incurred by Section 4.11 that limit the right of the debtor
      to
      dispose of the assets subject to such Liens; 

     

    (11) provisions
      limiting the disposition, dividend or distribution of assets or property in
      joint venture agreements, partnership agreements, limited liability company
      operating agreements, asset sale agreements, sale-leaseback agreements, stock
      or
      equity sale agreements and other similar agreements, which limitation is
      applicable only to the assets or property that are the subject of such
      agreements; and 

     

    (12) restrictions
      on cash or other deposits or net worth imposed by customers under contracts
      entered into in the ordinary course of business. 

     

    SECTION
      4.06. Limitation
      on Sales of Assets and Subsidiary Stock. iv)  The
      Company shall not, and shall not permit any of its Restricted Subsidiaries
      to,
      consummate an Asset Sale unless: 

     

    (1) 
      the
      Company (or such Restricted Subsidiary, as the case may be) receives
      consideration at the time of such Asset Sale at least equal to the fair market
      value of the assets or Equity Interests issued or sold or otherwise disposed
      of;
      and 

     

    (2) 
      at least
      75% of the consideration received therefor by the Company (or such Restricted
      Subsidiary, as the case may be) is in the form of cash or Cash Equivalents.
      

     

    For
      purposes of this provision, each of the following shall be deemed to be cash:
      

     

    (A) any
      liabilities of the Company or any Restricted Subsidiary (as shown on the most
      recent consolidated balance sheet of the Company and

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    its
      Restricted Subsidiaries other than contingent liabilities and liabilities that
      are by their terms subordinated to the Notes or any Subsidiary Guaranty) that
      are assumed by the transferee of any such assets pursuant to an agreement that
      releases the Company or any such Restricted Subsidiary from further liability
      with respect to such liabilities; 

     

    (B) any
      securities, notes or other obligations received by the Company or any such
      Restricted Subsidiary from such transferee that are converted by the Company
      or
      such Restricted Subsidiary into cash or Cash Equivalents within 180 days (to
      the
      extent of the cash or Cash Equivalents received in that conversion);

     

    (C) any
      stock
      or assets of the kind referred to in Section 4.06(b)(2) or (4); and

     

    (D) any
      Designated Non-cash Consideration received by the Company or any Restricted
      Subsidiary in such Asset Sale having an aggregate fair market value, taken
      together with all other Designated Non-cash Consideration received pursuant
      to
      this clause (D) that is at that time outstanding, not to exceed $15.0
      million at the time of receipt of such Designated Non-cash Consideration, with
      the fair market value of each item of Designated Non-cash Consideration being
      measured at the time received and without giving effect to subsequent changes
      in
      value.

     

    (b)   Within
      365 days after the receipt of any Net Proceeds from an Asset Sale, the Company
      or any such Restricted Subsidiary shall be entitled to apply such Net Proceeds,
      at its option: 

     

    (1) 
      to repay
      or repurchase Senior Indebtedness of the Company or any Subsidiary Guarantor
      or
      any Indebtedness of any Restricted Subsidiary that is not a Subsidiary
      Guarantor; 

     

    (2) 
      to make
      an Investment in (provided such Investment is in the form of Capital Stock),
      or
      to acquire all or substantially all of the assets of, a Person engaged in a
      Permitted Business if such Person is, or will become as a result thereof, a
      Restricted Subsidiary; 

     

         (3)
      to
      fund all or a portion of an optional redemption of the Notes in accordance
      with
      Article Three and paragraph 5 of the Notes;

     

    (4)
      to
      make a capital expenditure; or 

     

    (5)
      to
      acquire long lived assets (other than securities) to be used in a Permitted
      Business. 

     

    Pending
      the final application of any such Net Proceeds, the Company shall be entitled
      to
      temporarily reduce the revolving Indebtedness under the Senior Credit Facilities
      or otherwise invest such Net Proceeds in any manner that is not prohibited
      by
      this Indenture.

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

                The
      sale, lease,
      conveyance or other disposition of all or substantially all of the assets of
      the
      Company and its Restricted Subsidiaries taken as a whole will be governed by
      the
      provisions of Sections 4.10 and 5.01 and not by the provisions of this
      Section 4.06.

     

    (c)   Any
      Net
      Proceeds from Asset Sales that are not applied or invested as provided in
      Section 4.06(b) will constitute “Excess Proceeds.” When the aggregate amount of
      Excess Proceeds exceeds $10.0 million, the Company will be required to make
      an offer to purchase from all Holders (an “Asset
      Sale Offer”)
      and,
      if applicable, redeem or purchase (or make an offer to do so) any other Senior
      Subordinated Indebtedness of the Company, the provisions of which require the
      Company to redeem or purchase (or make an offer to do so) such Indebtedness
      with
      the proceeds from any Asset Sales, the maximum aggregate principal amount of
      Notes and such other Senior Subordinated Indebtedness that may be purchased
      (on
      a pro rata basis) with such Excess Proceeds. The offer price for the Notes
      in
      any Asset Sale Offer will be equal to 100% of principal amount plus accrued
      and
      unpaid interest, if any, to the date of purchase, and will be payable in cash
      and the redemption or purchase price for such other Senior Subordinated
      Indebtedness shall be as set forth in the related documentation governing such
      Indebtedness. If any Excess Proceeds remain after consummation of an Asset
      Sale
      Offer, the Company shall be entitled to use such Excess Proceeds for any purpose
      not prohibited by the Indenture. If the aggregate purchase price of the Notes
      and the other Senior Subordinated Indebtedness tendered into such Asset Sale
      Offer exceeds the amount of Excess Proceeds, the Company shall select the Notes
      to be purchased on a pro rata basis but in round denominations, which in the
      case of the Notes will be denominations of $2,000 initial principal amount
      and
      multiples of $1,000 thereafter. Upon completion of each Asset Sale Offer, the
      amount of Excess Proceeds related to such Asset Sale Offer shall be reset at
      zero.

     

    (d)   (1)  Promptly,
      and in any event within 10 days after the Company becomes obligated to make
      an Asset Sale Offer, the Company shall 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 Notes purchased by the Company either in whole or in part
      (subject to prorating as described in paragraph (c) of this
      Section 4.06 in the event the Asset Sale Offer is oversubscribed) in a
      minimum amount of $2,000 or in larger 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 will include (A) 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 Sales otherwise described in the offering materials (or corresponding
      successor reports), (B) a description of material developments in the
      Company’s business subsequent to the date of the latest of such Reports, and
      (C) if material, appropriate pro forma

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    financial
      information) and all instructions and materials necessary to tender Notes
      pursuant to the Asset Sale Offer, together with the information contained in
      clause (3).

     

    (2) 
      Not
      later than the date upon which written notice of an Asset Sale Offer is
      delivered to the Trustee as provided above, the Company shall deliver to the
      Trustee an Officers’ Certificate as to (A) the amount of the Asset Sale
      Offer (the “Offer
      Amount”),
      including information as to any other Senior Subordinated Indebtedness included
      in the Asset Sale Offer, (B) the allocation of the Net Available Cash from
      the Asset Sale pursuant to which such Asset Sale Offer is being made and
      (C) the compliance of such allocation with the provisions of this
      Section 4.06. No later than the Purchase Date, the Company shall also
      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 to be held for payment in accordance with the provisions
      of
      this Section. If the Asset Sale Offer includes other Senior Subordinated
      Indebtedness, the deposit described in the preceding sentence may be made with
      any other paying agent pursuant to arrangements satisfactory to the Trustee.
      Upon the expiration of the period for which the Asset Sale Offer remains open
      (the “Offer
      Period”),
      the
      Company shall deliver to the Trustee for cancellation the Notes or portions
      thereof which have been properly tendered to and are to be accepted by the
      Company. The Trustee shall, on the Purchase Date, mail or deliver payment (or
      cause the delivery of payment) to each tendering Holder in the amount of the
      purchase price. In the event that the aggregate purchase price of the Notes
      delivered by the Company to the Trustee is less than the Offer Amount applicable
      to the Notes, the Trustee shall deliver the excess to the Company immediately
      after the expiration of the Offer Period for application in accordance with
      this
      Section 4.06.

     

    (3) 
      Holders
      electing to have a Note purchased shall be required to surrender the Note,
      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 telex,
      facsimile transmission or letter setting forth the name of the Holder, the
      principal amount of the Note which was delivered for purchase by the Holder
      and
      a statement that such Holder is withdrawing his election to have such Note
      purchased. Holders whose Notes are purchased only in part shall be issued new
      Notes equal in principal amount to the unpurchased portion of the Notes
      surrendered.

     

    (4) 
      At the
      time the Company delivers Notes to the Trustee which are to be accepted for
      purchase, the Company shall also deliver an Officers’ Certificate stating that
      such Notes are to be accepted by the Company pursuant to and in accordance
      with
      the terms of this Section. A Note 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.

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    (e)   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 Notes pursuant to this
      Section 4.06. To the extent that the provisions of any securities laws or
      regulations conflict with provisions of this Section 4.06, the Company
      shall comply with the applicable securities laws and regulations and shall
      not
      be deemed to have breached its obligations under this Section 4.06 by
      virtue of its compliance with such securities laws or regulations.

     

    SECTION
      4.07. Limitation
      on Affiliate Transactions. v)  The
      Company shall not, and shall not permit any of its Restricted Subsidiaries
      to,
      make any payment to, or sell, lease, transfer or otherwise dispose of any of
      its
      properties or assets to, or purchase any property or assets from, or enter
      into
      or make or amend any transaction, contract, agreement, understanding, loan,
      advance or guarantee with, or for the benefit of, any of its Affiliates (each,
      an “Affiliate Transaction”), unless: 

     

    (1) 
      such
      Affiliate Transaction is on terms that are not materially less favorable to
      the
      Company or such Restricted Subsidiary than those that would have been obtained
      in a comparable transaction by the Company or such Restricted Subsidiary with
      an
      unrelated Person; and 

     

    (2) 
      the
      Company delivers to the Trustee: 

     

    (a) with
      respect to any Affiliate Transaction or series of related Affiliate Transactions
      involving aggregate consideration in excess of $5.0 million, a resolution
      of the Board of Directors of the Company and an Officers’ Certificate certifying
      that such Affiliate Transaction complies with clause (1) above and that
      such Affiliate Transaction has been approved by a majority of the disinterested
      members of such Board of Directors; and 

     

    (b) with
      respect to any Affiliate Transaction or series of related Affiliate Transactions
      involving aggregate consideration in excess of $25.0 million, an opinion as
      to the fairness to the Holders of such Affiliate Transaction from a financial
      point of view issued by an accounting, appraisal or investment banking firm
      of
      national standing.

     

    (b)   The
      following items shall not be deemed to be Affiliate Transactions and, therefore,
      shall not be subject to Section 4.07(a): 

     

    (1) 
      transactions between or among the Company and its Restricted Subsidiaries;
      

     

    (2) 
      any
      Restricted Payment that is permitted by Section 4.04; 

     

    (3) 
      employment agreements, severance agreements, loans, advances, fees, benefits
      and
      compensation paid or provided to, and indemnity provided on behalf of, officers,
      directors, employees or consultants of the Company or any
      Subsidiary;

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    (4) 
      transactions pursuant to any contract or agreement in effect on the Issue Date
      or entered into prior to the time (and not in anticipation of) the Person
      becomes an Affiliate as the same may be amended, modified or replaced from
      time
      to time so long as any such amendment, modification or replacement, taken as
      a
      whole, is no less favorable in any material respect to the Company or such
      Restricted Subsidiary than the contract or agreement as in effect on the Issue
      Date; 

     

    (5) 
      transactions with a Person (other than an Unrestricted Subsidiary) that is
      an
      Affiliate of the Company solely because the Company owns, directly or through
      a
      Restricted Subsidiary, an Equity Interest in, or controls, such Person;

     

    (6) 
      the
      issuance or sale of Qualified Equity Interests (and the exercise of any
      warrants, options or other rights to acquire Qualified Equity Interests);

     

    (7) 
      loans or
      advances to employees of the Company or any Restricted Subsidiary (x) in
      the ordinary course of business or (y) in connection with the purchase by
      such Persons of Equity Interests of the Company; and 

     

    (8) 
      transactions with customers, clients, suppliers or purchasers or sellers of
      goods or services, in each case in the ordinary course of business and otherwise
      in compliance with the terms of this Indenture that are on terms no less
      favorable than those that would have been obtained in a comparable transaction
      with an unrelated party or on terms that are approved by the Board of Directors
      of the Company, including a majority of the disinterested
      directors.

     

    SECTION
      4.08. Limitation
      on Line of Business. The
      Company shall not, and shall not permit any Restricted Subsidiary to, engage
      in
      any business other than a Permitted Business, except to such extent as would
      not
      be material to the Company and their Restricted Subsidiaries taken as a
      whole. 

     

    SECTION
      4.09. Designation
      of Restricted and Unrestricted Subsidiaries.
      The
      Board of Directors of the Company shall be entitled to designate any Restricted
      Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
      a Default and the conditions set forth in the definition of “Unrestricted
      Subsidiary” are met. If a Restricted Subsidiary is designated as an Unrestricted
      Subsidiary, all outstanding Investments owned by the Company and its Restricted
      Subsidiaries (except to the extent repaid in cash or Cash Equivalents) in the
      Subsidiary so designated shall be deemed to be Restricted Payments at the time
      of such designation and shall reduce the amount available for Restricted
      Payments pursuant to Section 4.04 or under one or more of the clauses of the
      definition of Permitted Investments, as determined by the Company. All such
      outstanding Investments shall be valued at their fair market value at the time
      of such designation, as certified to the Trustee in an Officers’ Certificate.
      That designation shall only be permitted if such Restricted Payment would be
      permitted at that time and if such Restricted Subsidiary otherwise meets the
      definition of an Unrestricted Subsidiary.

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

              SECTION
      4.10. Change
      of Control. vi)If
      a
      Change of Control occurs, each Holder will have the right to require the Company
      to repurchase all or any part (in a minimum amount of $2,000 and $1,000 integral
      multiples thereof) of that Holder’s Notes pursuant to the Change of Control
      Offer (as defined below). In the Change of Control Offer, the Company shall
      offer a payment in cash equal to 101% of the aggregate principal amount of
      Notes
      repurchased plus accrued and unpaid interest thereon, if any, to the date of
      purchase (the “Change
      of Control Payment”).
      Within 60 days following any Change of Control, the Company shall mail a notice
      (the “Change
      of Control Offer”)
      to
      each Holder describing the transaction or transactions that constitute the
      Change of Control and offering to repurchase Notes on a date (the “Change
      of Control Payment Date”)
      no
      earlier than 30 days and no later than 60 days from the date the notice is
      mailed, other than as may be required by law, pursuant to the procedures
      required by this Indenture and described in such notice. The Company shall
      comply with the requirements of Rule 14e-1 under the Exchange Act and any other
      securities laws and regulations thereunder to the extent such laws and
      regulations are applicable in connection with the repurchase of the Notes as
      a
      result of a Change of Control. To the extent that the provisions of any
      securities laws or regulations conflict with the provisions of this Indenture
      relating to such Change of Control Offer, the Company shall comply with the
      applicable securities laws and regulations and shall not be deemed to have
      breached its obligations in this Section 4.10 by virtue thereof.

     

    (b)   On
      the
      Change of Control Payment Date, the Company shall, to the extent lawful:

     

    (1) 
      accept
      for payment all Notes or portions thereof in minimum amounts equal to $2,000
      or
      an integral multiple of $1,000 in excess thereof properly tendered pursuant
      to
      the Change of Control Offer; 

     

    (2) 
      deposit
      with the Paying Agent an amount equal to the Change of Control Payment in
      respect of all Notes or portions thereof so tendered; and 

     

    (3) 
      deliver
      or cause to be delivered to the Trustee the Notes so accepted together with
      an
      Officers’ Certificate stating the aggregate principal amount of Notes or
      portions thereof being purchased by the Company.

     

    (c)   Holders
      electing to have a Note purchased shall be required to surrender the Note,
      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 Note which was delivered for purchase by the Holder
      and a statement that such Holder is withdrawing his election to have such Note
      purchased.

     

    (d)   The
      Paying Agent shall promptly mail to each Holder of Notes so tendered the Change
      of Control Payment for such Notes, and the Trustee shall promptly authenticate
      and mail (or cause to be transferred by book entry) to each Holder a new

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    Note
      equal in principal amount to any unpurchased portion of the Notes surrendered,
      if any; provided,
      however,
      that
      each such new Note shall be in a principal amount of $2,000 or any greater
      amount in multiples of $1,000.

     

    (e)   Notwithstanding
      this Section 4.10, 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 this Section 4.10 applicable to a Change of Control
      Offer made by the Company and purchases all Notes validly tendered and not
      withdrawn under such Change of Control Offer or if notice of redemption has
      been
      given pursuant to Section 3.03.

     

    (f)   If
      making
      a Change Of Control Payment would violate any outstanding Senior Indebtedness
      of
      the Company, prior to complying with any of the provisions of
      this Section 4.10, but in any event within 90 days following a Change
      of Control, the Company shall either repay such Senior Indebtedness or obtain
      the requisite consents under the agreements governing such Senior Indebtedness
      to permit the repurchase of Notes required by this Section 4.10. The
      Company shall publicly announce the results of the Change of Control Offer
      on or
      as soon as practicable after the Change of Control Payment Date

     

    SECTION
      4.11. Limitation
      on Liens.  The
      Company shall not, and shall not permit any Restricted Subsidiary to, create,
      incur, assume or otherwise cause or suffer to exist or become effective any
      Lien
      of any kind securing Indebtedness (other than (x) Senior Indebtedness of the
      Company or a Subsidiary Guarantor or (y) any Indebtedness of a Restricted
      Subsidiary that is not a Subsidiary Guarantor) upon any of their property or
      assets, now owned or hereafter acquired unless: 

     

    (1) 
      in the
      case of Liens securing Subordinated Obligations of the Company or a Subsidiary
      Guarantor, the notes or the Subsidiary Guaranties, as applicable, are secured
      on
      a senior basis to the obligations so secured until such time as such obligations
      are no longer secured by a Lien; and 

     

    (2) 
      in the
      case of Liens securing Senior Subordinated Indebtedness of the Company or a
      Subsidiary Guarantor, the notes or the Subsidiary Guaranties, as applicable,
      are
      secured on an equal and ratable basis with the obligations so secured until
      such
      time as such obligations are no longer secured by a Lien.

     

    SECTION
      4.12. Limitation
      on Other Senior Subordinated Indebtedness.
      The
      Company shall not, and shall not permit its Subsidiary Guarantors to, incur,
      create, issue, assume, guarantee or otherwise become liable for any Indebtedness
      that is both: 

     

    (1) 
      subordinate in right of payment to any Senior Indebtedness; and 

     

    (2) 
      senior
      in right of payment to the Notes or any Subsidiary Guaranty. 

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    Neither
      the existence nor lack of a security interest nor the priority of any such
      security interest shall be deemed to affect the ranking or right of payment
      of
      any Indebtedness. 

     

    SECTION
      4.13. Future
      Guaranties.
      The
      Company shall not permit any Domestic Restricted Subsidiary, directly or
      indirectly, to incur Indebtedness, or guarantee or pledge any assets to secure
      the payment of any other Indebtedness of the Company or any Restricted
      Subsidiary or issue any Preferred Stock, unless: 

     

    (1) 
      such
      Indebtedness is incurred by such Restricted Subsidiary pursuant to clause (2),
      (4), (5), (6), (8) (with respect to Permitted Refinancing Indebtedness in
      respect of Indebtedness initially incurred under clause (2) or (4) only),
      (9), (10), (12), (13) or (14) of Section 4.03(b); 

     

    (2) 
      such
      Restricted Subsidiary is a Subsidiary Guarantor; or 

     

    (3) 
      such
      Restricted Subsidiary simultaneously executes and delivers a Guaranty Agreement
      and becomes a Subsidiary Guarantor, which guarantee shall (a) with respect
      to the incurrence of Senior Indebtedness, be subordinated in right of payment
      on
      the same terms as the Notes are subordinated to such Senior Indebtedness and
      (b) with respect to the incurrence of any other Indebtedness or the
      issuance of Preferred Stock, be senior to or pari
      passu
      with
      such Restricted Subsidiary’s other Indebtedness or guarantee of or pledge to
      secure such other Indebtedness. 

     

    SECTION
      4.14. 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 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 status and what action the Company
      is taking or proposes to take with respect thereto. 

     

    ARTICLE
      FIVE

     

    Successor
      Company

     

    SECTION
      5.01. When
      Company May Merge or Transfer Assets. vii)  The
      Company shall not: (1) consolidate or merge with or into another Person
      (whether or not the Company is the surviving corporation); or (2) sell,
      assign, transfer, convey or otherwise dispose of all or substantially all of
      its
      properties or assets, in one or more related transactions, to another Person
      unless: 

     

    (1) 
      either
      (a) the Company is the surviving corporation or (b) the Person formed
      by or surviving any such consolidation or merger (if other than the Company)
      or
      to which such sale, assignment, transfer, conveyance or other disposition shall
      have been made is a corporation, limited liability company or

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    partnership
      organized or existing under the laws of the United States, any State thereof
      or
      the District of Columbia; provided,
      however,
      that if
      such Person is a limited liability company or partnership, a corporate
      Wholly-Owned Subsidiary of such Person organized under the laws of the United
      States, any state thereof or the District of Columbia becomes a co-issuer of
      the
      Notes in connection therewith; 

     

    (2) 
      the
      entity or Person formed by or surviving any such consolidation or merger (if
      other than the Company) or the entity or Person to which such sale, assignment,
      transfer, conveyance or other disposition shall have been made assumes all
      the
      obligations of the Company under the Notes and this Indenture pursuant to a
      supplemental indenture in a form reasonably satisfactory to the Trustee;

     

    (3) 
      immediately after such transaction no Default exists; 

     

    (4) 
      (a) the Company or the entity or Person formed by or surviving any such
      consolidation or merger (if other than the Company), or to which such sale,
      assignment, transfer, conveyance or other disposition shall have been made
      will,
      after giving pro forma effect thereto as if such transaction had occurred at
      the
      beginning of the applicable four-quarter period, be permitted to incur at least
      $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
      test set forth in Section 4.03(a) or (b) the Fixed Charge Coverage
      Ratio of the Company or the Person formed by or surviving any such
      consolidation, amalgamation or merger (if other than the Company), or to which
      such sale, assignment, transfer, conveyance or other disposition has been made,
      after giving effect to the transaction and any related financings, would not
      be
      less than the Fixed Charge Coverage Ratio of the Company immediately prior
      to
      such transaction; and 

     

    (5) 
      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
      preceding clause (4) shall not prohibit: 

     

    (a) a
      merger
      between the Company and a Restricted Subsidiary or between Restricted
      Subsidiaries; or 

     

    (b) a
      merger
      between the Company and an Affiliate incorporated solely for the purpose of
      reincorporating the Company in another state of the United States. 

     

    In
      addition, the Company shall not, directly or indirectly, lease all or
      substantially all of its properties or assets, in one or more related
      transactions, to any other Person. This Section 5.01 will not be applicable
      to a sale, assignment, transfer, conveyance or other disposition of assets
      between or among the Company and any of its Restricted Subsidiaries.

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

              (b)   The
      Company shall not permit any Subsidiary Guarantor to consolidate with or merge
      with or into, or convey, transfer or lease, in one transaction or a series
      of
      transactions, all or substantially all of its assets to any Person (other than
      pursuant to the Merger) unless: 

     

    (1) 
      the
      resulting, surviving or transferee Person (if not such Subsidiary) shall be
      a
      Person organized and existing under the laws of the jurisdiction under which
      such Subsidiary was organized or under the laws of the United States of America,
      or any State thereof or the District of Columbia, and such Person shall
      expressly assume, by a Guaranty Agreement, all the obligations of such
      Subsidiary, if any, under its Subsidiary Guaranty; provided,
      however,
      that
      the foregoing requirement shall not apply in the case of a Subsidiary Guarantor
      or all or substantially all of its assets (x) that has been disposed of in
      its entirety to another Person (other than to the Company or an Affiliate of
      the
      Company), whether through a merger, consolidation or sale of Capital Stock
      or
      assets or (y) that, as a result of the disposition of all or a portion of
      its Capital Stock, ceases to be a Subsidiary, so long as, in both cases, if
      in
      connection therewith the Company provides an Officers’ Certificate to the
      Trustee to the effect that the Company will comply with its obligations under
      Section 4.06; 

     

    (2) 
      immediately after giving effect to such transaction or transactions on a pro
      forma basis (and treating any Indebtedness which becomes an obligation of the
      resulting, surviving or transferee Person as a result of such transaction as
      having been issued by such Person at the time of such transaction), no Default
      shall have occurred and be continuing; and 

     

    (3) 
      the
      Company delivers to the Trustee an Officers’ Certificate and an Opinion of
      Counsel, each stating that such consolidation, merger or transfer and such
      Guaranty Agreement, if any, complies with this Indenture. 

     

    The
      preceding clause (2) shall not prohibit any Subsidiary Guarantor that is a
      limited liability company from merging with an Affiliate solely for the purpose
      of reincorporating such Subsidiary Guarantor as a corporation.

     

    ARTICLE
      SIX

     

    Defaults
      and Remedies

     

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

     

    (1) 
      the
      Company defaults in any payment of interest on any Note when the same becomes
      due and payable, whether
      or not such payment shall be prohibited by Article Ten, and
      such
      default continues for a period of 30 days;

     

    (2) 
      the
      Company (A) defaults in the payment of the principal of any Note when the
      same becomes due and payable at its Stated Maturity, upon optional redemption,
      upon declaration of acceleration or otherwise, whether
      or not such 

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    payment
      shall be prohibited by Article Ten or
      (B) fails to redeem or purchase Notes when required pursuant to this
      Indenture or the Notes,
      whether
      or not such redemption or purchase shall be prohibited by
      Article Ten;

     

    (3) 
      the
      Company fails to comply with its obligations under Section 3.07,
      Section 4.10 or Section 5.01(a), or the Company fails to comply with
      its obligations under the Escrow Agreement;

     

    (4) 
      the
      Company fails to comply with Section 4.03,
      4.04 or 4.06 and
      such
      failure continues for 30 days after the notice specified
      below;

     

    (5) 
      the
      Company or
      any
      Subsidiary Guarantor fails
      to
      comply with any of its agreements contained in the Notes or
      this
      Indenture (other than those referred to in clause (1), (2), (3) or (4)
      above) and such failure continues for 90 days after the notice specified
      below;

     

    (6) 
      Indebtedness of the Company, any
      Subsidiary Guarantor or
      any
      Significant Subsidiary is not paid within any applicable grace period after
      final maturity or is accelerated by the holders thereof because of a default
      and
      the total amount of such Indebtedness unpaid or accelerated exceeds $15.0
      million, or its foreign currency equivalent at the time;

     

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

     

    (A) commences
      a voluntary case;

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
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    or
      any
      similar relief is granted under any foreign laws and the order or decree, as
      described under this Section (8), remains unstayed and in effect for
      60 consecutive days after such judgment becomes final and unappealable;

     

    (9) 
      any
      judgment or decree is rendered for the payment of money in an amount, net of
      any
      insurance or indemnity payments actually received in respect thereof prior
      to or
      within 60 days from the entry thereof, or to be received in respect thereof
      in
      the event any appeal thereof shall be unsuccessful, in excess of $15.0 million
      against the Company or any Significant Subsidiary that is not discharged, bonded
      or insured by a third Person if either an enforcement proceeding thereon is
      commenced, or such judgment or decree remains outstanding for a period of
      60 days after such judgment becomes final and non-appealable and is not
      discharged, waived or stayed; or

     

    (10) except
      as
      permitted by this Indenture, any Subsidiary Guaranty ceases to be in full force
      and effect (other than in accordance with the terms of such Subsidiary Guaranty)
      or any Subsidiary Guarantor denies or disaffirms its obligations under its
      Subsidiary Guaranty.

     

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

     

    A
      Default
      under clauses (4) or (5) is not an Event of Default until the Trustee or the
      holders of at least 25% in principal amount of the outstanding Notes notify
      the
      Company of the Default and the Company does not cure such Default within the
      time specified after receipt of such notice. Such notice must specify the
      Default, demand that it be remedied and state that such notice is a “Notice of
      Default”.

     

    The
      Company shall deliver to the Trustee, within 30 days after the occurrence
      thereof, written notice in the form of an Officers’ Certificate of any Event of
      Default under clause (6) or (10) and any event which with the giving of
      notice or the lapse of time would become an Event of Default under
      clause (4), (5) or (9), 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 occurs and is continuing, the Trustee or the Holders of at
      least 25% in principal amount of the outstanding Notes may declare the principal
      of and accrued but unpaid interest on all the Notes to be due and payable.
      Upon
      such a declaration, such principal and interest shall be due and payable
      immediately; provided,
      however,
      that so
      long as any Indebtedness permitted to be incurred pursuant to the Senior Credit
      Facilities is outstanding, such acceleration will not be effective until the
      earlier of (1) the acceleration of such Indebtedness under the Senior
      Credit Facilities or (2) five Business Days after receipt by the Company of
      written notice of such acceleration. If an Event of Default specified in
      Section 6.01(7) or (8) with respect to the Company occurs and is
      continuing, the principal of and interest on all of the outstanding Notes will
      ipso
      facto
      become
      and be immediately due and payable without any declaration or other act on
      the
      part of the Trustee or any Holders.

    
      
        
        

      

      
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              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 Notes or to
      enforce the performance of any provision of the Notes or this
      Indenture.

     

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

     

    SECTION
      6.04. Waiver
      of Past Defaults.
      The
      Holders of a majority in aggregate principal amount of the then outstanding
      Notes by notice to the Trustee may, on behalf of the Holders of all of such
      Notes, waive any existing Default and its consequences under this Indenture,
      except a continuing Default in the payment of principal of and premium, if
      any,
      or interest on any such Notes held by a non-consenting Holder.

     

    SECTION
      6.05. Control
      by Majority.
      The
      Holders of a majority in principal amount of the Notes 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.
      Except
      to enforce the right to receive payment of principal, premium (if any) or
      interest when due, no Noteholder may pursue any remedy with respect to this
      Indenture or the Notes unless:

     

    (1) 
      the
      Holder gives to the Trustee written notice stating that an Event of Default
      is
      continuing;

     

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

     

    (3) 
      such
      Holder or Holders offer to the Trustee reasonable security or indemnity against
      any loss, liability or expense;

     

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

    
      
        
        

      

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

     

    A
      Noteholder may not use this Indenture to prejudice the rights of another
      Noteholder or to obtain a preference or priority over another Noteholder. In
      the
      event that the Definitive Notes are not issued to any beneficial owner promptly
      after the Registrar has received a request from the Holder of a Global Note
      to
      issue such Definitive Notes to such beneficial owner or its nominee, the Company
      expressly agrees and acknowledges, with respect to the right of any Holder
      to
      pursue a remedy pursuant to this Indenture, the right of such beneficial holder
      of Notes to pursue such remedy with respect to the portion of the Global Note
      that represents such beneficial holder’s Notes as if such Definitive Notes had
      been issued.

     

    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 Notes held by such
      Holder, on or after the respective due dates expressed in the Notes, 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(1) or (2) occurs and is
      continuing, the Trustee may recover judgment in its own name and as trustee
      of
      an express trust against the Company for the whole amount then due and owing
      (together with interest on any unpaid interest to the extent lawful) and the
      amounts provided for in Section 7.08.

     

    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
      Noteholders allowed in any judicial proceedings relative to the Company, its
      creditors or its property and, unless prohibited by law or applicable
      regulations, may vote on behalf of the Holders in any election of a trustee
      in
      bankruptcy or other Person performing similar functions, and any Custodian
      in
      any such judicial proceeding is hereby authorized by each Holder to make
      payments to the Trustee and, in the event that the Trustee shall consent to
      the
      making of such payments directly to the Holders, 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 7.08.

     

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

     

    FIRST:
      to
      the Trustee for amounts due under Section 7.08;

     

    SECOND:
      to holders of Senior Indebtedness of the Company
      and, if such money or property has been collected from a Subsidiary Guarantor,
      to holders of Senior Indebtedness of such Subsidiary Guarantor, in each case
      to
      the extent required by Articles Ten and Twelve;

    
      
        
        

      

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

     

    FOURTH:
      to the Company.

     

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

     

    SECTION
      6.11. Undertaking
      for Costs.
      In any
      suit for the enforcement of any right or remedy under this Indenture or in
      any
      suit against the Trustee for any action taken or omitted by it as Trustee,
      a
      court in its discretion may require the filing by any party litigant in the
      suit
      of an undertaking to pay the costs of the suit, and the court in its discretion
      may assess reasonable costs, including reasonable attorneys’ fees, 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 aggregate principal amount of the
      Notes.

     

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

     

    ARTICLE
      SEVEN

     

    Trustee

     

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

     

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

       

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

    

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

    (2) 
      in the
      absence of bad faith on its part, the Trustee may conclusively rely, as to
      the
      truth of the statements and the correctness of the opinions expressed therein,
      upon certificates or opinions furnished to the Trustee and conforming to the
      requirements of this Indenture. However, the Trustee shall examine the
      certificates and opinions to determine whether or not they conform to the
      requirements of this Indenture.

     

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

     

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

     

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

     

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

     

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

     

    (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)   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.

     

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

     

    SECTION
      7.02. Notice
      of Defaults.
      If a
      Default or Event of Default occurs and is continuing and if it is known to
      the
      Trustee, the Trustee shall transmit, in the manner and to the extent provided
      in
      TIA Section 313(c), notice of such Default or Event of Default within 90 days
      after it occurs unless such Default or Event of Default shall have been cured
      or
      waived. Except in the case of a Default or Event of Default in the payment
      of
      the principal of (or premium, if any, on) or interest on any Note (including
      payments pursuant to the mandatory redemption provisions of such Note, if any),
      the Trustee shall be protected in withholding such notice if it determines
      that
      the withholding of such notice is in the interest of the Holders.

    
      
        
        

      

      
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    SECTION
      7.03. Rights
      of Trustee. ix)  The
      Trustee may rely on any document believed by it to be genuine and to have been
      signed or presented by the proper person. The Trustee need not investigate
      any
      fact or matter stated in the document.

     

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

     

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

     

    (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 wilful misconduct or
      negligence.

     

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

     

    SECTION
      7.04. Individual
      Rights of Trustee.
      The
      Trustee in its individual or any other capacity may become the owner or pledgee
      of Notes and may otherwise deal with the Company or its Affiliates with the
      same
      rights it would have if it were not Trustee. Any Paying Agent, Registrar,
      co-registrar or co-paying agent may do the same with like rights. However,
      the
      Trustee must comply with Sections 7.11 and 7.12.

     

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

     

    SECTION
      7.06. Reserved. 

     

    SECTION
      7.07. 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
      of
      each year, the Trustee shall mail to each Noteholder
      a brief report dated as of such May 15 that complies with TIA § 313(a). The
      Trustee also shall comply with TIA § 313(b).
       

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

        
          
            
            

          

          
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    SECTION
      7.08. Compensation
      and Indemnity.
      The
      Company shall pay to the Trustee from time to time reasonable compensation
      for
      its services. The Trustee’s compensation shall not be limited by any law on
      compensation of a trustee of an express trust. The Company shall reimburse
      the
      Trustee upon request for all reasonable out-of-pocket expenses incurred or
      made
      by it, including costs of collection, in addition to the compensation for its
      services. Such expenses shall include the reasonable compensation and expenses,
      disbursements and advances of the Trustee’s agents, counsel, accountants and
      experts. The Company shall indemnify the Trustee against any and all loss,
      liability or expense (including attorneys’ fees) incurred by it in connection
      with the administration of this trust and the performance of its duties
      hereunder. The Trustee shall notify the Company promptly of any claim for which
      it may seek indemnity. Failure by the Trustee to so notify the Company shall
      not
      relieve the Company of its obligations hereunder. The Company shall defend
      the
      claim and the Trustee may have separate counsel and the Company shall pay the
      fees and expenses of such counsel. The Company need not reimburse any expense
      or
      indemnify against any loss, liability or expense incurred by the Trustee through
      the Trustee’s own wilful misconduct, negligence or bad faith.

     

    To
      secure
      the Company’s payment obligations in this Section, the Trustee shall have a lien
      prior to the Notes 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 Notes.

     

    The
      Company’s payment obligations pursuant to this Section shall survive the
      discharge of this Indenture. When the Trustee incurs expenses after the
      occurrence of a Default specified in Section 6.01(a)(7) or (8) with respect
      to the Company, the expenses are intended to constitute expenses of
      administration under the Bankruptcy Law.

     

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

     

    (1) 
      the
      Trustee fails to comply with Section 7.11;

     

    (2) 
      the
      Trustee is adjudged bankrupt or insolvent;

     

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

     

    (4) 
      the
      Trustee otherwise becomes incapable of acting.

     

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

    

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

    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 Noteholders. 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
      7.08.

     

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

     

    If
      the
      Trustee fails to comply with Section 7.11, any Noteholder may petition any
      court
      of competent jurisdiction for the removal of the Trustee and the appointment
      of
      a successor Trustee.

     

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

     

    SECTION
      7.10. 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
      Notes 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 Notes so authenticated; and in case at that time any of the
      Notes shall not have been authenticated, any successor to the Trustee may
      authenticate such Notes 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 Notes or
      in
      this Indenture provided that the certificate of the Trustee shall
      have.

     

    SECTION
      7.11. Eligibility;
      Disqualification.
      The
      Trustee shall at all times satisfy the requirements of TIA § 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 § 310(b); provided,
      however,
      that
      there shall be excluded from the operation of TIA § 310(b)(1) any
      indenture or indentures under which other securities or certificates of interest
      or participation in other securities of the Company are outstanding if the
      requirements for such exclusion set forth in TIA § 310(b)(1) are
      met.

    
      
        
        

      

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

     

    ARTICLE
      EIGHT

     

    Discharge
      of Indenture; Defeasance

     

    SECTION
      8.01. Discharge
      of Liability on Notes; Defeasance. x)  When
      (1) the Company delivers to the Trustee all outstanding Notes (other than
      Notes replaced pursuant to Section 2.07) for cancellation or (2) all
      outstanding Notes have become due and payable, whether at maturity or on a
      redemption date as a result of the mailing of a notice of redemption pursuant
      to
      Article Three, or will become due and payable within one year, and the
      Company irrevocably deposits with the Trustee funds sufficient to pay at
      maturity or upon redemption all outstanding Notes, including interest thereon
      to
      maturity or such redemption date (other than Notes replaced pursuant to Section
      2.07), and if in either case the Company pays all other sums payable hereunder
      by the Company, then this Indenture shall, subject to Section 8.01(c),
      cease to be of further effect. The Trustee shall acknowledge satisfaction and
      discharge of this Indenture on demand of the Company accompanied by an Officers’
Certificate and an Opinion of Counsel and at the cost and expense of the
      Company.

     

    (b)   Subject
      to Section 8.01(c) and Section 8.02, the Company at any time may terminate
      (1) all its obligations under the Notes and this Indenture (“legal
      defeasance option”) or (2) its obligations under Sections 4.02, 4.03,
      4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13 and the operation
      of clauses (3) (but only with respect to Section 4.10), (4), (5), (6),
      (7), (8) and (9) of Section 6.01 (but, in the case of clauses (7) and (8),
      with
      respect only to Significant Subsidiaries) and the limitations contained in
      Section 5.01(a)(4) (“covenant defeasance option”). The Company may exercise
      its legal defeasance option notwithstanding its prior exercise of its covenant
      defeasance option.

     

    If
      the
      Company exercises its legal defeasance option, payment of the Notes may not
      be
      accelerated because of an Event of Default with respect thereto. If the Company
      exercises its covenant defeasance option, payment of the Notes may not be
      accelerated because of an Event of Default specified in clauses (3) (but
      only with respect to Section 4.10), (4), (5), (6), (7), (8) and (9) of
      Section 6.01 (but, in the case of clauses (7) and (8), with respect only to
      Significant Subsidiaries) or because of the failure of the Company to comply
      with Section 5.01(a)(4). If the Company exercises its legal defeasance
      option or its covenant defeasance option, each Subsidiary Guarantor, if any,
      shall be released from all its obligations with respect to its Subsidiary
      Guaranty.

     

    
      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.

    

    
      
        
        

      

      
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    (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, 7.08 and 7.09 and in this Article Eight shall
      survive until the Notes have been paid in full. Thereafter, the Company’s
      obligations in Sections 7.08, 8.04 and 8.05 shall survive.

     

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

     

    (1) 
      the
      Company irrevocably deposits in trust with the Trustee money or U.S.
      Government Obligations for the payment of principal of and interest on the
      Notes
      to maturity or redemption, as the case may be;

     

    (2) 
      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 and interest when due on all the Notes to maturity
      or redemption, as the case may be;

     

    (3) 
      91 days pass after the deposit is made and during the 91-day period no
      Default specified in Sections 6.01(7) or (8) with respect to the Company
      occurs which is continuing at the end of the period;

     

    (4) 
      the
      deposit does not constitute a default under any other agreement binding on
      the
      Company and is not prohibited by Article Ten;

     

    (5) 
      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;

     

    (6) 
      in the
      case of the legal defeasance option, the Company shall have delivered to the
      Trustee an Opinion of Counsel stating that (A) the Company has received
      from, or there has been published by, the Internal Revenue Service a ruling,
      or
      (B) since the date of this Indenture there has been a change in the
      applicable Federal income tax law, in either case to the effect that, and based
      thereon such Opinion of Counsel shall confirm that, the Noteholders will not
      recognize income, gain or loss for Federal income tax purposes as a result
      of
      such defeasance and will be subject to Federal income tax on the same amounts,
      in the same manner and at the same times as would have been the case if such
      defeasance had not occurred;

     

    (7) 
      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 Noteholders will not
      recognize income, gain or loss for Federal income tax purposes as a result
      of
      such covenant defeasance and will be subject to Federal income tax on the same
      amounts, in the same manner and at the same times as would have been the case
      if
      such covenant defeasance had not occurred; and

    
      
        
        

      

      
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         (8) 
      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 Notes as contemplated by this Article Eight have been complied
      with.

     

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

     

    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 Eight. 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 Notes. Money and securities so held in trust are not subject to Article
      Ten.

     

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

     

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

     

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

     

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

    
      
        
        

      

      
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    ARTICLE
      NINE

     

    Amendments

     

    SECTION
      9.01. Without
      Consent of Holders.
      The
      Company, the
      Subsidiary Guarantors and
      the
      Trustee are entitled to amend this Indenture or the Notes without notice to
      or
      consent of any Noteholder:

     

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

     

    (2) 
      to
      comply with Article Five;

     

    (3) 
      to
      provide for uncertificated Notes in addition to or in place of certificated
      Notes; provided,
      however,
      that
      the uncertificated Notes are issued in registered form for purposes of
      Section 163(f) of the Code or in a manner such that the uncertificated
      Notes are described in Section 163(f)(2)(B) of the Code;

     

    (4) 
      to add
      guarantees with respect to the Notes, including
      any Subsidiary Guaranties, or to secure the Notes;

     

    (5) 
      to add
      to the covenants of the Company or
      a
      Subsidiary Guarantor for
      the
      benefit of the Holders or to surrender any right or power herein conferred
      upon
      the Company or
      a
      Subsidiary Guarantor;

     

    (6) 
      to make
      any change that does not adversely affect the rights of any
      Noteholder;

     

    (7) 
      to
      comply with any requirement of the SEC in order to effect or maintain the
      qualification of this Indenture under the TIA; 

     

    (8) 
      to make
      any amendment to the provisions of this Indenture relating to the transfer
      and
      legending of Notes; provided,
      however,
      that
      (a) compliance with this Indenture as so amended would not result in Notes
      being transferred in violation of the Securities Act or any other applicable
      securities law and (b) such amendment does not materially and adversely
      affect the rights of Holders to transfer Notes;

     

    (9) 
      to
      conform the text of this Indenture, the Subsidiary Guaranties or the Notes
      to
      any provision set forth in the offering circular, dated March 22, 2007 relating
      to the Notes, under the heading “Description of Notes”
      to the
      extent that such provision as set forth in such offering circular was intended
      to be a verbatim recitation of a provision in this Indenture, the Subsidiary
      Guaranties or the Notes; or

     

    
      (10) to
        provide for the issuance of Additional Notes in accordance with the limitations
        set forth in this Indenture as of the date of this Indenture.

      
        
          
            
            

          

          
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    An
      amendment under this Section shall not make any change that adversely affects
      the rights under Article Ten or Twelve of any holder of Senior Indebtedness
      of
      the Company or of a Subsidiary Guarantor then outstanding unless the holders
      of
      such Senior Indebtedness (or their Representative) consent to such
      change.

     

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

     

    SECTION
      9.02. With
      Consent of Holders.
      The
      Company, the Subsidiary Guarantors and the Trustee shall be entitled to amend
      this Indenture or the Notes with the written consent of the Holders of at least
      a majority in principal amount of the Notes then outstanding (including consents
      obtained in connection with a tender offer or exchange for the Notes) and any
      past or existing Default or compliance with any provisions may also be waived
      with the consent of the Holders of at least a majority in principal amount
      of
      the Notes then outstanding. However, without the consent of each Holder affected
      thereby, an amendment or waiver shall not:

     

    (1) 
      reduce
      the principal amount of Notes whose Holders must consent to an
      amendment;

     

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

     

    (3) 
      reduce
      the principal of or change the Stated Maturity of any Note;

     

    (4) 
      reduce
      the amount payable upon the redemption of any Note or change the time at which
      any Note may be redeemed, in each case as contained in Article Three or
      paragraph 5 of the Notes;

     

    (5) 
      make any
      Note payable in money other than that stated in the Note;

     

    (6) 
      make any
      change in Section 6.04 or 6.07 or the second sentence of this
      Section;

     

    (7) 
      make any
      changes in the ranking or priority of any Note that would adversely affect
      the
      Holders;

     

    (8) 
      make any
      change in, or release other than in accordance with this Indenture, any
      Subsidiary Guaranty that would adversely affect the Holders; 

     

    (9) 
      change
      the provisions applicable to the redemption of any Note as described under
      Section 3.07 or paragraph 8 of the Notes; or

     

    
      (10) make
        any
        change in the Escrow Agreement that would adversely affect the Noteholders
        (it
        being understood that the Company and the Trustee 
        
          
            
            

          

          
            65

            
              

            

          

          
            
            

          

        
may, without notice to or consent of any Noteholder,
        make any change in
        the Escrow Agreement that would not adversely affect the
        Noteholders).

    

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

     

    An
      amendment under this Section shall not make any change that adversely affects
      the rights under Article Ten or Twelve of any holder of Senior Indebtedness
      of
      the Company or of a Subsidiary Guarantor then outstanding unless the holders
      of
      such Senior Indebtedness (or any group or representative thereof authorized
      to
      give a consent) consent to such change.

     

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

     

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

     

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

     

    The
      Company shall be entitled to, but shall not be obligated to, fix a record date
      for the purpose of determining the Noteholders 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 Noteholders 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 Notes.
      If an
      amendment changes the terms of a Note, the Trustee shall be entitled to require
      the Holder of the Note to deliver it to the Trustee. The Trustee shall be
      entitled to place an appropriate notation on the Note regarding the changed
      terms and return it to the Holder. Alternatively, if the Company or the Trustee
      so determines, the Company in exchange for 

    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    

    the
      Note
      shall issue and the Trustee shall authenticate a new Note that reflects the
      changed terms. Failure to make the appropriate notation or to issue a new Note
      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 Nine 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 to receive, and (subject to Section 7.01)
      shall be fully protected in relying upon, an Officers’ Certificate and an
      Opinion of Counsel stating that such amendment is authorized or permitted by
      this Indenture.

     

    SECTION
      9.07. Payment
      for Consent.
      Neither
      the Company nor any Affiliate of the Company shall, directly or indirectly,
      pay
      or cause to be paid any consideration, whether by way of interest, fee or
      otherwise, to any Holder for or as an inducement to any consent, waiver or
      amendment of any of the terms or provisions of this Indenture or the Notes
      unless such consideration is offered to all Holders and is paid to all Holders
      that so consent, waive or agree to amend in the time frame set forth in
      solicitation documents relating to such consent, waiver or
      agreement.

     

    ARTICLE
      TEN

     

    Subordination

     

    SECTION
      10.01. Agreement
      To Subordinate.
      The
      Company agrees, and each Noteholder by accepting a Note agrees, that the
      Indebtedness evidenced by the Notes is subordinated in right of payment, to
      the
      extent and in the manner provided in this Article Ten, to the prior payment
      in
      full in cash or Cash Equivalents 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 Notes shall in all respects rank pari passu
      with all
      other Senior Subordinated Indebtedness of the Company and only Indebtedness
      of
      the Company which is Senior Indebtedness of the Company shall rank senior to
      the
      Notes in accordance with the provisions set forth herein. All provisions of
      this
      Article Ten shall be subject to Section 10.12.

     

    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:

     

    (1) 
      holders
      of Senior Indebtedness of the Company shall be entitled to receive payment
      in
      full in cash or Cash Equivalents of such Senior Indebtedness before Noteholders
      shall be entitled to receive any payment of principal of or interest on the
      Notes; and

    
      
        
        

      

      
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    (2) 
      until
      such Senior Indebtedness is paid in full in cash or Cash Equivalents, any
      payment or distribution to which Noteholders would be entitled but for this
      Article Ten shall be made to holders of such Senior Indebtedness as their
      interests may appear, except that Noteholders may receive and retain Permitted
      Junior Securities and payments from either of the trusts described in Article
      Eight.

     

    SECTION
      10.03. Default
      on Senior Indebtedness of
      the
      Company.
      The
      Company shall not pay the principal of or interest on the Notes or make any
      deposit pursuant to Section 8.01 and shall not purchase, redeem or otherwise
      retire any Notes (collectively, “pay
      the Notes”)
      (except that Noteholders may receive and retain Permitted Junior Securities
      and
      payments made from funds deposited with the Trustee pursuant to Section 8.01
      or
      8.02) if either of the following (a “Payment
      Default”)
      occurs
      (a) any Obligation on any Designated Senior Debt of the Company is not paid
      in full in cash or Cash Equivalents when due; or (b) any other default on
      Designated Senior Debt of the Company occurs and the maturity of such Designated
      Senior Debt is accelerated in accordance with its terms unless, in either case,
      the Payment Default has been cured or waived and any such acceleration has
      been
      rescinded or such Designated Senior Debt has been paid in full in cash;
provided,
      however,
      that
      the Company shall be entitled to pay the Notes without regard to the foregoing
      if the Company and the Trustee receive written notice approving such payment
      from the Representatives of all Designated Senior Debt with respect to which
      a
      Payment Default has occurred and is continuing. During the continuance of any
      default (other than a Payment Default) with respect to any Designated Senior
      Debt 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 shall not pay the Notes for a period (a “Payment
      Blockage Period”)
      commencing upon the receipt by the Trustee of (with a copy to the Company)
      written notice (a “Blockage
      Notice”)
      of
      such default from the Representative of such Designated Senior Debt specifying
      an election to effect a Payment Blockage Period and ending 179 days
      thereafter. The Payment Blockage Period shall end earlier if such Payment
      Blockage Period is terminated (1) by written notice to the Trustee and the
      Company from the Person or Persons who gave such Blockage Notice;
      (2) because the default giving rise to such Blockage Notice is cured,
      waived or otherwise no longer continuing; or (3) because such Designated Senior
      Debt has been discharged or repaid in full in cash. Notwithstanding the
      provisions described in the immediately preceding two sentences (but subject
      to
      the provisions contained in the first sentence of this Section), unless the
      holders of such Designated Senior Debt or the Representative of such Designated
      Senior Debt shall have accelerated the maturity of such Designated Senior Debt,
      the Company shall be entitled to resume payments on the Notes after termination
      of such Payment Blockage Period. The Notes shall not be subject to more than
      one
      Payment Blockage Period in any consecutive 360-day period, irrespective of
      the
      number of defaults with respect to Designated Senior Debt of the Company during
      such period.  For
      purposes of this Section, no nonpayment default or event of default which
      existed or was continuing on the date of the commencement of any Payment
      Blockage Period with respect to the Designated Senior Debt of the Company
      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

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

    Designated
      Senior Debt 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 Notes.
      If
      payment of the Notes is accelerated because of an Event of Default, the Company
      or the Trustee shall promptly notify the holders of the Designated Senior Debt
      of the Company (or their Representatives) of the acceleration. If any Designated
      Senior Debt of the Company is outstanding, neither the Company nor any
      Subsidiary Guarantor shall pay the Notes until five Business Days after the
      Representatives of all the issues of such Designated Senior Debt receive notice
      of such acceleration and, thereafter, shall be entitled to pay the Notes only
      if
      this Article Ten otherwise permits payment at that time.

     

    SECTION
      10.05. When
      Distribution Must Be Paid Over.
      If a
      distribution is made to Noteholders that because of this Article Ten should
      not
      have been made to them, the Noteholders who receive the distribution shall
      hold
      it 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 in cash or Cash
      Equivalents and until the Notes are paid in full, Noteholders shall be
      subrogated to the rights of holders of such Senior Indebtedness to receive
      distributions applicable to such Senior Indebtedness to the extent that the
      distributions otherwise payable to the Noteholders have been applied to the
      payment of Senior Indebtedness. A distribution made under this Article Ten
      to
      holders of such Senior Indebtedness which otherwise would have been made to
      Noteholders is not, as between the Company and Noteholders, a payment by the
      Company on such Senior Indebtedness.

     

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

     

    (1) 
      impair,
      as between the Company and Noteholders, the obligation of the Company, which
      is
      absolute and unconditional, to pay principal of and interest on the Notes in
      accordance with their terms; or

     

    (2) 
      prevent
      the Trustee or any Noteholder from exercising its available remedies upon a
      Default, subject to the rights of holders of Senior Indebtedness of the Company
      to receive distributions and payments otherwise payable to
      Noteholders.

     

    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 Notes 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 shall continue to
      make payments on the Notes

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

    unless
      the Trustee or Paying Agent has actual knowledge of the existence of facts
      that
      under this Article Ten would prohibit the making of any such payments or unless,
      not less than two Business Days prior to the date of such payment, a Trust
      Officer of the Trustee receives notice satisfactory to it that such payments
      are
      prohibited by this Article Ten; provided,
      however,
      that
      the subordination of the Notes to Senior Indebtedness shall not be affected
      and
      the Noteholders receiving any payments in contravention of this Article Ten
      shall otherwise be subject to this Article Ten. The Company, the Registrar
      or co-registrar, the Paying Agent, a Representative or a holder of Senior
      Indebtedness of the Company shall be entitled to give the notice; provided,
      however,
      that,
      if an issue of Senior Indebtedness of the Company has a Representative, only
      the
      Representative shall be entitled to give the notice.

     

    The
      Trustee in its individual or any other capacity shall be entitled to hold Senior
      Indebtedness of the Company with the same rights it would have if it were not
      Trustee. The Registrar and co-registrar and the Paying Agent shall be entitled
      to do the same with like rights. The Trustee shall be entitled to all the rights
      set forth in this Article Ten 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 Seven shall deprive
      the Trustee of any of its rights as such holder. Nothing in this Article Ten
      shall apply to claims of, or payments to, the Trustee under or pursuant to
      Section 7.08.

     

    SECTION
      10.10. Distribution
      or Notice to Representative.
      Whenever
      any Person is to make a distribution or give a notice to holders of Senior
      Indebtedness of the Company such Person shall be entitled to make such
      distribution or give such notice to their Representative (if any).

     

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

     

    SECTION
      10.12. Trust
      Moneys 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
      Eight by the Trustee for the payment of principal of and interest on the Notes
      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 Ten, and none
      of the Noteholders 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 Ten, the Trustee and the
      Noteholders 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

    
      
        
        

      

      
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    the
      Trustee or to the Noteholders or (c) upon the Representatives 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 Ten. 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 Ten, the Trustee shall
      be entitled to 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 Ten, and, if such evidence is not furnished, the Trustee
      shall be entitled to 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 7.03 shall be applicable to all actions or
      omissions of actions by the Trustee pursuant to this Article Ten.

     

    SECTION
      10.14. Trustee
      To Effectuate Subordination.
      Each
      Noteholder by accepting a Note authorizes and directs the Trustee on his behalf
      to take such action as may be necessary or appropriate to acknowledge or
      effectuate the subordination between the Noteholders and the holders of Senior
      Indebtedness of the Company as provided in this Article Ten 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
      of
      the Company.
      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 Noteholders 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 Ten or
      otherwise.

     

    SECTION
      10.16. Reliance
      by Holders of Senior Indebtedness of
      the
      Company
      on
      Subordination Provisions.
      Each
      Noteholder by accepting a Note 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 Notes, 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
      ELEVEN

     

    Subsidiary
      Guaranties

     

    SECTION
      11.01. Guaranties.
      Subject
      to this Article Eleven and Article Twelve, each Subsidiary Guarantor hereby
      unconditionally and irrevocably guarantees,

    
      
        
        

      

      
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    jointly
      and severally, to each Holder and to the Trustee and its successors and assigns
      (a) the full and punctual payment of principal of and interest on the Notes
      when due, whether at maturity, by acceleration, by redemption or otherwise,
      and
      all other monetary obligations of the Company under this Indenture and the
      Notes
      and (b) the full and punctual performance within applicable grace periods
      of all other obligations of the Company under this Indenture and the Notes
      (all
      the foregoing being hereinafter collectively called the “Guaranteed
      Obligations”).
      Each
      Subsidiary Guarantor further agrees that the Guaranteed Obligations may be
      extended or renewed, in whole or in part, without notice or further assent
      from
      such Subsidiary Guarantor and that such Subsidiary Guarantor will remain bound
      under this Article Eleven notwithstanding any extension or renewal of any
      Guaranteed Obligation.

     

    Each
      Subsidiary Guarantor waives, to the fullest extent permitted by law,
      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 Subsidiary Guarantor waives notice of any default under the Notes or the
      Guaranteed Obligations. The obligations of each Subsidiary Guarantor hereunder
      shall not be affected, to the fullest extent permitted by law, by (1) 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 (including any
      Subsidiary Guarantor) under
      this Indenture, the Notes or any other agreement or otherwise; (2) any
      extension or renewal of any thereof; (3) any rescission, waiver, amendment
      or modification of any of the terms or provisions of this Indenture, the Notes
      or any other agreement; (4) the release of any security held by any Holder
      or the Trustee for the Guaranteed Obligations or any of them; (5) the
      failure of any Holder or the Trustee to exercise any right or remedy against
      any
      other guarantor of the Guaranteed Obligations; or (6) except as set forth
      in Section 11.06, any change in the ownership of such Subsidiary
      Guarantor.

     

    Each
      Subsidiary Guarantor further agrees that its Subsidiary Guaranty 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.

     

    Each
      Subsidiary Guaranty is, to the extent and in the manner set forth in
      Article Twelve, 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 Subsidiary Guarantor giving such Subsidiary Guaranty
      and each Subsidiary Guaranty is made subject to such provisions of this
      Indenture.

     

    Except
      as
      expressly set forth in Sections 8.01(b), 11.02 and 11.06, to the fullest
      extent permitted by law, the obligations of each Subsidiary 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 unenforceability of the Guaranteed Obligations or otherwise. Without limiting
      the generality of the foregoing, to the fullest

    
      
        
        

      

      
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    extent
      permitted by law, the obligations of each Subsidiary 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 Notes 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 such Subsidiary Guarantor or would otherwise operate
      as
      a discharge of such Subsidiary Guarantor as a matter of law or
      equity.

     

    Each
      Subsidiary Guarantor further agrees that its Guarantee herein shall 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 Obligation is rescinded
      or
      must otherwise be restored by any Holder or the Trustee upon the bankruptcy
      or
      reorganization of the Company or otherwise.

     

    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 Subsidiary 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 Subsidiary 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 (A) the unpaid amount of such Guaranteed Obligations, and
      (B) accrued and unpaid interest on such Guaranteed Obligations (but only to
      the extent not prohibited by law).

     

    Each
      Subsidiary Guarantor shall not be entitled to any right of subrogation in
      respect of any Guaranteed Obligations guaranteed hereby until payment in full
      in
      cash or Cash Equivalents of all Guaranteed Obligations and all obligations
      to
      which the Guaranteed Obligations are subordinated as provided in
      Article Twelve. Each Subsidiary Guarantor further agrees that, as between
      it, on the one hand, and the Holders and the Trustee, on the other hand,
      (i) the maturity of the Guaranteed Obligations hereby may be accelerated as
      provided in Article Six for the purposes of such Subsidiary Guarantor’s
      Subsidiary Guaranty 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 Six,
      such Guaranteed Obligations (whether or not due and payable) shall forthwith
      become due and payable by such Subsidiary Guarantor for the purposes of this
      Section.

     

    Each
      Subsidiary Guarantor shall pay any and all costs and expenses (including
      reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing
      any rights under this Section.

     

    SECTION
      11.02. Limitation
      on Liability.
      Any term
      or provision of this Indenture to the contrary notwithstanding, (i) the maximum
      aggregate amount of the Guaranteed Obligations guaranteed hereunder by any
      Subsidiary Guarantor shall not 

    
      
        
        

      

      
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    exceed
      the maximum amount that can be hereby guaranteed without rendering this
      Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
      law relating to fraudulent conveyance or fraudulent transfer or similar laws
      affecting the rights of creditors generally and (ii) to the extent required
      by
      the Department of Health of the State of Rhode Island or any successor thereto,
      the obligations under this Indenture of any Subsidiary Guarantor organized
      under
      the laws of Rhode Island in respect of assets located in Rhode Island shall
      not
      exceed 80% of the aggregate Acquisition Consideration (as defined by the Rhode
      Island Department of Health) paid by such Subsidiary Guarantor for such
      assets.

     

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

     

    SECTION
      11.04. No
      Waiver.
      To the
      fullest extent permitted by applicable law, 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 Eleven 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. To the fullest extent permitted by applicable
      law, the rights, remedies and benefits of the Trustee and the Holders herein
      expressly specified are cumulative and not exclusive of any other rights,
      remedies or benefits which either may have under this Article Eleven at law,
      in
      equity, by statute or otherwise.

     

    SECTION
      11.05. Modification.
      To the
      fullest extent permitted by applicable law, no modification, amendment or waiver
      of any provision of this Article Eleven, nor the consent to any departure
      by any Subsidiary 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 Subsidiary Guarantor in any case
      shall entitle such Subsidiary Guarantor to any other or further notice or demand
      in the same, similar or other circumstances.

     

    SECTION
      11.06. Release
      of Subsidiary
      Guarantor.
      A
      Subsidiary Guarantor will be released from its obligations under this Article
      Eleven (other than any obligation that may have arisen under Section
      11.07):

     

    (1) 
      upon the
      sale (including any sale pursuant to any exercise of remedies by a holder of
      Indebtedness of the Company or of such Subsidiary Guarantor) or other
      disposition (including by way of consolidation or merger) of a Subsidiary
      Guarantor, including the sale or disposition of the Capital Stock of a
      Subsidiary Guarantor following which such Subsidiary Guarantor is no longer
      a
      Subsidiary,

    
      
        
        

      

      
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    (2) 
      upon the
      sale or disposition of all or substantially all the assets of such Subsidiary
      Guarantor,

     

    (3) 
      upon the
      designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in
      accordance with the terms of this Indenture,

     

    (4) 
      at such
      time as such Subsidiary Guarantor does not have any Indebtedness outstanding
      that would have required such Subsidiary Guarantor to enter into a Guaranty
      Agreement pursuant to Section 4.13 and the Company provides an Officers’
Certificate to the Trustee certifying that no such Indebtedness is outstanding
      and that the Company elects to have such Subsidiary Guarantor released from
      this
      Article Eleven, or

     

    (5) 
      upon
      defeasance of the Notes pursuant to Article Eight, or

     

    (6) 
      upon the
      full satisfaction of the Company’s obligations under this Indenture pursuant to
      Section 8.01(a) or otherwise in accordance with the terms of the
      Indenture;

     

    provided,
      however,
      that in
      the case of clauses (1) and (2) above, (i) such sale or other disposition is
      made to a Person other than the Company or a Subsidiary of the Company, (ii)
      such sale or disposition is otherwise permitted by this Indenture and (iii)
      the
      Company provides an Officers’ Certificate to the Trustee to the effect that the
      Company will comply with its obligations under Section 4.06. At the request
      of
      the Company, the Trustee shall execute and deliver an appropriate instrument
      evidencing such release.

     

    SECTION
      11.07. Contribution.
      Each
      Subsidiary Guarantor that makes a payment under its Subsidiary Guaranty shall
      be
      entitled upon payment in full of all Guaranteed Obligations under this Indenture
      to a contribution from each other Subsidiary Guarantor in an amount equal to
      such other Subsidiary Guarantor’s pro rata
      portion
      of such payment based on the respective net assets of all the Subsidiary
      Guarantors at the time of such payment determined in accordance with
      GAAP.

     

    ARTICLE
      TWELVE

     

    Subordination
      of Subsidiary Guaranties

     

    SECTION
      12.01. Agreement
      To Subordinate.
      Each
      Subsidiary Guarantor agrees, and each Noteholder by accepting a Note agrees,
      that the Indebtedness evidenced by such Subsidiary Guarantor’s Subsidiary
      Guaranty is subordinated in right of payment in full in cash or Cash
      Equivalents, to the extent and in the manner provided in this
      Article Twelve, to the prior payment of all Senior Indebtedness of such
      Subsidiary Guarantor and that the subordination is for the benefit of and
      enforceable by the holders of such Senior Indebtedness. The Obligations of
      a
      Subsidiary Guarantor shall in all respects rank pari passu
      with all
      other Senior Subordinated Indebtedness of such Subsidiary Guarantor and only
      Senior Indebtedness of such Subsidiary Guarantor (including such Subsidiary
      Guarantor’s Guaranty of Senior Indebtedness of the

    
      
        
        

      

      
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    Company)
      shall rank senior to the Obligations of such Subsidiary Guarantor in accordance
      with the provisions set forth herein.

     

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

     

    (1) 
      holders
      of Senior Indebtedness of such Subsidiary Guarantor shall be entitled to receive
      payment in full in cash or Cash Equivalents of such Senior Indebtedness before
      Noteholders shall be entitled to receive any payment pursuant to the Subsidiary
      Guaranty of such Subsidiary Guarantor; and

     

    (2) 
      until
      the Senior Indebtedness of any Subsidiary Guarantor
      is paid in full in cash or Cash Equivalents, any payment or distribution to
      which Noteholders would be entitled but for this Article Twelve shall be made
      to
      holders of such Senior Indebtedness as their interests may appear, except that
      Noteholders may receive and retain Permitted Junior Securities and payments
      from
      either of the trusts described in Article Eight.

     

    SECTION
      12.03. Default
      on Senior Indebtedness of Subsidiary
      Guarantor.
      No
      Subsidiary Guarantor shall make its Subsidiary Guaranty or purchase, redeem
      or
      otherwise retire or defease any Notes or other Obligations (collectively,
“pay
      its Subsidiary Guaranty”)
      (except that Noteholders may receive and retain Permitted Junior Securities
      and
      payments made from funds deposited with the Trustee pursuant to Section 8.01
      or
      8.02) if either of the following (a “Payment
      Default”)
      occurs
      (a) any obligation on any Designated Senior Debt of such
      Subsidiary Guarantor
      is not paid in full in cash or Cash Equivalents when due; or (b) any other
      default on Designated Senior Debt of such Subsidiary Guarantor
      occurs and the maturity of such Designated Senior Debt is accelerated in
      accordance with its terms; unless, in either case, the Payment Default has
      been
      cured or waived and any such acceleration has been rescinded or such Designated
      Senior Debt has been paid in full in cash or Cash Equivalents; provided,
      however,
      that
      any Subsidiary Guarantor shall be entitled to pay its Subsidiary Guaranty
      without regard to the foregoing if such Subsidiary Guarantor and the Trustee
      receive written notice approving such payment from the Representatives of all
      Designated Senior Debt with respect to which a Payment Default has occurred
      and
      is continuing. During the continuance of any default (other than a Payment
      Default) with respect to any Designated Senior Debt of such Subsidiary 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 Subsidiary
      Guarantor shall not pay its Subsidiary Guaranty for a period (a “Payment
      Blockage Period”)
      commencing upon the receipt by the Trustee of (with a copy to such Subsidiary
      Guarantor) written notice (a “Blockage
      Notice”)
      of
      such default from the Representative of such Designated Senior Debt specifying
      an election to effect a Payment Blockage Period and ending 179 days
      thereafter. The Payment Blockage Period shall end earlier if such Payment
      Blockage Period is terminated (1) by written notice to the
      Trustee

    
      
        
        

      

      
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    and
      such
      Subsidiary Guarantor from the Person or Persons who gave such Blockage Notice;
      (2) because the default giving rise to such Blockage Notice is cured,
      waived or otherwise no longer continuing; or (3) because such Designated Senior
      Debt has been discharged or repaid in full in cash or Cash Equivalents.
      Notwithstanding the provisions described in the immediately preceding two
      sentences (but subject to the provisions contained in the first sentence of
      this
      Section), unless the holders of such Designated Senior Debt giving such Payment
      Notice or the Representative of such Designated Senior Debt shall have
      accelerated the maturity of such Designated Senior Debt, any Subsidiary
      Guarantor shall be entitled to resume payments pursuant to its Subsidiary
      Guaranty after termination of such Payment Blockage Period. No Subsidiary
      Guarantor shall be subject to more than one Blockage Period in any consecutive
      360-day period, irrespective of the number of defaults with respect to
      Designated Senior Debt of such Subsidiary Guarantor during such
      period. For
      purposes of this Section, no nonpayment default or event of default which
      existed or was continuing on the date of the commencement of any Payment
      Blockage Period with respect to the Designated Senior Debt of such Subsidiary
      Guarantor 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 Debt 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 a
      demand for payment is made on a Subsidiary Guarantor pursuant to
      Article Eleven, the Trustee shall promptly notify the holders of the
      Designated Senior Debt of such Subsidiary Guarantor
      (or their Representatives) of such demand.

     

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

     

    SECTION
      12.06. Subrogation.
      After
      all Senior Indebtedness of a Subsidiary Guarantor is paid in full in cash or
      Cash Equivalents and until the Notes are paid in full, Noteholders shall be
      subrogated to the rights of holders of such Senior Indebtedness to receive
      distributions applicable to Senior Indebtedness of such Subsidiary Guarantor
      to
      the extent that the distributions otherwise payable to the Noteholders have
      been
      applied to the payment of Senior Indebtedness. A distribution made under this
      Article Twelve to holders of such Senior Indebtedness which otherwise would
      have
      been made to Noteholders is not, as between the relevant Subsidiary Guarantor
      and Noteholders, a payment by such Subsidiary Guarantor on such Senior
      Indebtedness.

     

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

    
      
        
        

      

      
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    (1) 
      impair,
      as between a Subsidiary Guarantor
      and Noteholders, the obligation of such Subsidiary Guarantor, which is absolute
      and unconditional, to pay its Subsidiary Guaranty to the extent set forth in
      Article Eleven; or

     

    (2) 
      prevent
      the Trustee or any Noteholder from exercising its available remedies upon a
      default by such Subsidiary Guarantor under its Subsidiary Guaranty, subject
      to
      the rights of holders of Senior Indebtedness of such Subsidiary Guarantor to
      receive distributions and payments otherwise payable to
      Noteholders.

     

    SECTION
      12.08. Subordination
      May Not Be Impaired by Company.
      No right
      of any holder of Senior Indebtedness of any Subsidiary Guarantor to enforce
      the
      subordination of the Subsidiary Guaranty of such Subsidiary Guarantor shall
      be
      impaired by any act or failure to act by such Subsidiary 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 Paying Agent shall continue to
      make payments on any Subsidiary Guaranty unless the Trustee or Paying Agent
      has
      actual knowledge of the existence of facts that would prohibit the making of
      any
      such payments or unless, not less than two Business Days prior to the date
      of
      such payment, a Trust Officer of the Trustee receives written notice
      satisfactory to it that such payments are prohibited by this Article Twelve;
      provided,
      however,
      that
      the subordination of the Notes to Senior Indebtedness shall not be affected
      and
      the Noteholders receiving any payments in contravention of this
      Article Twelve shall otherwise be subject to this Article Twelve. The
      Company, the relevant Subsidiary Guarantor, the Registrar or co-registrar,
      the
      Paying Agent, a Representative or a holder of Senior Indebtedness of such
      Subsidiary Guarantor shall be entitled to give the notice; provided,
      however,
      that,
      if an issue of Senior Indebtedness of any Subsidiary Guarantor has a
      Representative, only the Representative shall be entitled to give the
      notice.

     

    The
      Trustee in its individual or any other capacity shall be entitled to hold Senior
      Indebtedness of any Subsidiary Guarantor with the same rights it would have
      if
      it were not the Trustee. The Registrar and co-registrar and the Paying Agent
      shall be entitled to do the same with like rights. The Trustee shall be entitled
      to all the rights set forth in this Article Twelve with respect to any Senior
      Indebtedness of any Subsidiary Guarantor 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 Seven shall deprive the Trustee of any of its rights as such holder.
      Nothing in this Article Twelve shall apply to claims of, or payments to, the
      Trustee under or pursuant to Section 7.08.

     

    SECTION
      12.10. Distribution
      or Notice to Representative.
      Whenever
      any Person is to make a distribution or give a notice to holders of Senior
      Indebtedness of any Subsidiary Guarantor, such Person shall be entitled to
      make
      such distribution or give such notice to their Representative (if
      any).

    
      
        
        

      

      
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    SECTION
      12.11. Article Twelve
      Not To Prevent Events of Default or Limit Right To Demand
      Payment.
      The
      failure to make a payment pursuant to a Subsidiary Guaranty by reason of any
      provision in this Article Twelve shall not be construed as preventing the
      occurrence of a Default. Nothing in this Article Twelve shall have any effect
      on
      the right of the Noteholders or the Trustee to make a demand for payment on
      any
      Subsidiary Guarantor pursuant to its Subsidiary Guaranty.

     

    SECTION
      12.12. Trustee
      Entitled To Rely.
      Upon any
      payment or distribution pursuant to this Article Twelve, the Trustee and the
      Noteholders 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 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 Noteholders or (c) upon the Representatives for the
      holders of Senior Indebtedness of any Subsidiary Guarantor 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
      such Subsidiary Guarantor, the amount thereof or payable thereon, the amount
      or
      amounts paid or distributed thereon and all other facts pertinent thereto or
      to
      this Article Twelve. 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 any Subsidiary Guarantor to participate in any payment
      or
      distribution pursuant to this Article Twelve, the Trustee shall be entitled
      to
      request such Person to furnish evidence to the reasonable satisfaction of the
      Trustee as to the amount of Senior Indebtedness of such Subsidiary 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 Twelve, and, if such evidence is not furnished,
      the Trustee shall be entitled to 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 7.03 shall be applicable to all actions
      or
      omissions of actions by the Trustee pursuant to this Article
      Twelve.

     

    SECTION
      12.13. Trustee
      To Effectuate Subordination.
      Each
      Noteholder by accepting a Note authorizes and directs the Trustee on his behalf
      to take such action as may be necessary or appropriate to acknowledge or
      effectuate the subordination between the Noteholders and the holders of Senior
      Indebtedness of any Subsidiary Guarantor as provided in this Article Twelve
      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 Subsidiary
      Guarantor.
      The
      Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
      Indebtedness of any Subsidiary Guarantor and shall not be liable to any such
      holders if it shall mistakenly pay over or distribute to Noteholders or the
      Company or any other Person, money or assets to which any holders of such Senior
      Indebtedness shall be entitled by virtue of this Article Twelve or
      otherwise.

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

    SECTION
      12.15. Reliance
      by Holders of Senior Indebtedness of Subsidiary
      Guarantors on Subordination Provisions.
      Each
      Noteholder by accepting a Note 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 any Subsidiary
      Guarantor, whether such Senior Indebtedness was created or acquired before
      or
      after the issuance of the Notes, 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.

     

    ARTICLE
      THIRTEEN

     

    Miscellaneous

     

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

     

    SECTION
      13.02. Notices.
      Any
      notice or communication shall be in writing and delivered in person or mailed
      by
      first-class mail addressed as follows:

     

    if
      to the
      Company or any Subsidiary Guarantor:

     

    Sun
      Healthcare Group, Inc.

    18831
      Von
      Karman, Suite 400

    Irvine,
      CA 92612

    Attention
      of:

    General
      Counsel

     

    if
      to the
      Trustee:

     

    Wells
      Fargo Bank, National Association

    707
      Wilshire Blvd

    17th
      Floor

    Los
      Angeles, CA 90017

     

    The
      Company, any Subsidiary Guarantor 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 Noteholder shall be mailed to the Noteholder
      at the Noteholder’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 Noteholder or any defect in it shall
      not
      affect its sufficiency with respect to other Noteholders. If a notice
      or

    
      
        
        

      

      
        80

        
          

        

      

      
        
        

      

    

    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.
      Noteholders may communicate pursuant to TIA § 312(b) with other Noteholders with
      respect to their rights under this Indenture or the Notes. The Company, any
      Subsidiary Guarantor, the Trustee, the Registrar and anyone else shall have
      the
      protection of TIA § 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:

     

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

     

    (2) 
      an
      Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
      stating that, in the opinion of such counsel, all such conditions precedent
      have
      been complied with.

     

    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 shall include:

     

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

     

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

     

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

     

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

     

    SECTION
      13.06. When
      Notes Disregarded.
      In
      determining whether the Holders of the required principal amount of Notes have
      concurred in any direction, waiver or consent, Notes owned by the Company or
      by
      any Person directly or indirectly controlling or controlled by or under direct
      or indirect common control with the Company shall be disregarded and deemed
      not
      to be outstanding, except that, for the purpose of determining whether the
      Trustee shall be protected in relying on any such direction, waiver or consent,
      only Notes which the Trustee knows are so owned shall be

    
      
        
        

      

      
        81

        
          

        

      

      
        
        

      

    

    so
      disregarded. Also, subject to the foregoing, only Notes 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 Noteholders.
      The
      Registrar and the Paying Agent may make reasonable rules for their
      functions.

     

    SECTION
      13.08. Legal
      Holidays.
      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 Notes shall be governed by, and construed in accordance with,
      the laws of the State of New York.

     

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

     

    SECTION
      13.11. Successors.
      All
      agreements of the Company in this Indenture and the Notes 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.

    
      
        
        

      

      
        82

        
          

        

      

      
        
        

      

    

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

     

    

     

    
      	
              SUN
                HEALTHCARE GROUP, INC.

            
	 
	
              By:

            	
              /s/
                Michael Newman

            
	
            	
              Michael
                Newman

            
	         Name:	    Michael
              Newman
	
              
                Title:

              

            	    
              Executive Vice President

    

    

     

     

    
      	
              WELLS
                FARGO BANK, NATIONAL ASSOCIATION,

              as
                Trustee

            
	 
	
              By:

            	
              /s/
                Maddy Hall

            
	           
              Name:	      Maddy
              Hall
	
              Title:

            	      Assistant
              Vice President

    

    

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

    
      
        	
                Americare
                  Health Services Corp.

              
	
                Atlantic
                  Medical Supply Company, Inc.

              
	
                CareerStaff
                  Unlimited, Inc.

              
	
                CareerStaff
                  Services Corporation

              
	
                Great
                  Falls Health Care Company, LLC

              
	
                HTA
                  of New York, Inc.

              
	
                Masthead
                  Corporation

              
	
                Peak
                  Medical Ancillary Services, Inc.

              
	
                Peak
                  Medical Assisted Living, Inc.

              
	
                Peak
                  Medical Colorado No. 2, Inc.

              
	
                Peak
                  Medical Colorado No. 3, Inc.

              
	
                Peak
                  Medical Corporation

              
	
                Peak
                  Medical Farmington, Inc.

              
	
                Peak
                  Medical Gallup, Inc.

              
	
                Peak
                  Medical Idaho Operations, Inc.

              
	
                Peak
                  Medical Las Cruces No. 2, Inc.

              
	
                Peak
                  Medical Las Cruces, Inc.

              
	
                Peak
                  Medical Montana Operations, Inc.

              
	
                Peak
                  Medical New Mexico No. 3, Inc.

              
	
                Peak
                  Medical NM Management Services,

              
	
                Inc.

              
	
                Peak
                  Medical of Boise, Inc.

              
	
                Peak
                  Medical of Colorado, Inc.

              
	
                Peak
                  Medical of Idaho, Inc.

              
	
                Peak
                  Medical of Montana, Inc.

              
	
                Peak
                  Medical of Utah, Inc.

              
	
                Peak
                  Medical Oklahoma No. 1, Inc.

              
	
                Peak
                  Medical Oklahoma No. 3, Inc.

              
	
                Peak
                  Medical Oklahoma No. 4, Inc.

              
	
                Peak
                  Medical Oklahoma No. 5, Inc.

              
	
                Peak
                  Medical Oklahoma No. 7, Inc.

              
	
                Peak
                  Medical Oklahoma No. 8, Inc.

              
	
                Peak
                  Medical Oklahoma No. 9, Inc.

              
	
                Peak
                  Medical Oklahoma No. 10, Inc.

              
	
                Peak
                  Medical Oklahoma No. 11, Inc.

              
	
                Peak
                  Medical Oklahoma No. 12, Inc.

              
	
                Peak
                  Medical Oklahoma No. 13, Inc.

              
	
                Peak
                  Medical Peachtree, Inc. 

              
	
                Peak
                  Medical Roswell, Inc.

              
	
                Peak
                  Medical Utah No. 2, Inc.

              
	
                PM
                  Henryetta Holdings, Inc.

              
	
                PM
                  Oxygen Services, Inc.

              
	
                PMC
                  Hospice Services, Inc.

              
	
                ProCare
                  One Nurses, LLC

              
	
                Regency
                  Health Services, Inc.

              
	
                SHG
                  Services, Inc.

              

      

      
        
          
          

        

        
          84

          
            

          

        

        
          
          

        

      

      
        
          	
                  SolAmor
                    Hospice Corporation

                
	
                  SunAlliance
                    Healthcare Services, Inc.

                
	
                  SunBridge
                    Beckley Health Care Corp.

                
	
                  SunBridge
                    Braswell Enterprises, Inc.

                
	
                  SunBridge
                    Brittany Rehabilitation Center, 

                
	
                  Inc.

                
	
                  SunBridge
                    Care Enterprises, Inc.

                
	
                  SunBridge
                    Care Enterprises West

                
	
                  SunBridge
                    Carmichael Rehabilitation Center

                
	
                  SunBridge
                    Charlton Healthcare, Inc.

                
	
                  SunBridge
                    Circleville Health Care Corp.

                
	
                  SunBridge
                    Clipper Home of North Conway,

                
	
                  Inc.

                
	
                  SunBridge
                    Clipper Home of Portsmouth,

                
	
                  Inc.

                
	
                  SunBridge
                    Clipper Home of Rochester, Inc.

                
	
                  SunBridge
                    Clipper Home of Wolfeboro, Inc.

                
	
                  SunBridge
                    Dunbar Health Care Corp.

                
	
                  SunBridge
                    Gardendale Health Care Center, 

                
	
                  Inc.

                
	
                  SunBridge
                    Glenville Health Care, Inc.

                
	
                  SunBridge
                    Goodwin Nursing Home, Inc.

                
	
                  SunBridge
                    Hallmark Health Services, Inc.

                
	
                  SunBridge
                    Harbor View Rehabilitation

                
	
                  Center

                
	
                  SunBridge
                    Healthcare Corporation

                
	
                  SunBridge
                    Jeff Davis Healthcare, Inc.

                
	
                  SunBridge
                    Maplewood Health Care Center 

                
	
                  of
                    Jackson, Tennessee, Inc.

                
	
                  SunBridge
                    Marion Health Care Corp.

                
	
                  SunBridge
                    Meadowbrook Rehabilitation 

                
	
                  Center

                
	
                  SunBridge
                    Nursing Home, Inc.

                
	
                  SunBridge
                    Paradise Rehabilitation Center, 

                
	
                  Inc.

                
	
                  SunBridge
                    Putnam Health Care Corp.

                
	
                  SunBridge
                    Regency Rehab Hospitals, Inc.

                
	
                  SunBridge
                    Regency-North Carolina, Inc.

                
	
                  SunBridge
                    Regency-Tennessee, Inc.

                
	
                  SunBridge
                    Retirement Care Associates, Inc.

                
	
                  SunBridge
                    Salem Health Care Corp.

                
	
                  SunBridge
                    San Bernardino Rehabilitation 

                
	
                  Hospital,
                    Inc.

                
	
                  SunBridge
                    Shandin Hills Rehabilitation 

                
	
                  Center

                

        

        
          
            
            

          

          
            85

            
              

            

          

          
            
            

          

        

        
          
            	
                    SunBridge
                      Statesboro Health Care Center, 

                  
	
                    Inc.

                  
	
                    SunBridge
                      Stockton Rehabilitation Center, 

                  
	
                    Inc.

                  
	
                    SunBridge
                      Summers Landing, Inc.

                  
	
                    SunBridge
                      West Tennessee, Inc.

                  
	
                    SunDance
                      Rehabilitation Agency, Inc.

                  
	
                    SunDance
                      Rehabilitation Corporation

                  
	
                    SunDance
                      Services Corporation

                  
	
                    SunHealth
                      Specialty Services, Inc.

                  
	
                    SunMark
                      of New Mexico, Inc.

                  
	
                    The
                      Mediplex Group, Inc.

                  

          

           

        

      

    

    
      	 
	 
	
              By:

            	Michael
              Newman
	
              Name:

            	Michael
              Newman
	
              Title:

            	Vice
              President

    

     

    
      
        
          

           

        

        
        

      

      
        86

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      I

    

SCHEDULE
      I

     

    LIST
      OF SUBSIDIARY GUARANTORS

     

    
      	
              1.

            	
              Americare
                Health Services Corp.

            
	
              2.

            	
              Atlantic
                Medical Supply Company, Inc.

            
	
              3.

            	
              CareerStaff
                Unlimited, Inc.

            
	
              4.

            	
              CareerStaff
                Services Corporation

            
	
              5.

            	
              Great
                Falls Health Care Company, LLC

            
	
              6.

            	
              HTA
                of New York, Inc.

            
	
              7.

            	
              Masthead
                Corporation

            
	
              8.

            	
              Peak
                Medical Ancillary Services, Inc.

            
	
              9.

            	
              Peak
                Medical Assisted Living, Inc.

            
	
              10.

            	
              Peak
                Medical Colorado No. 2, Inc.

            
	
              11.

            	
              Peak
                Medical Colorado No. 3, Inc.

            
	
              12.

            	
              Peak
                Medical Corporation

            
	
              13.

            	
              Peak
                Medical Farmington, Inc.

            
	
              14.

            	
              Peak
                Medical Gallup, Inc.

            
	
              15.

            	
              Peak
                Medical Idaho Operations, Inc.

            
	
              16.

            	
              Peak
                Medical Las Cruces No. 2, Inc.

            
	
              17.

            	
              Peak
                Medical Las Cruces, Inc.

            
	
              18.

            	
              Peak
                Medical Montana Operations, Inc.

            
	
              19.

            	
              Peak
                Medical New Mexico No. 3, Inc.

            
	
              20.

            	
              Peak
                Medical NM Management Services, Inc.

            
	
              21.

            	
              Peak
                Medical of Boise, Inc.

            
	
              22.

            	
              Peak
                Medical of Colorado, Inc.

            
	
              23.

            	
              Peak
                Medical of Idaho, Inc.

            
	
              24.

            	
              Peak
                Medical of Montana, Inc.

            
	
              25.

            	
              Peak
                Medical of Utah, Inc.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              26.

            	
              Peak
                Medical Oklahoma No. 1, Inc.

            
	
              27.

            	
              Peak
                Medical Oklahoma No. 3, Inc.

            
	
              28.

            	
              Peak
                Medical Oklahoma No. 4, Inc.

            
	
              29.

            	
              Peak
                Medical Oklahoma No. 5, Inc.

            
	
              30.

            	
              Peak
                Medical Oklahoma No. 7, Inc.

            
	
              31.

            	
              Peak
                Medical Oklahoma No. 8, Inc.

            
	
              32.

            	
              Peak
                Medical Oklahoma No. 9, Inc.

            
	
              33.

            	
              Peak
                Medical Oklahoma No. 10, Inc.

            
	
              34.

            	
              Peak
                Medical Oklahoma No. 11, Inc.

            
	
              35.

            	
              Peak
                Medical Oklahoma No. 12, Inc.

            
	
              36.

            	
              Peak
                Medical Oklahoma No. 13, Inc.

            
	
              37.

            	
              Peak
                Medical Peachtree, Inc. 

            
	
              38.

            	
              Peak
                Medical Roswell, Inc.

            
	
              39.

            	
              Peak
                Medical Utah No. 2, Inc.

            
	
              40.

            	
              PM
                Henryetta Holdings, Inc.

            
	
              41.

            	
              PM
                Oxygen Services, Inc.

            
	
              42.

            	
              PMC
                Hospice Services, Inc.

            
	
              43.

            	
              ProCare
                One Nurses, LLC

            
	
              44.

            	
              Regency
                Health Services, Inc.

            
	
              45.

            	
              SHG
                Services, Inc.

            
	
              46.

            	
              SolAmor
                Hospice Corporation

            
	
              47.

            	
              SunAlliance
                Healthcare Services, Inc.

            
	
              48.

            	
              SunBridge
                Beckley Health Care Corp.

            
	
              49.

            	
              SunBridge
                Braswell Enterprises, Inc.

            
	
              50.

            	
              SunBridge
                Brittany Rehabilitation Center, Inc.

            
	
              51.

            	
              SunBridge
                Care Enterprises, Inc.

            
	
              52.

            	
              SunBridge
                Care Enterprises West

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              53.

            	
              SunBridge
                Carmichael Rehabilitation Center

            
	
              54.

            	
              SunBridge
                Charlton Healthcare, Inc.

            
	
              55.

            	
              SunBridge
                Circleville Health Care Corp.

            
	
              56.

            	
              SunBridge
                Clipper Home of North Conway, Inc.

            
	
              57.

            	
              SunBridge
                Clipper Home of Portsmouth, Inc.

            
	
              58.

            	
              SunBridge
                Clipper Home of Rochester, Inc.

            
	
              59.

            	
              SunBridge
                Clipper Home of Wolfeboro, Inc.

            
	
              60.

            	
              SunBridge
                Dunbar Health Care Corp.

            
	
              61.

            	
              SunBridge
                Gardendale Health Care Center, Inc.

            
	
              62.

            	
              SunBridge
                Glenville Health Care, Inc.

            
	
              63.

            	
              SunBridge
                Goodwin Nursing Home, Inc.

            
	
              64.

            	
              SunBridge
                Hallmark Health Services, Inc.

            
	
              65.

            	
              SunBridge
                Harbor View Rehabilitation Center

            
	
              66.

            	
              SunBridge
                Healthcare Corporation

            
	
              67.

            	
              SunBridge
                Jeff Davis Healthcare, Inc.

            
	
              68.

            	
              SunBridge
                Maplewood Health Care Center of Jackson, Tennessee,
                Inc.

            
	
              69.

            	
              SunBridge
                Marion Health Care Corp.

            
	
              70.

            	
              SunBridge
                Meadowbrook Rehabilitation Center

            
	
              71.

            	
              SunBridge
                Nursing Home, Inc.

            
	
              72.

            	
              SunBridge
                Paradise Rehabilitation Center, Inc.

            
	
              73.

            	
              SunBridge
                Putnam Health Care Corp.

            
	
              74.

            	
              SunBridge
                Regency Rehab Hospitals, Inc.

            
	
              75.

            	
              SunBridge
                Regency-North Carolina, Inc.

            
	
              76.

            	
              SunBridge
                Regency-Tennessee, Inc.

            
	
              77.

            	
              SunBridge
                Retirement Care Associates, Inc.

            
	
              78.

            	
              SunBridge
                Salem Health Care Corp.

            
	
              79.

            	
              SunBridge
                San Bernardino Rehabilitation Hospital,
                Inc.

            

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
              80.

            	
              SunBridge
                Shandin Hills Rehabilitation Center

            
	
              81.

            	
              SunBridge
                Statesboro Health Care Center, Inc.

            
	
              82.

            	
              SunBridge
                Stockton Rehabilitation Center, Inc.

            
	
              83.

            	
              SunBridge
                Summers Landing, Inc.

            
	
              84.

            	
              SunBridge
                West Tennessee, Inc.

            
	
              85.

            	
              SunDance
                Rehabilitation Agency, Inc.

            
	
              86.

            	
              SunDance
                Rehabilitation Corporation

            
	
              87.

            	
              SunDance
                Services Corporation

            
	
              88.

            	
              SunHealth
                Specialty Services, Inc.

            
	
              89.

            	
              SunMark
                of New Mexico, Inc.

            
	
              90.

            	
              The
                Mediplex Group, Inc.

            

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    RULE 144A/REGULATION S/IAI
      APPENDIX

     

    PROVISIONS
      RELATING TO INITIAL NOTES,

     

    PRIVATE
      EXCHANGE NOTES

     

    AND
      EXCHANGE NOTES

     

    1. Definitions

     

    1.1 Definitions

     

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

     

    “Additional
      Notes” means Notes (other than the Initial Notes issued on the Issue Date)
      issued under this Indenture, as part of the same series as the Initial Notes
      issued on the Issue Date.

     

    “Applicable
      Procedures” means, with respect to any transfer or transaction involving a
      Temporary Regulation S Global Note or beneficial interest therein, the rules
      and
      procedures of the Depository for such a Temporary Regulation S Global Note,
      to
      the extent applicable to such transaction and as in effect from time to
      time.

     

    “Definitive
      Note” means a certificated Initial Note or Exchange Note or Private Exchange
      Note bearing, if required, the appropriate restricted securities legend set
      forth in Section 2.3(e).

     

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

     

    “Distribution
      Compliance Period”, with respect to any Notes, means the period of 40
      consecutive days beginning on and including the later of (i) the day on which
      such Notes are first offered to Persons other than distributors (as defined
      in
      Regulation S under the Securities Act) in reliance on Regulation S and (ii)
      the
      issue date with respect to such Notes.

     

    “Exchange
      Notes” means (1) the 91⁄8% Senior Subordinated Notes
      due
      2015 issued pursuant to the Indenture in connection with a Registered Exchange
      Offer and (2) Additional Notes, if any, issued pursuant to a registration
      statement filed with the SEC under the Securities Act.

     

    “IAI”
      means an institutional “accredited investor”, as defined in Rule 501(a)(1),
      (2), (3) and (7) of Regulation D under the Securities Act.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Initial
      Purchasers” means (1) with respect to the Initial Notes issued on the Issue
      Date, Credit Suisse Securities (USA) LLC, CIBC World Markets Corp., UBS
      Securities LLC and Jefferies & Company, Inc. and (2) with respect to
      each issuance of Additional Notes, the Persons purchasing such Additional Notes
      under the related Purchase Agreement.

     

    “Initial
      Notes” means (1) $200,000,000 aggregate principal amount of 91⁄8% Senior
      Subordinated Notes due 2015 issued on the Issue Date and
      (2) Additional Notes, if any, issued in a transaction exempt from the
      registration requirements of the Securities Act.

     

    “Private
      Exchange” means the offer by the Company, pursuant to a Registration Rights
      Agreement, to the Initial Purchasers to issue and deliver to each Initial
      Purchaser, in exchange for the Initial Notes held by the Initial Purchaser
      as
      part of its initial distribution, a like aggregate principal amount of Private
      Exchange Notes.

     

    “Private
      Exchange Notes” means any 91⁄8% Senior Subordinated Notes due 2015 issued in
      connection with a Private Exchange.

     

    “Purchase
      Agreement” means (1) with respect to the Initial Notes issued on the Issue
      Date, the Purchase Agreement dated March 22, 2007, among the Company, the
      Subsidiary Guarantors and the Initial Purchasers, and (2) with respect to
      each issuance of Additional Notes, the purchase agreement or underwriting
      agreement among the Company, the Subsidiary Guarantors and the Persons
      purchasing such Additional Notes.

     

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

     

    “Registered
      Exchange Offer” means the offer by the Company, pursuant to a Registration
      Rights Agreement, to certain Holders of Initial Notes, to issue and deliver
      to
      such Holders, in exchange for the Initial Notes, a like aggregate principal
      amount of Exchange Notes registered under the Securities Act.

     

    “Registration
      Rights Agreement” means (1) with respect to the Initial Notes issued on the
      Issue Date, the Registration Rights Agreement dated April 12, 2007, among the
      Company, the Subsidiary Guarantors and the Initial Purchasers and (2) with
      respect to each issuance of Additional Notes issued in a transaction exempt
      from
      the registration requirements of the Securities Act, the registration rights
      agreement, if any, among the Company, the Subsidiary Guarantors and the Persons
      purchasing such Additional Notes under the related Purchase
      Agreement.

     

    “Rule
      144A Notes” means all Notes offered and sold to QIBs in reliance on Rule
      144A.

     

    “Notes”
      means the Initial Notes, the Exchange Notes and the Private Exchange Notes,
      treated as a single class.

     

    “Securities
      Act” means the Securities Act of 1933.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Notes
      Custodian” means the custodian with respect to a Global Note (as appointed by
      the Depository), or any successor Person thereto and shall initially be the
      Trustee.

     

    “Shelf
      Registration Statement” means the registration statement issued by the Company
      in connection with the offer and sale of Initial Notes or Private Exchange
      Notes
      pursuant to a Registration Rights Agreement.

     

    “Transfer
      Restricted Notes” means Notes that bear or are required to bear the legend
      relating to restrictions on transfer relating to the Securities Act set forth
      in
      Section 2.3(e) hereof.

     

    1.2 Other
      Definitions

     

    
      	
              Term

            	
              Defined
                in

              Section:

            
	
              “Agent
                Members”

            	
              2.1(b)

            
	
              “Global
                Notes”

            	
              2.1(a)

            
	
              “IAI
                Global Note”

            	
              2.1(a)

            
	
              “Permanent
                Regulation S Global Note”

            	
              2.1(a)

            
	
              “Regulation
                S”

            	
              2.1(a)

            
	
              “Regulation
                S Global Note”

            	
              2.1(a)

            
	
              “Rule
                144A”

            	
              2.1(a)

            
	
              “Rule
                144A Global Note”

            	
              2.1(a)

            
	
              “Temporary
                Regulation S Global Note”

            	
              2.1(a)

            

    

     

     

    2. The
      Notes.

     

    2.1 (a)  Form
      and Dating.
      The
      Initial Notes will be offered and sold by the Company pursuant to a Purchase
      Agreement. The Initial Notes will be resold initially only to (i) QIBs in
      reliance on Rule 144A under the Securities Act (“Rule 144A”)
      and
      (ii) Persons other than U.S. Persons (as defined in Regulation S) in
      reliance on Regulation S under the Securities Act (“Regulation
      S”).
      Initial Notes may thereafter be transferred to, among others, QIBs, IAIs and
      purchasers in reliance on Regulation S, subject to the restrictions on transfer
      set forth herein. Initial Notes initially resold pursuant to Rule 144A shall
      be
      issued initially in the form of one or more permanent 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

      global Notes in definitive, fully registered form
        (collectively, the “Rule
        144A Global Note”);
        Initial Notes initially resold pursuant to Regulation S shall be issued
        initially in the form of one or more temporary global securities in fully
        registered form (collectively, the “Temporary
        Regulation S Global Note”);
        and
        Initial Notes initially resold to IAIs shall be issued initially in the form
        of
        one or more permanent global Notes in definitive, fully registered form
        (collectively, the “IAI
        Global Note”),
        in
        each case without interest coupons and with the global securities legend
        and the
        applicable restricted securities legend set forth in Exhibit 1 hereto,
        which shall be deposited on behalf of the purchasers of the Initial Notes
        represented thereby with the Notes Custodian and registered in the name of
        the
        Depository or a nominee of the Depository, duly executed by the Company and
        authenticated by the Trustee as provided in this Indenture. Except as set
        forth
        in this Section 2.1(a), beneficial ownership interests in the Temporary
        Regulation S Global Note will not be exchangeable for interests in the Rule
        144A
        Global Note, the IAI Global Note, a permanent global security (the “Permanent
        Regulation S Global Note”,
        and
        together with the Temporary Regulation S Global Note, the “Regulation
        S Global Note”)
        or any
        other Note prior to the expiration of the Distribution Compliance Period
        and
        then, after the expiration of the Distribution Compliance Period, may be
        exchanged for interests in a Rule 144A Global Note, an IAI Global Note or
        the Permanent Regulation S Global Note only upon certification in form
        reasonably satisfactory to the Trustee that (i) beneficial ownership interests
        in such Temporary Regulation S Global Note are owned either by non-U.S. persons
        or U.S. persons who purchased such interests in a transaction that did not
        require registration under the Securities Act and (ii) in the case of an
        exchange for an IAI Global Note, certification that the interest in the
        Temporary Regulation S Global Note is being transferred to an institutional
        “accredited investor” (as defined under the Securities Act) that is acquiring
        the securities for its own account or for the account of an institutional
        accredited investor.

    

     

    Beneficial
      interests in Temporary Regulation S Global Notes or IAI Global Notes may be
      exchanged for interests in Rule 144A Global Notes if (1) such exchange
      occurs in connection with a transfer of Notes in compliance with Rule 144A
      and
      (2) the transferor of the beneficial interest in the Temporary Regulation S
      Global Note or the IAI Global Note, as applicable, first delivers to the Trustee
      a written certificate (in a form satisfactory to the Trustee) to the effect
      that
      the beneficial interest in the Temporary Regulation S Global Note or the IAI
      Global Note, as applicable, is being transferred to a Person (a) who the
      transferor reasonably believes to be a QIB, (b) purchasing for its own
      account or the account of a QIB in a transaction meeting the requirements of
      Rule 144A, and (c) in accordance with all applicable securities laws of the
      States of the United States and other jurisdictions. 

     

    Beneficial
      interests in Temporary Regulation S Global Notes and Rule 144A Global Notes
      may
      be exchanged for an interest in IAI Global Notes if (1) such exchange
      occurs in connection with a transfer of the securities in compliance with an
      exemption under the Securities Act and (2) the transferor of the
      Regulation S Global Note or Rule 144A Global Note, as applicable, first
      delivers to the trustee a written certificate (substantially in the form of
      Exhibit 3) to the effect that (A) the Regulation S Global Note or Rule 144A
      Global Note, as applicable, is being transferred (a) to an “accredited
      investor” within the meaning of 501(a)(1),(2),(3) and (7) under the Securities
      Act that is 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        
an
        institutional investor acquiring the securities for its own account or for
        the
        account of such an institutional accredited investor, in each case in a minimum
        principal amount of the securities of $250,000, for investment purposes and
        not
        with a view to or for offer or sale in connection with any distribution in
        violation of the Securities Act and (B) in accordance with all applicable
        securities laws of the States of the United States and other
        jurisdictions.

    

     

    Beneficial
      interests in a Rule 144A Global Note or an IAI Global Note may be
      transferred to a Person who takes delivery in the form of an interest in a
      Regulation S Global Note, whether before or after the expiration of the
      Distribution Compliance Period, only if the transferor first delivers to the
      Trustee a written certificate (in the form provided in the Indenture) to the
      effect that such transfer is being made in accordance with Rule 903 or 904
      of Regulation S or Rule 144 (if applicable).

     

    The
      Rule
      144A Global Note, the IAI Global Note, the Temporary Regulation S Global Note
      and the Permanent Regulation S Global Note are collectively referred to herein
      as “Global
      Notes”.
      The
      aggregate principal amount of the Global Notes may from time to time be
      increased or decreased by adjustments made on the records of the Trustee and
      the
      Depository or its nominee as hereinafter provided.

     

    (b)  Book-Entry
      Provisions.
      This
      Section 2.1(b) shall apply only to a Global Note deposited with or on
      behalf of the Depository.

     

    The
      Company shall execute and the Trustee shall, in accordance with this
      Section 2.1(b), authenticate and deliver initially one or more Global Notes
      that (a) shall be registered in the name of the Depository for such Global
      Note or Global Notes or the nominee of such Depository and (b) shall be
      delivered by the Trustee to such Depository or pursuant to such Depository’s
      instructions or held by the Trustee as custodian for the
      Depository.

     

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

     

    (c)  Definitive
      Notes.
      Except
      as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial
      interests in Global Notes shall not be entitled to receive physical delivery
      of
      Definitive Notes.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    2.2 Authentication.  The
      Trustee shall authenticate and deliver: (1) on the Issue Date, an aggregate
      principal amount of $200,000,000 91⁄8% Senior Subordinated Notes due 2015,
      (2) any Additional Notes for an original issue in an aggregate principal
      amount specified in the written order of the Company pursuant to
      Section 2.02 of the Indenture and (3) Exchange Notes or Private
      Exchange Notes for issue only in a Registered Exchange Offer or a Private
      Exchange, respectively, pursuant to a Registration Rights Agreement, for a
      like
      principal amount of Initial Notes, in each case upon a written order of the
      Company signed by at least one Officer of the Company. Such order shall specify
      the amount of the Notes to be authenticated and the date on which the original
      issue of Notes is to be authenticated and, in the case of any issuance of
      Additional Notes pursuant to Section 2.14 of the Indenture, shall certify
      that such issuance is in compliance with Section 4.03 of the Indenture.

     

    2.3 Transfer
      and
      Exchange.

     

    (a)   Transfer
      and Exchange of Definitive Notes.
      When
      Definitive Notes are presented to the Registrar with a request:

     

    
      	 	
              (x)

            	
              to
                register the transfer of such Definitive Notes;
                or

            

    

     

    
      	 	
              (y)

            	
              to
                exchange such Definitive Notes for an equal principal amount of Definitive
                Notes of other authorized
                denominations,

            

    

     

    the
      Registrar shall register the transfer or make the exchange as requested if
      its
      reasonable requirements for such transaction are met; provided,
      however,
      that
      the Definitive Notes surrendered for transfer or exchange:

     

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

     

    (ii)
      if
      such Definitive Notes are not required to bear a restricted securities legend,
      they are being transferred or exchanged pursuant to an effective registration
      statement under the Securities Act, pursuant to Section 2.3(b) or pursuant
      to
      clause (a), (b) or (c) below, and are accompanied by the following additional
      information and documents, as applicable:

     

    (a) if
      such
      Definitive Notes are being delivered to the Registrar by a Holder for
      registration in the name of such Holder, without transfer, a certification
      from
      such Holder to that effect; or

     

    (b) if
      such
      Definitive Notes are being transferred to the Company, a certification to that
      effect; or

     

    (c) if
      such
      Definitive Notes are being transferred (x) pursuant to an exemption from
      registration in accordance with Rule 144A, Regulation S or Rule 144 under the
      Securities Act; or (y) in reliance upon another 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

      exemption
        from the requirements of the Securities Act: (i) a certification to that
        effect
        (in the form set forth on the reverse of the Note) and (ii) if the Company
        so
        requests, an opinion of counsel or other evidence reasonably satisfactory
        to it
        as to the compliance with the restrictions set forth in the legend set forth
        in
        Section 2.3(e)(i).

    

     

    (b)   Restrictions
      on Transfer of a Definitive Note for a Beneficial Interest in a Global
      Note.
      A Definitive Note may not be exchanged for a beneficial interest in a Rule
      144A Global Note, an IAI Global Note or a Permanent Regulation S Global Note
      except upon satisfaction of the requirements set forth below. Upon receipt
      by
      the Trustee of a Definitive Note, duly endorsed or accompanied by appropriate
      instruments of transfer, in form satisfactory to the Trustee, together
      with:

     

    (i) certification,
      in the form set forth on the reverse of the Note, that such Definitive Note
      is
      either (A) being transferred to a QIB in accordance with Rule 144A, (B) being
      transferred to an IAI or (C) being transferred after expiration of the
      Distribution Compliance Period by a Person who initially purchased such Note
      in
      reliance on Regulation S to a buyer who elects to hold its interest in such
      Note
      in the form of a beneficial interest in the Permanent Regulation S Global Note;
      and

     

    (ii) written
      instructions directing the Trustee to make, or to direct the Notes Custodian
      to
      make, an adjustment on its books and records with respect to such Rule 144A
      Global Note (in the case of a transfer pursuant to clause (b)(i)(A)), IAI Global
      Note (in the case of a transfer pursuant to clause (b)(1)(B)) or Permanent
      Regulation S Global Note (in the case of a transfer pursuant to clause
      (b)(i)(C)) to reflect an increase in the aggregate principal amount of the
      Notes
      represented by the Rule 144A Global Note, IAI Global Note or Permanent
      Regulation S Global Note, as applicable, such instructions to contain
      information regarding the Depository account to be credited with such increase,
      

     

    then
      the
      Trustee shall cancel such Definitive Note and cause, or direct the Notes
      Custodian to cause, in accordance with the standing instructions and procedures
      existing between the Depository and the Notes Custodian, the aggregate principal
      amount of Notes represented by the Rule 144A Global Note, IAI Global Note or
      Permanent Regulation S Global Note, as applicable, to be increased by the
      aggregate principal amount of the Definitive Note to be exchanged and shall
      credit or cause to be credited to the account of the Person specified in such
      instructions a beneficial interest in the Rule 144A Global Note, IAI Global
      Note
      or Permanent Regulation S Global Note, as applicable, equal to the principal
      amount of the Definitive Note so canceled. If no Rule 144A Global Notes, IAI
      Global Notes or Permanent Regulation S Global Notes, as applicable, are then
      outstanding, the Company shall issue and the Trustee shall authenticate, upon
      written order of the Company in the form of an Officers’ Certificate of

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    the
      Company, a new Rule 144A Global Note, IAI Global Note or Permanent Regulation
      S
      Global Note, as applicable, in the appropriate principal amount.

     

    (c)   Transfer
      and Exchange of Global Notes.

     

    (i) The
      transfer and exchange of Global Notes or beneficial interests therein shall
      be
      effected through the Depository, in accordance with this Indenture (including
      applicable restrictions on transfer set forth herein, if any) and the procedures
      of the Depository therefor. A transferor of a beneficial interest in a Global
      Note shall deliver to the Registrar, through the Depository, a written order
      given in accordance with the Depository’s procedures containing information
      regarding the participant account of the Depository to be credited with a
      beneficial interest in the Global Note. The Registrar shall, in accordance
      with
      such instructions instruct the Depository to credit to the account of the Person
      specified in such instructions a beneficial interest in the Global Note and
      to
      debit the account of the Person making the transfer the beneficial interest
      in
      the Global Note being transferred.

     

    (ii) If
      the
      proposed transfer is a transfer of a beneficial interest in one Global Note
      to a
      beneficial interest in another Global Note, the Registrar shall reflect on
      its
      books and records the date and an increase in the principal amount of the Global
      Note to which such interest is being transferred in an amount equal to the
      principal amount of the interest to be so transferred, and the Registrar shall
      reflect on its books and records the date and a corresponding decrease in the
      principal amount of the Global Note from which such interest is being
      transferred.

     

    (iii) Notwithstanding
      any other provisions of this Appendix (other than the provisions set forth
      in
      Section 2.4), a Global Note may not be transferred as a whole except by the
      Depository to a nominee of the Depository or by a nominee of the Depository
      to
      the Depository or another nominee of the Depository or by the Depository or
      any
      such nominee to a successor Depository or a nominee of such successor
      Depository.

     

    (iv) In
      the
      event that (a) Global Note is exchanged for Definitive Notes pursuant to Section
      2.4 of this Appendix, prior to the consummation of a Registered Exchange Offer
      or the effectiveness of a Shelf Registration Statement with respect to such
      Notes, such Notes may be exchanged only in accordance with such procedures
      as
      are substantially consistent with the provisions of this Section 2.3 (including
      the certification requirements set forth on the reverse of the Initial Notes
      intended to ensure that such transfers comply with Rule 144A, Regulation S
      or
      another 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

      applicable
        exemption under the Securities Act, as the case may be) and such other
        procedures as may from time to time be adopted by the
        Company.

    

     

    (d)   Restrictions
      on Transfer of Temporary Regulation S Global Notes.
      During
      the Distribution Compliance Period, beneficial ownership interests in Temporary
      Regulation S Global Notes may only be sold, pledged or transferred in accordance
      with the Applicable Procedures and only (i) to the Company, (ii) in an
      offshore transaction in accordance with Regulation S (other than a transaction
      resulting in an exchange for an interest in a Permanent Regulation S Global
      Note), (iii) pursuant to Section 2.1 or (iv) pursuant to an effective
      registration statement under the Securities Act, in each case in accordance
      with
      any applicable securities laws of any State of the United States.

     

    (e)   Legend.

     

    (i) Except
      as
      permitted by the following paragraphs (ii), (iii) and (iv), each Note
      certificate evidencing the Global Notes (and all Notes issued in exchange
      therefor or in substitution thereof), in the case of Notes offered otherwise
      than in reliance on Regulation S shall bear a legend in substantially the
      following form:

     

    THIS
      NOTE
      (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
      REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
      TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
      THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
      THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
      OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

     

    THE
      HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
      NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN
      THE
      UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
      INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
      TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) TO AN
“ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1),(2),(3) OR (7)
      OF REGULATION D UNDER THE SECURITIES ACT THAT, 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    PRIOR
      TO
      SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
      REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM
      OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT
      OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
      COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH
      THE
      SECURITIES ACT, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
      IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
      THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN
      ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
      STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
      NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED
      TO
      IN (A) ABOVE.

     

    Each
      certificate evidencing a Note offered in reliance on Regulation S shall, in
      addition to the foregoing, bear a legend in substantially the following
      form:

     

    THIS
      NOTE
      (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT
      FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
      THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
      EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
      APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN
      TO
      THEM IN REGULATION S UNDER THE SECURITIES ACT.

     

    Each
      Definitive Note shall also bear the following additional legend:

     

    IN
      CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
      TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
      MAY REASONABLY 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    REQUIRE
      TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
      RESTRICTIONS.

     

    (ii) Upon
      any
      sale or transfer of a Transfer Restricted Note (including any Transfer
      Restricted Note represented by a Global Note) pursuant to Rule 144 under the
      Securities Act, the Registrar shall permit the transferee thereof to exchange
      such Transfer Restricted Note for a certificated Note that does not bear the
      legend set forth above and rescind any restriction on the transfer of such
      Transfer Restricted Note, if the transferor thereof certifies in writing to
      the
      Registrar that such sale or transfer was made in reliance on Rule 144 (such
      certification to be in the form set forth on the reverse of the
      Note).

     

    (iii) After
      a
      transfer of any Initial Notes or Private Exchange Notes pursuant to and during
      the period of the effectiveness of a Shelf Registration Statement with respect
      to such Initial Notes or Private Exchange Notes, as the case may be, all
      requirements pertaining to legends on such Initial Note or such Private Exchange
      Note will cease to apply, the requirements requiring any such Initial Note
      or
      such Private Exchange Note issued to certain Holders be issued in global form
      will cease to apply, and a certificated Initial Note or Private Exchange Note
      or
      an Initial Note or Private Exchange Note in global form, in each case without
      restrictive transfer legends, will be available to the transferee of the Holder
      of such Initial Notes or Private Exchange Notes upon exchange of such
      transferring Holder’s certificated Initial Note or Private Exchange Note or
      directions to transfer such Holder’s interest in the Global Note, as
      applicable.

     

    (iv) Upon
      the
      consummation of a Registered Exchange Offer with respect to the Initial Notes,
      all requirements pertaining to such Initial Notes that Initial Notes issued
      to
      certain Holders be issued in global form will still apply with respect to
      Holders of such Initial Notes that do not exchange their Initial Notes, and
      Exchange Notes in certificated or global form, in each case without the
      restricted securities legend set forth in Exhibit 1 hereto will be
      available to Holders that exchange such Initial Notes in such Registered
      Exchange Offer.

     

    (v) Upon
      the
      consummation of a Private Exchange with respect to the Initial Notes, all
      requirements pertaining to such Initial Notes that Initial Notes issued to
      certain Holders be issued in global form will still apply with respect to
      Holders of such Initial Notes that do not exchange their Initial Notes, and
      Private Exchange Notes in global form with the global securities legend and
      the
      applicable restricted securities legend set forth in Exhibit 1

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

      hereto
        will be available to Holders that exchange such Initial Notes in such Private
        Exchange.

    

     

    (f)   Cancellation
      or Adjustment of Global Note.
      At such
      time as all beneficial interests in a Global Note have either been exchanged
      for
      Definitive Notes, redeemed, purchased or canceled, such Global Note shall be
      returned to the Depository for cancellation or retained and canceled by the
      Trustee. At any time prior to such cancellation, if any beneficial interest
      in a
      Global Note is exchanged for certificated Notes, redeemed, purchased or
      canceled, the principal amount of Notes represented by such Global Note shall
      be
      reduced and an adjustment shall be made on the books and records of the Trustee
      (if it is then the Notes Custodian for such Global Note) with respect to such
      Global Note, by the Trustee or the Notes Custodian, to reflect such
      reduction.

     

    (g)   No
      Obligation of the Trustee.

     

    (i) The
      Trustee shall have no responsibility or obligation to any beneficial owner
      of a
      Global Note, a member of, or a participant in the Depository or other Person
      with respect to the accuracy of the records of the Depository or its nominee
      or
      of any participant or member thereof, with respect to any ownership interest
      in
      the Notes or with respect to the delivery to any participant, member, beneficial
      owner or other Person (other than the Depository) of any notice (including
      any
      notice of redemption) or the payment of any amount, under or with respect to
      such Notes. All notices and communications to be given to the Holders and all
      payments to be made to Holders under the Notes shall be given or made only
      to or
      upon the order of the registered Holders (which shall be the Depository or
      its
      nominee in the case of a Global Note). The rights of beneficial owners in any
      Global Note shall be exercised only through the Depository subject to the
      applicable rules and procedures of the Depository. The Trustee may rely and
      shall be fully protected in relying upon information furnished by the Depository
      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 Note
      (including any transfers between or among Depository participants, members
      or
      beneficial owners in any Global Note) other than to require delivery of such
      certificates and other documentation or evidence as are expressly required
      by,
      and to do so if and when expressly required by, the terms of this Indenture,
      and
      to examine the same to determine substantial compliance as to form with the
      express requirements hereof.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    2.4 Definitive
      Notes.

     

    (a)   A
      Global
      Note deposited with the Depository or with the Trustee as Notes Custodian for
      the Depository pursuant to Section 2.1 shall be transferred to the
      beneficial owners thereof in the form of Definitive Notes in an aggregate
      principal amount equal to the principal amount of such Global Note, in exchange
      for such Global Note, only if such transfer complies with Section 2.3
      hereof and (i) the Depository notifies the Company that it is unwilling or
      unable to continue as Depository for such Global Note and the Depository fails
      to appoint a successor depository or if at any time such Depository ceases
      to be
      a “clearing agency” registered under the Exchange Act, in either case, and a
      successor depository is not appointed by the Company within 90 days of such
      notice, or (ii) the Company, in its sole discretion, notifies the Trustee in
      writing that it elects to cause the issuance of Definitive Notes under this
      Indenture.

     

    (b)   Any
      Global Note that is transferable to the beneficial owners thereof pursuant
      to
      this Section 2.4 shall be surrendered by the Depository to the Trustee
      located at its principal corporate trust office in the Borough of Manhattan,
      The
      City of New York, 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 Note, an equal aggregate principal
      amount of Definitive Notes of authorized denominations. Any portion of a Global
      Note transferred pursuant to this Section 2.4 shall be executed,
      authenticated and delivered only in denominations of $2,000 principal amount
      and
      any integral multiples of $1,000 in excess of $2,000 and registered in such
      names as the Depository shall direct. Any Definitive Note delivered in exchange
      for an interest in the Transfer Restricted Note shall, except as otherwise
      provided by Section 2.3(e) hereof, bear the applicable restricted
      securities legend and definitive securities legend set forth in Exhibit 1
      hereto.

     

    (c)   Subject
      to the provisions of Section 2.4(b) hereof, the registered Holder of a
      Global Note shall be entitled to grant proxies and otherwise authorize any
      Person, including Agent Members and Persons that may hold interests through
      Agent Members, to take any action which a Holder is entitled to take under
      this
      Indenture or the Notes.

     

    (d)   In
      the
      event of the occurrence of one of the events specified in Section 2.4(a)
      hereof, the Company shall promptly make available to the Trustee a reasonable
      supply of Definitive Notes in definitive, fully registered form without interest
      coupons. In the event that such Definitive Notes are not issued, the Company
      expressly acknowledges, with respect to the right of any Holder to pursue a
      remedy pursuant to Section 6.06, the right of any beneficial owner of Notes
      to pursue such remedy with respect to the portion of the Global Note that
      represents such beneficial owner’s Notes as if such Definitive Notes had been
      issued. 

    
      
        
          

           

        

        
        

      

      
        17

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      1

    to

    RULE
      144A/REGULATION S/IAI APPENDIX

     

    [FORM
      OF
      FACE OF INITIAL NOTE]

     

    [Global
      Notes Legend]

     

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

     

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

     

    [[FOR
      REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT
      OR
      COMPLETION OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE UNITED STATES
      BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE
      THAN
      IN ACCORDANCE WITH RULE 144A THEREUNDER.]

     

    [Restricted
      Notes Legend for Notes offered otherwise than in Reliance on Regulation
      S]

     

    THIS
      NOTE
      (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
      REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
      TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
      THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
      THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
      OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    THE
      HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
      NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
      (I) WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
      BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
      THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
      (II) TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF
      RULE 501(A)(1),(2),(3) OR (7) OF REGULATION D 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 NOTE
      (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER
      IS IN
      RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION
      OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH
      THE SECURITIES ACT, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE
      TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
      (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
      PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
      (I)
      THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
      OF
      THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
      REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
      RESTRICTIONS REFERRED TO IN (A) ABOVE.

     

    [Restricted
      Notes Legend for Notes Offered in Reliance on Regulation S]

     

    THIS
      NOTE
      (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT
      FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
      AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES
      OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO
      AN
      AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
      AND
      ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN
      TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

     

    [Temporary
      Regulation S Global Note Legend]

     

    EXCEPT
      AS
      SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY
      REGULATION S GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE
      PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN
      INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
      CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

      THE
        “40-DAY DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(b)(2) OF
        REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN
        FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS
        ARE
        OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS
        IN
        A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT.
        DURING
        SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS
        IN
        THIS TEMPORARY REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR
        TRANSFERRED (I) TO THE COMPANY, (II) OUTSIDE THE UNITED STATES IN A
        TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
        SECURITIES ACT, (III) IN ACCORDANCE WITH RULE 144A UNDER THE
        SECURITIES ACT, OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
        UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE
        WITH
        ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. HOLDERS
        OF
        INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOTIFY ANY
        PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN
        APPLICABLE.

    

     

    AFTER
      THE
      EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD BENEFICIAL INTERESTS IN THIS
      TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN A RULE
      144A
      GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER
      OF
      THE SECURITIES IN COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE
      REGULATION S GLOBAL NOTE FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE
      (IN
      THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S
      GLOBAL NOTE IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY
      BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A,
      (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
      QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
      RULE
      144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES
      OF
      THE UNITED STATES AND OTHER JURISDICTIONS.

     

    AFTER
      THE
      EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL INTERESTS IN THIS
      TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN AN IAI
      GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER
      OF THE NOTES IN COMPLIANCE WITH AN EXEMPTION UNDER THE SECURITIES ACT AND
      (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST DELIVERS TO
      THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE)
      TO
      THE EFFECT THAT THE REGULATION S GLOBAL NOTE IS BEING TRANSFERRED (A) TO AN
“ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1),(2),(3)

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

      OR
        (7) OF
        REGULATION D 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 NOTE (THE FORM OF WHICH CAN BE OBTAINED
        FROM
        THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
        AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
        COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND
        (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
        UNITED STATES AND OTHER JURISDICTIONS.

    

     

    BENEFICIAL
      INTERESTS IN A RULE 144A GLOBAL NOTE OR AN IAI GLOBAL NOTE MAY BE TRANSFERRED
      TO
      A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S
      GLOBAL NOTE, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION
      COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A
      WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT
      THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF
      REGULATION S OR RULE 144 (IF AVAILABLE).

     

    [Definitive
      Notes Legend]

     

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

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    No.                                                                                                                                           
      $        

     

    91⁄8%
      Senior Subordinated Notes due 2015

     

    Sun
      Healthcare Group, Inc. (the "Issuer"), a Delaware corporation, promises to
      pay
      to                                                                                       ,
      or
      registered assigns, the principal sum of                                                     
      Dollars
      on April 15, 2015.

     

    Interest
      Payment Dates: April 15 and October 15.

     

    Record
      Dates: April 1 and October 1.

     

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

     

    Dated:

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

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

     

    
      	
              SUN
                HEALTHCARE GROUP, INC.

               

            
	     
By:	 
	 	
              Name:
                

              Title:
                

            

    

    

     

    TRUSTEE’S
      CERTIFICATE OF

             
      AUTHENTICATION

     

    
      	
              WELLS
                FARGO BANK, NATIONAL
ASSOCIATION,

            
	
              as
                Trustee, certifies that this is one of

                     
                the Notes referred to in the Indenture.

               

            
	      By:	 
	 	
              Authorized
                Signatory

            

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    [FORM
      OF
      REVERSE SIDE OF INITIAL SECURITY]

     

    91⁄8%
      Senior Subordinated Note due 2015

     

    
      	
              1.

            	
              Interest

            

    

     

    Sun
      Healthcare Group, Inc., 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
      Note at the rate per annum shown above; provided, however, that if a
      Registration Default (as defined in the Registration Rights Agreement) occurs,
      additional interest will accrue on this Note at a rate of $0.05 per week per
      $1,000 principal amount of Notes (increasing by an additional $0.05 per week
      per
      $1,000 principal amount of Notes after each consecutive 90-day period that
      occurs after the date on which such Registration default occurs up to a maximum
      additional interest rate of $0.20 per week per $1,000 principal amount of Notes)
      from and including the date on which any such Registration Default shall occur
      to but excluding the date on which all Registration Defaults have been cured.
      The Company will pay interest semiannually on April 15 and October 15 of each
      year, commencing October 15, 2007. Interest on the Notes will accrue from the
      most recent date to which interest has been paid or, if no interest has been
      paid, from April 12, 2007. Interest will be computed on the basis of a 360-day
      year of twelve 30-day months. 

     

    
      	
              2.

            	
              Method
                of Payment

            

    

     

    The
      Company will pay interest on the Notes (except defaulted interest) to the
      Persons who are registered holders of Notes at the close of business on the
      April 1 or October 1 next preceding the interest payment date even if Notes
      are
      canceled after the record date and on or before the interest payment date.
      Holders must surrender Notes to a Paying Agent to collect principal payments.
      The Company will pay principal and interest in money of the United States that
      at the time of payment is legal tender for payment of public and private debts.
      Payments in respect of the Notes represented by a Global Note (including
      principal, premium and interest) will be made by wire transfer of immediately
      available funds to the accounts specified by The Depository Trust Company.
      The
      Company will make all payments in respect of a certificated Note (including
      principal, premium and interest) by mailing a check to the registered address
      of
      each Holder thereof; provided,
      however,
      that
      payments on a certificated Note will be made 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,
      Wells Fargo Bank, National Association (the “Trustee”), will act as Paying Agent
      and Registrar. The Company may appoint and change any Paying Agent, Registrar
      or
      co-registrar without notice. The Company or any of its domestically

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

      incorporated
        Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
        co-registrar.

    

     

    
      	
              4.

            	
              Indenture

            

    

     

    The
      Company issued the Notes under an Indenture dated as of April 12, 2007 (the
      “Indenture”), among the Company, the Trustee and the Subsidiary Guarantors. The
      terms of the Notes include those stated in the Indenture and those made part
      of
      the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.§§ 77aaa-77bbbb)
      (the “Act”). Terms defined in the Indenture and not defined herein have the
      meanings ascribed thereto in the Indenture. The Notes are subject to all such
      terms, and Noteholders are referred to the Indenture and the Act for a statement
      of those terms.

     

    The
      Notes
      are unsecured senior subordinated obligations of the Company. The Company shall
      be entitled, subject to its compliance with Section 4.03 of the Indenture,
      to issue Additional Notes pursuant to Section 2.14 of the Indenture. The
      Initial Notes issued on the Issue Date, any Additional Notes and all Exchange
      Notes or Private Exchange Notes issued in exchange therefor will be treated
      as a
      single class for all purposes under the Indenture. The Indenture contains
      covenants that limit the ability of the Company and its subsidiaries to incur
      additional indebtedness; pay dividends or distributions on, or redeem or
      repurchase, capital stock; make investments; issue or sell capital stock of
      subsidiaries; engage in transactions with affiliates; create liens on assets;
      transfer or sell assets; guarantee indebtedness; restrict dividends or other
      payments of subsidiaries; and consolidate, merge or transfer all or
      substantially all of its assets and the assets of its subsidiaries. These
      covenants are subject to important exceptions and qualifications.

     

    
      	
              5.

            	
              Optional
                Redemption

            

    

     

    Except
      as
      set forth below, the Company shall not be entitled to redeem the Notes at its
      option prior to April 15 , 2011.

     

    On
      and
      after April 15, 2011, the Company shall be entitled at its option to redeem
      all
      or a portion of the Notes upon not less than 30 nor more than 60 days’
notice, at the redemption prices (expressed in percentages of principal amount
      on the redemption date), plus accrued interest to the redemption date (subject
      to the right of Holders of record on the relevant record date to receive
      interest due on the relevant interest payment date), if redeemed during the
      12-month period commencing on April 15 of the years set forth
      below:

     

    
      	
              Period

            	
              Redemption

              Price

            
	
              2011

            	
              104.563%

            
	
              2012

            	
              102.281%

            
	
              2013
                and thereafter

            	
              100.00%

            

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    In
      addition, prior to April 15, 2010, the Company shall be entitled at its option
      on one or more occasions to redeem Notes in an aggregate principal amount not
      to
      exceed 35% of the aggregate principal amount of the Notes issued at a redemption
      price (expressed as a percentage of principal amount) of 109.125%, plus accrued
      and unpaid interest to the redemption date, with the net cash proceeds from
      one
      or more Public Equity Offerings; provided,
      however,
      that
      (1) at least 65% of such aggregate principal amount of Notes remains
      outstanding immediately after the occurrence of each such redemption (other
      than
      Notes held, directly or indirectly, by the Company or its Affiliates); and
      (2) each such redemption occurs within 90 days after the date of the
      related Public Equity Offering.

     

    Prior
      to
      April 15, 2011, the Company shall be entitled at its option to redeem all,
      but
      not less than all, of the Notes at a redemption price equal to 100.00% of the
      principal amount of the Notes plus the Applicable Premium as of, and accrued
      and
      unpaid interest to, the redemption date (subject to the right of Holders on
      the
      relevant record date to receive interest due on the relevant interest payment
      date). The Company shall cause notice of such redemption to be mailed by
      first-class mail to each Holder’s registered address, not less than 30 nor more
      than 60 days prior to the redemption date.

     

    
      	
              6.

            	
              Notice
                of Redemption

            

    

     

    Notice
      of
      redemption will be mailed at least 30 days but not more than 60 days before
      the
      redemption date to each Holder of Notes to be redeemed at his registered
      address. Notes in denominations larger than $2,000 principal amount may be
      redeemed in part but only in whole multiples of $1,000. If money sufficient
      to
      pay the redemption price of and accrued interest on all Notes (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 Notes (or
      such portions thereof) called for redemption.

     

    
      	
              7.

            	
              Put
                Provisions

            

    

     

    Upon
      a
      Change of Control, any Holder of Notes will have the right to cause the Company
      to repurchase all or any part of the Notes of such Holder at a repurchase price
      equal to 101% of the principal amount of the Notes to be repurchased plus
      accrued interest to the date of repurchase (subject to the right of holders
      of
      record on the relevant record date to receive interest due on the related
      interest payment date) as provided in, and subject to the terms of, the
      Indenture.

     

    
      	
              8.

            	
              Special
                Mandatory Redemption

            

    

     

    In
      the
      event the Merger is not consummated and the conditions to the release of the
      Escrow Funds, in accordance with the Escrow Agreement, are not met on or prior
      to July 11, 2007 or the Merger Agreement is terminated in accordance with its
      terms at any time prior thereto, the Company shall redeem the Notes at a
      redemption price of 100.00% of the aggregate principal amount of the Notes,
      plus
      accrued and unpaid interest to the redemption date (the “Special Redemption
      Provision”). If the Special 

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

      Redemption
        Provision is triggered, the Company will cause the notice of special mandatory
        redemption to be mailed to each Holder no later than the third Business Day
        following July 11, 2007 or following the date the Merger Agreement is
        terminated, as applicable, and the Notes shall be redeemed with the Escrow
        Funds
        five Business Days following the date of the mailing of such notice of
        redemption.

    

     

    The
      obligation to redeem the Notes pursuant to the Special Redemption Provision
      may
      not be waived or modified without the written consent of each Holder. Failure
      to
      redeem the Notes when required pursuant to the Special Redemption Provision
      will
      constitute an Event of Default with respect to the Notes.

     

    
      	
              9.

            	
              Guaranty

            

    

     

    The
      payment by the Company of the principal of, and premium and interest on, the
      Notes is fully and unconditionally guaranteed on a joint and several senior
      subordinated basis by each of the Subsidiary Guarantors to the extent set forth
      in the Indenture.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
      	
              10.

            	 Subordination

    

     

    The
      Notes
      are subordinated in right of payment to all existing and future Senior
      Indebtedness of the Company and the Subsidiary Guarantors on the terms and
      subject to the conditions set forth in the Indenture. To the extent provided
      in
      the Indenture, Senior Indebtedness must be paid before the Notes may be paid.
      Each Noteholder by accepting a Note 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.

     

    
      	
              11.

            	
              Denominations;
                Transfer; Exchange

            

    

     

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

     

    
      	
              12.

            	
              Persons
                Deemed Owners

            

    

     

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

     

    
      	
              13.

            	
              Unclaimed
                Money

            

    

     

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

     

    
      	
              14.

            	
              Discharge
                and Defeasance

            

    

     

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

     

    
      	
              15.

            	
              Amendment,
                Waiver

            

    

     

    Subject
      to certain exceptions set forth in the Indenture, (a) the Indenture and the
      Notes may be amended with the written consent of the Holders of at least a
      majority in principal amount outstanding of the Notes and (b) any default
      or noncompliance with any provision may be waived with the written consent
      of
      the 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

      Holders
        of a majority in principal amount outstanding of the Notes. Subject to certain
        exceptions set forth in the Indenture, without the consent of any Noteholder,
        the Company, the Subsidiary Guarantors and the Trustee shall be entitled
        to
        amend the Indenture or the Notes to cure any ambiguity, omission, defect
        or
        inconsistency, or to comply with Article Five of the Indenture, or to
        provide for uncertificated Notes in addition to or in place of certificated
        Notes, or to add guarantees with respect to the Notes, including Subsidiary
        Guaranties, or to secure the Notes, or to add additional covenants or surrender
        rights and powers conferred on the Company or the Subsidiary Guarantors,
        or to
        comply with any requirement of the SEC in connection with effecting or
        maintaining the qualification of the Indenture under the Act, or to make
        any
        change that does not adversely affect the rights of any Noteholder, or to
        make
        amendments to provisions of the Indenture relating to the form, authentication,
        transfer and legending of the Notes, or to conform the text of the Indenture
        or
        the Notes to any provision set forth in the offering circular, dated March
        22,
        2007, relating to the Notes, or to provide for the issuance of Additional
        Notes
        in accordance with the limitations set forth in the Indenture as of the date
        of
        the Indenture.

    

     

    
      	
              16.

            	
              Defaults
                and Remedies

            

    

     

    Under
      the
      Indenture, Events of Default include: default for 30 days in payment of
      interest on the Notes; default in payment of principal on the Notes at maturity,
      upon redemption pursuant to paragraph 5 of the Notes, upon acceleration or
      otherwise, or failure by the Company to redeem or purchase Notes when required;
      failure by the Company or any Subsidiary Guarantor to comply with other
      agreements in the Indenture or the Notes, in certain cases subject to notice
      and
      lapse of time; certain accelerations (including failure to pay within any grace
      period after final maturity) of other Indebtedness of the Company, any
      Subsidiary Guarantor or any Significant Subsidiary if the amount accelerated
      (or
      so unpaid) exceeds $15.0 million; certain events of bankruptcy or
      insolvency with respect to the Company and the Significant Subsidiaries; certain
      judgments or decrees for the payment of money in excess of $15.0 million;
      and certain defaults with respect to Subsidiary Guaranties. If an Event of
      Default occurs and is continuing, the Trustee or the Holders of at least 25%
      in
      principal amount of the Notes may declare all the Notes to be due and payable
      immediately. Certain events of bankruptcy or insolvency are Events of Default
      which will result in the Notes being due and payable immediately upon the
      occurrence of such Events of Default.

     

    Noteholders
      may not enforce the Indenture or the Notes except as provided in the Indenture.
      The Trustee may refuse to enforce the Indenture or the Notes unless it receives
      indemnity or security satisfactory to it. Subject to certain limitations,
      Holders of a majority in principal amount of the Notes may direct the Trustee
      in
      its exercise of any trust or power. The Trustee may withhold from Noteholders
      notice of any continuing Default (except a Default in payment of principal
      or
      interest) if it determines that withholding notice is in the interest of the
      Holders.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
              17.

            	
              Trustee
                Dealings with the Company

            

    

     

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

     

    
      	
              18.

            	
              No
                Recourse Against Others

            

    

     

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

     

    
      	
              19.

            	
              Authentication

            

    

     

    This
      Note
      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 Note.

     

    
      	
              20.

            	
              Abbreviations

            

    

     

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

     

    
      	
              21.

            	
              CUSIP
                Numbers

            

    

     

    Pursuant
      to a recommendation promulgated by the Committee on Uniform Note Identification
      Procedures the Company has caused CUSIP numbers to be printed on the Notes
      and
      has directed the Trustee to use CUSIP numbers in notices of redemption as a
      convenience to Noteholders. No representation is made as to the accuracy of
      such
      numbers either as printed on the Notes or as contained in any notice of
      redemption and reliance may be placed only on the other identification numbers
      placed thereon.

     

    
      	
              22.

            	
              Holders’
                Compliance with Registration Rights
                Agreement

            

    

     

    Each
      Holder of a Note, by acceptance hereof, acknowledges and agrees to the
      provisions of the Registration Rights Agreement, including the obligations
      of
      the Holders with respect to a registration and the indemnification of the
      Company to the extent provided therein.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
      	
              23.

            	
              Governing
                Law

            

    

     

    THIS
      SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
      THE
      STATE OF NEW YORK.

     

    The
      Company will furnish to any Noteholder upon written request and without charge
      to the Noteholder a copy of the Indenture which has in it the text of this
      Note
      in larger type. Requests may be made to:

     

    Sun
      Healthcare Group, Inc..

    18831
      Von
      Karman, Suite 400

    Irvine,
      CA 92612

    Attention:
      General Counsel

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

     

      
        

      

    

     

    ASSIGNMENT
      FORM

     

    To
      assign
      this Note, fill in the form below:

     

    I
      or we
      assign and transfer this Note 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 Note 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 Note.

     

    In
      connection with any transfer of any of the Notes evidenced by this certificate
      occurring prior to the expiration of the period referred to in Rule 144(k)
      under the Securities Act after the later of the date of original issuance of
      such Notes and the last date, if any, on which such Notes were owned by the
      Company or any Affiliate of the Company, the undersigned confirms that such
      Notes are being transferred in accordance with its terms:

     

    CHECK
      ONE
      BOX BELOW

     

    
      	
              (1)

            	 	
               ̈
                to
                the Company; or

            

    

     

    
      	
              (2)

            	 	
               ̈
                pursuant to an effective registration statement under the Securities
                Act
                of 1933; or

            

    

     

    
      	
              (3)

            	 	
               ̈
                inside the United States to a “qualified institutional buyer” (as defined
                in Rule 144A under the Securities Act of 1933) that purchases for its
                own account or for the account of a qualified institutional buyer
                to whom
                notice is given that such transfer is being made in reliance on Rule
                144A,
                in each case pursuant to and in compliance with Rule 144A under the
                Securities Act of 1933; or

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    
      	
              (4)

            	 	
               ̈
                outside the United States in an offshore transaction within the meaning
                of
                Regulation S under the Securities Act in compliance with Rule 904
                under the Securities Act of 1933;
                or

            

    

     

    
      	
              (5)

            	 	
               ̈
                pursuant to the exemption from registration provided by Rule 144
                under the
                Securities Act of 1933; or

            

    

     

    
      	
              (6)

            	 	
               ̈
                to
                an institutional “accredited investor” (as defined in Rule
                501(a)(1),(2),(3) or (7) under the Securities Act of 1933) that has
                furnished to the Trustee a signed letter containing certain
                representations and agreements.

            

      	 	 	 

      	 	 	 Unless
              one of the boxes is checked, the Trustee will refuse to register any
              of
              the Notes evidenced by this certificate in the name of any person other
              than the registered holder thereof; provided, however, that if box
              (4) is
              checked, the Trustee shall be entitled to require, prior to registering
              any such transfer of the Notes, such legal opinions, certifications
              and
              other information as the Company has reasonably requested to confirm
              that
              such transfer is being made pursuant to an exemption from, or in a
              transaction not subject to, the registration requirements of the
              Securities Act of 1933, such as the exemption provided by Rule 144
              under such Act.

    

     

     

    
      	 __________________________
	
              Signature

            

    

    

     

    Signature
      Guarantee:

     

    
      	 __________________________	 __________________________
	
              Signature
                must be guaranteed

            	
              Signature

            

    

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    Signatures
      must be guaranteed by an “eligible guarantor institution” meeting the
      requirements of the Registrar, which requirements include membership or
      participation in the Note Transfer Agent Medallion Program (“STAMP”) or such
      other “signature guarantee program” as may be determined by the Registrar in
      addition to, or in substitution for, STAMP, all in accordance with the
      Securities Exchange Act of 1934, as amended.

    
 

    
      

    

     

     

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

     

    The
      undersigned represents and warrants that it is purchasing this Note for its
      own
      account or an account with respect to which it exercises sole investment
      discretion and that it and any such account is a “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act of 1933, and is
      aware that the sale to it is being made in reliance on Rule 144A and
      acknowledges that it has received such information regarding the Company as
      the
      undersigned has requested pursuant to Rule 144A or has determined not to
      request such information and that it is aware that the transferor is relying
      upon the undersigned’s foregoing representations in order to claim the exemption
      from registration provided by Rule 144A.

     

    
      	
              Dated: 
                _____________________

            	 	 ____________________________
	 	 	
              Notice: To
                be executed by

              an
                executive officer

            

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    [TO
      BE
      ATTACHED TO GLOBAL SECURITIES]

     

    SCHEDULE
      OF INCREASES OR DECREASES IN GLOBAL SECURITY

     

    The
      following increases or decreases in this Global Note have been
      made:

     

    
      	
              Date
                of

              Exchange

            	
              Amount
                of
decrease in
Principal 
amount of this
Global
                Note

            	
              Amount
                of 
increase in 
Principal 
amount of this 
Global
                Note

            	
              Principal
amount
                of this 
Global Note 
following such 
decrease
                or
increase)

            	
              Signature
                of
authorized
officer of 
Trustee or Notes
                
Custodian

            

    

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    OPTION
      OF
      HOLDER TO ELECT PURCHASE

     

    If
      you
      want to elect to have this Note purchased by the Company pursuant to
      Section 4.06 or 4.10 of the Indenture, check the box: 
[      ]

     

    If
      you
      want to elect to have only part of this Note purchased by the Company pursuant
      to Section 4.06 or 4.10 of the Indenture, state the amount in principal
      amount: $___________

     

    
      	
              Dated:
                __________________

            	 	
              Your
                Signature: ___________________

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

            

    

    

     

    
      	
              Signature
                Guarantee: 
                _________________________________________________

            
	
              (Signature
                must be guaranteed)

            

    

    

     

    Signatures
      must be guaranteed by an “eligible guarantor institution” meeting the
      requirements of the Registrar, which requirements include membership or
      participation in the Note Transfer Agent Medallion Program (“STAMP”) or such
      other “signature guarantee program” as may be determined by the Registrar in
      addition to, or in substitution for, STAMP, all in accordance with the
      Securities Exchange Act of 1934, as amended.

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    EXHIBIT
      2

     

    [FORM
      OF
      FACE OF EXCHANGE NOTE

     

    OR
      PRIVATE EXCHANGE NOTE]*/**/

     

    

     

     

     

     

     

     

     

     

     

     

    __________________________________

     

    */
      If the
      Note is to be issued in global form add the Global Notes Legend from Exhibit
      1
      to Appendix A and the attachment from such Exhibit 1 captioned “[TO BE ATTACHED
      TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE”.

     

    **/
      If the
      Note is a Private Exchange Note issued in a Private Exchange to an Initial
      Purchaser holding an unsold portion of its initial allotment, add the Restricted
      Notes Legend from Exhibit 1 to Appendix A and replace the Assignment Form
      included in this Exhibit 2 with the Assignment Form included in such Exhibit
      1.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    No.                                                                                                                                                       
       $       

     

    91⁄8%
      Senior Subordinated Notes due 2015

     

    Sun
      Healthcare Group, Inc., a Delaware corporation, promises to pay to                                                               ,
      or
      registered assigns, the principal sum of                       
      Dollars
      on April 15, 2015.

     

    Interest
      Payment Dates: April 15 and October 15.

     

    Record
      Dates: April 1 and October 1.

     

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

     

    Dated:

     

    
      	
              SUN
                HEALTHCARE GROUP, INC.

               

            
	
                

            
	
              By

            	 
	 	
              Name: 

              Title:   

            

    

    

     

    

     

    TRUSTEE’S
      CERTIFICATE OF

                  
      AUTHENTICATION

     

    
      	
              WELLS
                FARGO BANK, NATIONAL

                          
                ASSOCIATION,

            
	
              as
                Trustee, certifies that this is one of

                   
                the Notes referred to in the Indenture.

            
	
                

            
	
               By

            	 
	 	
              Authorized
                Signatory

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    [FORM
      OF
      REVERSE SIDE OF EXCHANGE NOTE

     

    OR
      PRIVATE EXCHANGE NOTE]

     

    91⁄8%
      Senior Subordinated Note due 2015

     

    
      	
              1.

            	
              Interest

            

    

     

    Sun
      Healthcare Group, Inc., 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
      Note at the rate per annum shown above[; provided, however, that if a
      Registration Default (as defined in the Registration Rights Agreement) occurs,
      additional interest will accrue on this Note at a rate of $0.05 per week per
      $1,000 principal amount of Notes (increasing by an additional $0.05 per week
      per
      $1,000 principal amount of Notes after each consecutive 90-day period that
      occurs after the date on which such Registration default occurs up to a maximum
      additional interest rate of $0.20 per week per $1,000 principal amount of Notes)
      from and including the date on which any such Registration Default shall occur
      to but excluding the date on which all Registration Defaults have been
      cured.]1 
      The
      Company will pay interest semiannually on April 15 and October 15 of each year,
      commencing October 15, 2007. Interest on the Notes will accrue from the most
      recent date to which interest has been paid or, if no interest has been paid,
      from April 12, 2007. Interest will be computed on the basis of a 360-day year
      of
      twelve 30-day months. 

     

    
      	
              2.

            	
              Method
                of Payment

            

    

     

    The
      Company will pay interest on the Notes (except defaulted interest) to the
      Persons who are registered holders of Notes at the close of business on the
      April 1 or October 1 next preceding the interest payment date even if Notes
      are
      canceled after the record date and on or before the interest payment date.
      Holders must surrender Notes to a Paying Agent to collect principal payments.
      The Company will pay principal and interest in money of the United States that
      at the time of payment is legal tender for payment of public and private debts.
      Payments in respect of the Notes represented by a Global Note (including
      principal, premium and interest) will be made by wire transfer of immediately
      available funds to the accounts specified by The Depository Trust Company.
      The
      Company will make all payments in respect of a certificated Note (including
      principal, premium and interest) by mailing a check to the registered address
      of
      each Holder thereof; provided,
      however,
      that
      payments on a certificated Note will be made 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).

     

    
      
        ________________________________

         

        1 Insert
          if
          at the date of issuance of the Exchange Note or Private Exchange Note (as
          the
          case may be), any Registration Default has occurred with respect to the
          related
          Initial Notes during the interest period in which such date of issuance
          occurs.

      

      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
              3.

            	
              Paying
                Agent and Registrar

            

    

     

    Initially,
      Wells Fargo Bank, National Association (the “Trustee”), will act as Paying Agent
      and Registrar. The Company may appoint and change any Paying Agent, Registrar
      or
      co-registrar without notice. The Company or any of its domestically incorporated
      Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
      co-registrar.

     

    
      	
              4.

            	
              Indenture

            

    

     

    The
      Company issued the Notes under an Indenture dated as of April 12, 2007 (the
      “Indenture”), among the Company, the Trustee and the Subsidiary Guarantors. The
      terms of the Notes include those stated in the Indenture and those made part
      of
      the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.§§ 77aaa-77bbbb)
      (the “Act”). Terms defined in the Indenture and not defined herein have the
      meanings ascribed thereto in the Indenture. The Notes are subject to all such
      terms, and Noteholders are referred to the Indenture and the Act for a statement
      of those terms.

     

    The
      Notes
      are unsecured senior subordinated obligations of the Company. The Company shall
      be entitled, subject to its compliance with Section 4.03 of the Indenture,
      to issue Additional Notes pursuant to Section 2.14 of the Indenture. The
      Initial Notes issued on the Issue Date, any Additional Notes and all Exchange
      Notes or Private Exchange Notes issued in exchange therefor will be treated
      as a
      single class for all purposes under the Indenture. The Indenture contains
      covenants that limit the ability of the Company and its subsidiaries to incur
      additional indebtedness; pay dividends or distributions on, or redeem or
      repurchase, capital stock; make investments; issue or sell capital stock of
      subsidiaries; engage in transactions with affiliates; create liens on assets;
      transfer or sell assets; guarantee indebtedness; restrict dividends or other
      payments of subsidiaries; and consolidate, merge or transfer all or
      substantially all of its assets and the assets of its subsidiaries. These
      covenants are subject to important exceptions and qualifications.

     

    
      	
              5.

            	
              Optional
                Redemption

            

    

     

    Except
      as
      set forth below, the Company shall not be entitled to redeem the Notes at its
      option prior to April 15, 2011.

     

    On
      and
      after April 15, 2011, the Company shall be entitled at its option to redeem
      all
      or a portion of the Notes upon not less than 30 nor more than 60 days’
notice, at the redemption prices (expressed in percentages of principal amount
      on the redemption date), plus accrued interest to the redemption date (subject
      to the right of Holders of record on the relevant record date to receive
      interest due on the relevant interest payment date), if redeemed during the
      12-month period commencing on April 15 of the years set forth
      below:

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              Period

            	
              Redemption

              Price

            
	
              2011

            	
              104.563%

            
	
              2012

            	
              102.281%

            
	
              2012
                and thereafter

            	
              100.00%

            

    

    

     

    In
      addition, prior to April 15, 2010, the Company shall be entitled at its option
      on one or more occasions to redeem Notes in an aggregate principal amount not
      to
      exceed 35% of the aggregate principal amount of the Notes issued at a redemption
      price (expressed as a percentage of principal amount) of 109.125%, plus accrued
      and unpaid interest to the redemption date, with the net cash proceeds from
      one
      or more Public Equity Offerings; provided,
      however,
      that
      (1) at least 65% of such aggregate principal amount of Notes remains
      outstanding immediately after the occurrence of each such redemption (other
      than
      Notes held, directly or indirectly, by the Company or its Affiliates); and
      (2) each such redemption occurs within 90 days after the date of the
      related Public Equity Offering.

     

    Prior
      to
      April 15, 2011, the Company shall be entitled at its option to redeem all or
      a
      portion of the Notes at a redemption price equal to 100.00% of the principal
      amount of the Notes plus the Applicable Premium as of, and accrued and unpaid
      interest to, the redemption date (subject to the right of Holders on the
      relevant record date to receive interest due on the relevant interest payment
      date). The Company shall cause notice of such redemption to be mailed by
      first-class mail to each Holder’s registered address, not less than 30 nor more
      than 60 days prior to the redemption date.

     

    
      	
              6.

            	
              Notice
                of Redemption

            

    

     

    Notice
      of
      redemption will be mailed at least 30 days but not more than 60 days before
      the
      redemption date to each Holder of Notes to be redeemed at his registered
      address. Notes in denominations larger than $2,000 principal amount may be
      redeemed in part but only in whole multiples of $1,000. If money sufficient
      to
      pay the redemption price of and accrued interest on all Notes (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 Notes (or
      such portions thereof) called for redemption.

     

    
      	
              7.

            	
              Put
                Provisions

            

    

     

    Upon
      a
      Change of Control, any Holder of Notes will have the right to cause the Company
      to repurchase all or any part of the Notes of such Holder at a repurchase price
      equal to 101% of the principal amount of the Notes to be repurchased plus
      accrued interest to the date of repurchase (subject to the right of holders
      of
      record on the relevant record date to receive interest due on the related
      interest payment date) as provided in, and subject to the terms of, the
      Indenture.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	
              8.

            	 Special Mandatory
              Redemption

    

     

    In
      the
      event the Merger is not consummated and the conditions to the release of the
      Escrow Funds, in accordance with the Escrow Agreement, are not met on or prior
      to July 11, 2007 or the Merger Agreement is terminated in accordance with its
      terms at any time prior thereto, the Company shall redeem the Notes at a
      redemption price of 100.00% of the aggregate principal amount of the Notes,
      plus
      accrued and unpaid interest to the redemption date (the “Special Redemption
      Provision”). If the Special Redemption Provision is triggered, the Company will
      cause the notice of special mandatory redemption to be mailed to each Holder
      no
      later than the third Business Day following July 11, 2007 or following the
      date
      the Merger Agreement is terminated, as applicable, and the Notes shall be
      redeemed with the Escrow Funds five Business Days following the date of the
      mailing of such notice of redemption.

     

    The
      obligation to redeem the Notes pursuant to the Special Redemption Provision
      may
      not be waived or modified without the written consent of each Holder. Failure
      to
      redeem the Notes when required pursuant to the Special Redemption Provision
      will
      constitute an Event of Default with respect to the Notes.

     

    
      	
              9.

            	
              Guaranty

            

    

     

    The
      payment by the Company of the principal of, and premium and interest on, the
      Notes is fully and unconditionally guaranteed on a joint and several senior
      subordinated basis by each of the Subsidiary Guarantors to the extent set forth
      in the Indenture.

     

    
      	
              10.

            	
              Subordination

            

    

     

    The
      Notes
      are subordinated in right of payment to all existing and future Senior
      Indebtedness of the Company and the Subsidiary Guarantors on the terms and
      subject to the conditions set forth in the Indenture. To the extent provided
      in
      the Indenture, Senior Indebtedness must be paid before the Notes may be paid.
      Each Noteholder by accepting a Note 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.

     

    
      	
              11.

            	
              Denominations;
                Transfer; Exchange

            

    

     

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

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              12.

            	
              Persons
                Deemed Owners

            

    

     

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

     

    
      	
              13.

            	
              Unclaimed
                Money

            

    

     

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

     

    
      	
              14.

            	
              Discharge
                and Defeasance

            

    

     

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

     

    
      	
              15.

            	
              Amendment,
                Waiver

            

    

     

    Subject
      to certain exceptions set forth in the Indenture, (a) the Indenture and the
      Notes may be amended with the written consent of the Holders of at least a
      majority in principal amount outstanding of the Notes and (b) any default
      or noncompliance with any provision may be waived with the written consent
      of
      the Holders of a majority in principal amount outstanding of the Notes. Subject
      to certain exceptions set forth in the Indenture, without the consent of any
      Noteholder, the Company, the Subsidiary Guarantors and the Trustee shall be
      entitled to amend the Indenture or the Notes to cure any ambiguity, omission,
      defect or inconsistency, or to comply with Article Five of the Indenture,
      or to provide for uncertificated Notes in addition to or in place of
      certificated Notes, or to add guarantees with respect to the Notes, including
      Subsidiary Guaranties, or to secure the Notes, or to add additional covenants
      or
      surrender rights and powers conferred on the Company or the Subsidiary
      Guarantors, or to comply with any requirement of the SEC in connection with
      effecting or maintaining the qualification of the Indenture under the Act,
      or to
      make any change that does not adversely affect the rights of any Noteholder,
      or
      to make amendments to provisions of the Indenture relating to the form,
      authentication, transfer and legending of the Notes, or to conform the text
      of
      the Indenture or the Notes to any provision set forth in the offering circular,
      dated March 22, 2007 relating to the Notes, or to provide for the issuance
      of
      Additional Notes in accordance with the limitations set forth in the Indenture
      as of the date of the Indenture.

     

    
      	
              16.

            	
              Defaults
                and Remedies

            

    

     

    Under
      the
      Indenture, Events of Default include: default for 30 days in payment of
      interest on the Notes; default in payment of principal on the Notes at maturity,
      upon redemption pursuant to paragraph 5 of the Notes, upon acceleration or

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

      otherwise,
        or failure by the Company to redeem or purchase Notes when required; failure
        by
        the Company or any Subsidiary Guarantor to comply with other agreements in
        the
        Indenture or the Notes, in certain cases subject to notice and lapse of time;
        certain accelerations (including failure to pay within any grace period after
        final maturity) of other Indebtedness of the Company, any Subsidiary Guarantor
        or any Significant Subsidiary if the amount accelerated (or so unpaid) exceeds
        $15.0 million; certain events of bankruptcy or insolvency with respect to
        the Company and the Significant Subsidiaries; certain judgments or decrees
        for
        the payment of money in excess of $15.0 million; and certain defaults with
        respect to Subsidiary Guaranties. If an Event of Default occurs and is
        continuing, the Trustee or the Holders of at least 25% in principal amount
        of
        the Notes may declare all the Notes to be due and payable immediately. Certain
        events of bankruptcy or insolvency are Events of Default which will result
        in
        the Notes being due and payable immediately upon the occurrence of such Events
        of Default.

    

     

    Noteholders
      may not enforce the Indenture or the Notes except as provided in the Indenture.
      The Trustee may refuse to enforce the Indenture or the Notes unless it receives
      indemnity or security satisfactory to it. Subject to certain limitations,
      Holders of a majority in principal amount of the Notes may direct the Trustee
      in
      its exercise of any trust or power. The Trustee may withhold from Noteholders
      notice of any continuing Default (except a Default in payment of principal
      or
      interest) if it determines that withholding notice is in the interest of the
      Holders.

     

    
      	
              17.

            	
              Trustee
                Dealings with the Company

            

    

     

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

     

    
      	
              18.

            	
              No
                Recourse Against Others

            

    

     

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

     

    
      	
              19.

            	
              Authentication

            

    

     

    This
      Note
      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 Note.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              20.

            	
              Abbreviations

            

    

     

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

     

    
      	
              21.

            	
              CUSIP
                Numbers

            

    

     

    Pursuant
      to a recommendation promulgated by the Committee on Uniform Note Identification
      Procedures the Company has caused CUSIP numbers to be printed on the Notes
      and
      has directed the Trustee to use CUSIP numbers in notices of redemption as a
      convenience to Noteholders. No representation is made as to the accuracy of
      such
      numbers either as printed on the Notes or as contained in any notice of
      redemption and reliance may be placed only on the other identification numbers
      placed thereon.

     

    
      	
              22.

            	
              Holders’
                Compliance with Registration Rights
                Agreement

            

    

     

    Each
      Holder of a Note, by acceptance hereof, acknowledges and agrees to the
      provisions of the Registration Rights Agreement, including the obligations
      of
      the Holders with respect to a registration and the indemnification of the
      Company to the extent provided therein.

     

    
      	
              23.

            	
              Governing
                Law

            

    

     

    THIS
      SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
      THE
      STATE OF NEW YORK.

     

    The
      Company will furnish to any Noteholder upon written request and without charge
      to the Noteholder a copy of the Indenture which has in it the text of this
      Note
      in larger type. Requests may be made to:

    Sun
      Healthcare Group, Inc.

    18831
      Von
      Karman, Suite 400

    Irvine,
      CA 92612

    Attention:
      General Counsel

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      
        

      

    

     

    ASSIGNMENT
      FORM

     

    To
      assign
      this Note, fill in the form below:

     

    I
      or we
      assign and transfer this Note 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 Note 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 Note.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

      
        OPTION
          OF
          HOLDER TO ELECT PURCHASE

      

    

     

    If
      you
      want to elect to have this Note purchased by the Company pursuant to
      Section 4.06 or
      4.10
      of the Indenture, check the box: [    ]

     

    If
      you
      want to elect to have only part of this Note purchased by the Company pursuant
      to Section 4.06 or 4.10 of the Indenture, state the amount in principal
      amount: $[     ]

     

    
      	
              Dated:
                ____________________

            	 	
              Your
                Signature: _______________________________

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

            

    

    

     

    
      	
              Signature
                Guarantee: 
                _______________________________________________

            
	
              (Signature
                must be guaranteed)

            

    

    

     

    Signatures
      must be guaranteed by an “eligible guarantor institution” meeting the
      requirements of the Registrar, which requirements include membership or
      participation in the Note Transfer Agent Medallion Program (“STAMP”) or such
      other “signature guarantee program” as may be determined by the Registrar in
      addition to, or in substitution for, STAMP, all in accordance with the
      Securities Exchange Act of 1934, as amended.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      3

    to

    RULE
      144A/REGULATION S/IAI APPENDIX

     

    Form
      of

    Transferee
      Letter of Representation

     

    

     

    Sun
      Healthcare Group, Inc.

     

    In
      care
      of

    [          ]

    [          ]

    [          ]

     

    Ladies
      and Gentlemen:

     

    This
      certificate is delivered to request a transfer of
      $[     ] principal amount of the 91⁄8% Senior
      Subordinated due 2015 (the “Notes”) of Sun Healthcare Group, Inc. (the
“Company”).

     

    Upon
      transfer, the Notes would be registered in the name of the new beneficial owner
      as follows:

     

    Name:________________________

     

    Address:______________________

     

    Taxpayer
      ID Number:____________

     

    The
      undersigned represents and warrants to you that:

     

    1.
      We are
      an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3)
      or (7) under the Securities Act of 1933, as amended (the “Securities Act”)),
      purchasing for our own account or for the account of such an institutional
      “accredited investor” at least $250,000 principal amount of the Notes, and we
      are acquiring the Notes not with a view to, or for offer or sale in connection
      with, any distribution in violation of the Securities Act. We have such
      knowledge and experience in financial and business matters as to be capable
      of
      evaluating the merits and risks of our investment in the Notes, and we invest
      in
      or purchase securities similar to the Notes in the normal course of our
      business. We, and any accounts for which we are acting, are each able to bear
      the economic risk of our or its investment.

     

    2.
      We
      understand that the Notes have not been registered under the Securities Act
      and,
      unless so registered, may not be sold except as permitted in the following
      sentence. We agree on our own behalf and on behalf of any investor account
      for
      which we are purchasing Notes to offer, sell or otherwise transfer such Notes
      prior to the date that is 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      two
        years
        after the later of the date of original issue and the last date on which
        the
        Company or any affiliate of the Company was the owner of such Notes (or any
        predecessor thereto) (the “Resale Restriction Termination Date”) only (i) to the
        Company, (ii) in the United States to a person whom the seller reasonably
        believes is a qualified institutional buyer in a transaction meeting the
        requirements of Rule 144A, (iii) to an institutional “accredited investor”
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities
        Act that is an institutional accredited investor purchasing for its own account
        or for the account of an institutional accredited investor, in each case
        in a
        minimum principal amount of the Notes of $250,000, (iv) outside the United
        States in a transaction complying with the provisions of Rule 904 under the
        Securities Act, (v) pursuant to an exemption from registration under the
        Securities Act provided by Rule 144 (if available) or (vi) pursuant to an
        effective registration statement under the Securities Act, in each of cases
        (i)
        through (vi) subject to any requirement of law that the disposition of our
        property or the property of such investor account or accounts be at all times
        within our or their control and in compliance with any applicable state
        securities laws. The foregoing restrictions on resale will not apply subsequent
        to the Resale Restriction Termination Date. If any resale or other transfer
        of
        the Notes is proposed to be made pursuant to clause (iii) above prior to
        the Resale Restriction Termination Date, the transferor shall deliver a letter
        from the transferee substantially in the form of this letter to the Company
        and
        the Trustee, which shall provide, among other things, that the transferee
        is an
        institutional “accredited investor” within the meaning of Rule 501(a)(1),
        (2), (3) or (7) under the Securities Act and that it is acquiring such Notes
        for
        investment purposes and not for distribution in violation of the Securities
        Act.
        Each purchaser acknowledges that the Company and the Trustee reserve the
        right
        prior to the offer, sale or other transfer prior to the Resale Restriction
        Termination Date of the Notes pursuant to clause (iii), (iv) or (v)
        above to require the delivery of an opinion of counsel, certifications or
        other
        information satisfactory to the Company and the Trustee.

    

     

    TRANSFEREE:_________________,

     

    by:__________________

     

     

    
      2Exhibit 4.2

     

    EXHIBIT
      4.2

     

    EXECUTION
      COPY

    
 

    THIS
      ESCROW AGREEMENT, dated as of April 12, 2007, made by and between Sun Healthcare
      Group, Inc., a Delaware corporation (the “Issuer”)
      and
      Wells Fargo Bank, National Association, as escrow agent until a successor
      replaces it, and thereafter the successor (the “Escrow
      Agent”).

     

    Recitals

     

    The
      Issuer, the Guarantors (listed in Schedule B of the Purchase Agreement), Credit
      Suisse Securities (USA) LLC (“CS”)
      and
      the other Initial Purchasers referred to therein (together with CS, the
“Initial
      Purchasers”)
      are
      parties to that certain Purchase Agreement dated as of March 22, 2007 (the
“Purchase
      Agreement”).

     

    The
      Issuer, the Guarantors that are parties to the Indenture (as defined below)
      and
      Wells Fargo Bank, National Association, as trustee (the “Trustee”)
      are
      parties to that certain Indenture governing the 91⁄8 Senior Subordinated Notes due
      2015 (the “Notes”),
      dated
      as of April 12, 2007 (the “Indenture”).
      Capitalized terms that are used but not defined herein have the respective
      meanings specified in the Indenture.

     

    In
      order
      to facilitate the closing of the sale of the Notes under the Purchase Agreement,
      the Issuer desires to escrow certain funds with the Escrow Agent, and the Escrow
      Agent is willing to accept, hold, invest and distribute such funds, subject
      to
      the terms and conditions of this Escrow Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and undertakings set forth
      in this Escrow Agreement and other good and valuable consideration, the receipt
      and sufficiency of which are acknowledged, the Issuer and the Escrow Agent
      agree
      as follows:

     

    
      	 	
              1.

            	
              Delivery,
                Acceptance and Investment of Escrowed
                Funds.

            

    

     

    (a) Concurrently
      with the closing of the sale of the Notes and the execution and delivery of
      this
      Escrow Agreement, the Issuer will deposit with the Escrow Agent (i) cash in
      an
      amount equal to the gross proceeds from the sale of the Notes (which amount
      is
      equal to $194,256,860) and (ii) an additional amount in cash or Treasury
      Securities (which amount is equal to $10,305,640)
      such
      that the escrowed funds are in an amount sufficient to (x) make all interest
      payments due and payable on or prior to July

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11,
      2007,
      which is the latest possible date of redemption for a Special Mandatory
      Redemption (as defined below) and (y) redeem in cash the Notes at a redemption
      price equal to 100% of the principal amount of the Notes, plus accrued and
      unpaid interest on the Notes to the latest possible date of redemption for
      a
      Special Mandatory Redemption (as defined below) (the amounts referred to in
      clauses (i) and (ii) collectively, the “Initial
      Deposit”)
      and
      (iii) deliver to the Escrow Agent a certificate of a financial or accounting
      officer of the Issuer substantially in the form of the Exhibit A hereto,
      verifying that the amount of the Initial Deposit has been calculated in
      accordance with, and fully satisfies, the requirements of this Escrow Agreement.
      

     

    (b) The
      Escrow Agent hereby agrees to accept the Initial Deposit and to hold such funds
      and any proceeds thereof or interest or income resulting from the investment
      thereof in trust in an account located in the United States of America for
      investment and disbursement in accordance with the provisions of this Escrow
      Agreement. The Initial Deposit and any proceeds thereof or interest or income
      resulting from the investment thereof of any such deposit shall constitute
      the
“Escrowed
      Funds.”
The
      Escrow Agent shall invest the Escrowed Funds or any portion thereof in Escrow
      Investments (as defined below) as directed in writing from time to time by
      the
      Issuer. Such written instructions, if any, referred to in the foregoing sentence
      shall specify the type and identity of the Escrow Investments to be purchased
      or
      sold and shall also include the name of the broker-dealer, if any, that the
      Issuer directs the Escrow Agent to use in respect of such investment, any
      particular settlement procedures required (which settlement procedures shall
      be
      consistent with industry standards and practices), and such other information
      as
      the Escrow Agent may require. The Escrow Agent shall not be liable for failure
      to invest or reinvest funds absent written direction from the Issuer in
      accordance with this Escrow Agreement. Unless the Escrow Agent is otherwise
      directed in such written instructions, the Escrow Agent may use a broker-dealer
      of its own selection, including a broker-dealer owned by or affiliated with
      the
      Escrow Agent or any of its affiliates. The Issuer agrees that any investment
      in
      Escrow Investments identified by the Issuer shall be in an amount which will,
      without the reinvestment thereof or sale prior to maturity, provide cash that,
      together with other cash constituting the Escrowed Funds, will be sufficient
      to
      pay the Mandatory Redemption Price. Any such Escrow Investments will constitute
      Escrowed Funds. The Escrow Agent shall liquidate any such Escrow Investments
      at
      the written direction of the Issuer or when needed to make distributions
      pursuant to this Escrow Agreement.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      “Escrow
        Investments”
means
        (i) Treasury Securities (as defined below), (ii) investments in time
        deposit accounts, certificates of deposit and money market deposits, in each
        case maturing no later than July 11, 2007 (the “Escrow
        Outside Date”),
        entitled to U.S. Federal deposit insurance for the full amount thereof or
        issued
        by a bank (within the meaning of Section 3(a)(2) of the Securities Act of
        1933,
        as interpreted by the staff of the Securities and Exchange Commission) or
        trust
        company (including the Escrow Agent or an affiliate of the Escrow Agent)
        which
        is organized under the laws of the United States of America or any State
        thereof
        having capital, surplus and undivided profits aggregating in excess of
        $500,000,000, (iii) investments in commercial paper maturing no later than
        the Escrow Outside Date and having, at the date of acquisition, a credit
        rating
        no lower than A-1 from Standard & Poor’s Rating Service, P-1 from Moody’s
        Investors Service, Inc., or F-1 from Fitch Ratings Ltd. and (iv) repurchase
        obligations maturing no later than the Escrow Outside Date entered into with
        a
        nationally recognized broker-dealer, with respect to which the purchased
        securities are obligations issued or guaranteed by the United States of America
        or any agency thereof, which repurchase obligations shall be entered into
        pursuant to written agreements.

    

     

    “Treasury
      Securities”
means
      any investment in obligations issued or guaranteed by the United States of
      America or any agency thereof, in each case, maturing on or prior to the Escrow
      Outside Date.

     

    (c) For
      income tax and withholding purposes, all income earned on investments in the
      Escrowed Funds shall be attributed to the Issuer. The Escrow Agent shall have
      no
      responsibility for the tax consequences of this Escrow Agreement or the payment
      of any taxes. The Escrow Agent hereby advises the Issuer to consult with
      independent legal counsel concerning the tax ramifications of the arrangements
      contemplated by this Escrow Agreement. The Issuer hereby agrees to indemnify,
      defend and hold the Escrow Agent harmless from and against any tax, late
      payment, interest, penalty or other cost or expense that may be assessed against
      the Escrow Agent on or with respect to the Escrowed Funds and the investment
      thereof. The indemnification provided by this Section is in addition to the
      indemnification provided in Section 4 hereof and shall survive the resignation
      of the Escrow Agent and termination of this Escrow Agreement.

     

    (d) The
      Issuer acknowledges that the regulations of the Office of the Comptroller of
      the
      Currency grant the Issuer the right to receive brokerage confirmations of
      security transactions as they occur. The Issuer specifically waives such
      notification to 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    the
      extent permitted by law and acknowledges that it will receive periodic cash
      transaction statements, which will detail all investment
      transactions.

     

    
      	 	
              2.

            	
              Release
                of Escrowed Funds

            

    

     

    (a) The
      Escrow Agent shall release the Escrowed Funds from the escrow account created
      hereby only in accordance with this Section 2.

     

    (b) If
      at any
      time on or prior to the Escrow Outside Date, the Escrow Agent receives written
      notice from the Issuer that (which notice may be effected by delivery of an
      officer’s certificate substantially in the form of Exhibit B hereto)
      (i) all conditions precedent to the Merger (as defined below) have been
      satisfied or waived; (ii) the Issuer has received the net proceeds from
      borrowings of at least $290.0 million of senior secured term loans under its
      senior secured credit facility as described in the Offering Circular dated
      March
      22, 2007 (the “Offering
      Circular”);
      (iii)
      the Merger will be consummated on substantially the terms described in the
      Offering Circular and substantially contemporaneously with the requested release
      of the Escrowed Funds, and the Escrowed Funds will be applied, together with
      the
      borrowings under the Issuer’s senior secured credit facility and cash-on-hand of
      the Issuer and Harborside Healthcare Corporation, in the manner described under
      the section “Use of Proceeds” of the Offering Circular; (iv) no Default has
      occurred or is continuing (or result from the requested release of Escrowed
      Funds) from the Issue Date to the date of the acquisition of Harborside
      Healthcare Corporation and immediately after giving effect to such acquisition,
      in each case applying the covenants described under the section “Description of
      the Notes ─ Certain Covenants” in the Offering Circular to the Issuer,
      Harborside Healthcare Corporation and their respective subsidiaries (other
      than
      such Subsidiaries that are designated as Unrestricted Subsidiaries); (v) the
      Counterparts to the Purchase Agreement, the Counterparts to the Registration
      Agreement and the Supplemental Indenture (as such terms are defined in the
      Purchase Agreement) have been executed by the Harborside Guarantors (as listed
      in Schedule F of the Purchase Agreement), and delivered to the Initial
      Purchasers, to be effective upon the consummation of the Merger; and (vi)
      immediately after the release of the Escrowed Funds, the Issuer will use the
      Escrowed Funds, together with cash on hand, in the manner described under the
      caption “Use of Proceeds” contained in the Offering Circular (the foregoing
      clauses (i) through (vi) of this subsection being the “Escrow
      Conditions”),
      the
      Escrow Agent shall release all Escrowed Funds then held by it to or for the
      account of the Issuer, upon presentation of (i) the certificates, opinions
      and other documentation required pursuant to the Purchase 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Agreement
      and (ii) an officer’s certificate of the Issuer substantially in form and
      substance of Exhibit B hereto, signed by an authorized officer of the Issuer,
      certifying to the Escrow Agent as to the matters specified in Exhibit B
      hereto.

     

    (c) If
      the
      acquisition of Harborside Healthcare Corporation (the “Merger”)
      as
      described in the Offering Circular is not consummated on substantially the
      terms
      described in the Offering Circular by the Escrow Outside Date, or if the merger
      agreement for the Merger is terminated at any time prior to the Escrow Outside
      Date (each a “Mandatory
      Redemption Event”),
      then
      within three business days the Issuer shall provide written notice to the Escrow
      Agent and request the Trustee to mail to the holders of the Notes, in accordance
      with the terms of the Indenture, notice that a Mandatory Redemption Event has
      occurred and five business days after mailing such notice of a Mandatory
      Redemption Event, the Issuer shall redeem the Notes in cash at a redemption
      price equal to 100% of the principal amount of the Notes (the “Redemption
      Price”),
      plus
      accrued and unpaid interest on the Notes to the applicable redemption date
      (the
“Special
      Mandatory Redemption”).
      Upon
      the occurrence of a Mandatory Redemption Event, the Issuer shall deliver to
      the
      Escrow Agent, so as to be received by the Escrow Agent no later than one
      business day following the Escrow Outside Date, an officer’s certificate that
      sets forth (i) that the Special Mandatory Redemption is to occur, (ii) the
      Escrow Outside Date and (iii) the Redemption Price plus accrued interest and
      unpaid interest to be released by the Escrow Agent to the Trustee or Paying
      Agent (as defined below) for the benefit of the holders of the Notes and for
      the
      purpose of redeeming the Notes. If the Escrow Agent timely receives such an
      officer’s certificate from the Issuer, then the Escrow Agent shall, no later
      than the second business day following the Escrow Agent’s receipt of such
      officer’s certificate, release to Wells Fargo Bank, National Association, as
      Paying Agent (the “Paying
      Agent”)
      an
      amount of Escrowed Funds equal to the Redemption Price plus accrued and unpaid
      interest on the Notes to the applicable redemption date. Concurrently with
      such
      release to the Paying Agent, the Escrow Agent shall release any Escrowed Funds
      that exceed the Redemption Price and any and all accrued and unpaid interest
      on
      the Notes to the redemption date to the Issuer.

     

    (d) This
      Escrow Agreement shall terminate upon the occurrence of the events specified
      in
      paragraphs (b) or (c) of this Section; provided,
      however,
      that
      the obligations of the Issuer under Section 4 and Section 8 of this Escrow
      Agreement shall survive such termination. Upon termination of this Escrow
      Agreement, any Escrowed Funds remaining in the custody of the Escrow Agent,
      net
      of fees and expenses payable to 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    the
      Escrow Agent, shall be delivered promptly to the Issuer in accordance with
      the
      Issuer’s written instructions.

     

    
      	 	
              3.

            	
              Reliance;
                Liability

            

    

     

    The
      Escrow Agent may rely on, and shall not be liable for acting or refraining
      from
      acting in accordance with, any written notice, instruction or request or other
      communication furnished to it hereunder or pursuant hereto and believed by
      it in
      good faith to be genuine and to have been signed or presented by the proper
      party or parties. The Escrow Agent shall be responsible for holding, investing,
      reinvesting and disbursing the Escrowed Funds pursuant only to this Escrow
      Agreement; provided,
      however,
      that in
      no event shall the Escrow Agent be liable for any lost profits, lost savings
      or
      other special, exemplary, consequential or incidental damages even if the Escrow
      Agent has been advised of the likelihood of such loss or damage; and
provided,
      further,
      that
      the Escrow Agent shall have no liability for any loss arising from any cause
      beyond its control, including, but not limited to, the following: (a) acts
      of
      God, force majeure, including, without limitation, war (whether declared or
      existing), revolution, insurrection, riot, civil commotion, terrorism, accident,
      fire, explosion, stoppage of labor, strikes and other differences with
      employees; (b) the act, failure or neglect of any other party or any agent
      or
      correspondent or any other person selected by the Escrow Agent; (c) any delay,
      error, omission or default of any mail, courier, telegraph, cable or wireless
      agency or operator; or (d) the acts or edicts of any government or governmental
      agency or other group or entity exercising governmental powers. The Escrow
      Agent
      shall not be responsible or liable in any manner whatsoever for the sufficiency,
      correctness, genuineness or validity of the subject matter of this Escrow
      Agreement or any part hereof or for the transaction or transactions requiring,
      relating to or underlying the execution of this Escrow Agreement, the form
      or
      execution hereof or for the identity or authority of any person executing this
      Escrow Agreement or any part hereof or depositing the Escrowed Funds. In the
      event that the Escrow Agent shall be uncertain as to its duties or rights
      hereunder or shall receive instructions, claims or demands from any party hereto
      which, in its opinion or in the opinion of its counsel, conflict with any of
      the
      provisions of this Escrow Agreement, it shall be entitled to refrain from taking
      any action and its sole obligations shall be to keep safely all property held
      under the terms of this Escrow Agreement until it shall be directed otherwise
      in
      writing by the Issuer (with the written consent of the Initial Purchasers)
      or by
      a final order or judgment of a court of competent jurisdiction.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    4. Indemnity

     

    The
      Issuer agrees to indemnify the Escrow Agent, and its officers, directors,
      employees and agents for, and to hold it and each of them harmless against,
      any
      loss, liability or expense arising out of or in connection with this Escrow
      Agreement and carrying out its duties hereunder, including, without limitation,
      the costs and expenses of defending itself against any claim of liability,
      damage, expense or loss (including, without limitation, attorneys’ fees and
      expenses); provided,
      however,
      that
      the Issuer will not be liable for indemnification or otherwise for any loss,
      liability or expense to the extent arising out of the gross negligence, willful
      misconduct or bad faith of the Escrow Agent. In no event shall the Escrow Agent
      be liable for punitive, incidental or consequential damages. The obligations
      of
      the Issuer under this Section 4 shall survive the resignation of the Escrow
      Agent and the termination of this Escrow Agreement.

     

    
      	 	
              5.

            	
              Modifications,
                Waivers and Amendments

            

    

     

    The
      Escrow Agent shall not be bound by any modification, waiver, amendment,
      termination (except as provided in Section 2 hereof), cancellation, rescission
      or supersession of this Escrow Agreement unless the same shall be in writing
      and
      signed by the parties hereto, and, if its rights, duties, immunities or
      indemnities as Escrow Agent are affected thereby, unless it shall have given
      its
      prior written consent thereto. This Escrow Agreement may not be modified,
      waived, amended or terminated without the written consent of the Escrow Agent,
      Initial Purchasers and the Issuer.

     

    
      	 	
              6.

            	
              Concerning
                the Escrow Agent

            

    

     

    (a) The
      Escrow Agent and the Issuer acknowledge and agree that the Escrowed Funds shall
      be held by the Escrow Agent for and on behalf of the Issuer, and that the Escrow
      Agent is acting exclusively as the agent, custodian and bailee of the Issuer,
      and not of any other party; provided,
      however,
      the
      Initial Purchasers and the Trustee are each third party beneficiaries of this
      Escrow Agreement with full rights of enforcement.

     

    (b) The
      Escrow Agent shall exercise the same degree of care toward the Escrowed Funds
      as
      it exercises toward its own similar property.

     

    (c) The
      Escrow Agent may execute any of its powers or responsibilities hereunder and
      exercise any rights hereunder either directly or by or 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    through
      its agents or attorneys. The Escrow Agent shall have the right, but not the
      obligation to consult with counsel and/or other such professionals of the Escrow
      Agent’s choice and shall not be liable for any action taken or omitted to be
      taken by the Escrow Agent in accordance with the advice of such counsel or
      other
      such professionals. The Escrow Agent shall be entitled to reimbursement for
      any
      and all compensation (fees, expenses, and other costs) paid to such counsel
      and/or professional.

     

    (d) Nothing
      in this Escrow Agreement shall be deemed to impose upon the Escrow Agent any
      duty to qualify to do business or to act as agent or otherwise in any
      jurisdiction other than the State of New York.

     

    (e) The
      Escrow Agent shall have the right at any time to resign hereunder by giving
      written notice of its resignation to the Issuer at the address set forth herein
      or at such other address as the Issuer shall provide, at least 30 days prior
      to
      the date specified for such resignation to take effect. Upon the effective
      date
      of such resignation, all cash and other payments and all other property then
      held by the Escrow Agent hereunder shall be delivered by it to a successor
      Escrow Agent appointed by the Issuer with the consent of the Initial Purchasers.
      If no successor Escrow Agent is appointed, the Escrow Agent may apply to a
      court
      of competent jurisdiction for such appointment. The successor Escrow Agent
      is
      not required to be the same entity as the Trustee under the
      Indenture.

     

    (f) In
      the
      event that any Escrowed Funds shall be attached, garnished or levied upon by
      any
      court order, or the delivery thereof shall be stayed or enjoined by an order
      of
      a court, or any order, judgment or decree shall be made or entered by any court
      order affecting the property deposited under this Escrow Agreement, the Escrow
      Agent is hereby authorized, in its sole discretion, to obey and comply with
      all
      writs, orders or decrees so entered or issued, and in the event that the Escrow
      Agent obeys or complies with any such writ, order or decree it shall not be
      liable to the Issuer or to any other person, firm or corporation, by reason
      of
      such compliance notwithstanding that such writ, order or decree be subsequently
      reversed, modified, annulled, set aside or vacated. 

     

    (g) In
      the
      event that the Escrow Agent should at any time be confronted with inconsistent
      claims or demands with respect to the Escrowed Funds, the Escrow Agent shall
      have the right, but not the duty, to interplead the Escrowed Funds and/or the
      parties making such requests or demands in any court of competent 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    jurisdiction
      and request that such court determine the respective rights of the parties
      with
      respect to the Escrowed Funds. In the event the Escrow Agent no longer holds
      any
      Escrowed Funds, it shall be released from any obligation or liability as a
      consequence of any such claims or demands.

     

    (h) All
      references in this Escrow Agreement to any other agreement are for the
      convenience of the Issuer, and the Escrow Agent has no duties or obligations
      with respect thereto.

     

    (i) No
      provision of this Escrow Agreement shall require the Escrow Agent to risk or
      advance its own funds or otherwise incur any financial liability in the
      performance of its duties or the exercise of its rights under this Escrow
      Agreement.

     

    
      	 	
              7.

            	
              Notices

            

    

     

    All
      notices required to be given hereunder shall be in writing and shall be deemed
      given when received at the following addresses until such time as the parties
      hereto designate a different or additional address or addresses:

     

    To
      the
      Issuer:

     

    Sun
      Healthcare Group, Inc.

    18831
      Von
      Karman, Suite 400

    Irvine,
      CA 92612

    Attention:
      Michael Newman

    Facsimile:
      (949) 255-7057

     

    with
      a
      copy to:

     

    O’Melveny
      & Myers LLP

    400
      South
      Hope Street

    Los
      Angeles, CA 90071

    Attention:
      Richard Boehmer

    Facsimile:
      (213) 430-6407

     

    To
      the
      Escrow Agent:

     

    Wells
      Fargo Bank, National Association

    Corporate
      Trust Services

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    707
      Wilshire Blvd., 17th Floor

    Attention:
      Madeliena J. Hall

    Facsimile:
      213-614-3355

     

    8.    Compensation
      and Fees and Expenses of the Escrow Agent

     

    The
      Issuer hereby agrees to pay the Escrow Agent for its services hereunder in
      accordance with the Escrow Agent’s fee schedule as attached hereto as Exhibit C
      and to pay all expenses incurred by the Escrow Agent in connection with the
      performance of its duties and enforcement of its rights hereunder and otherwise
      in connection with the preparation, operation, administration and enforcement
      of
      this Escrow Agreement, including, without limitation, reasonable attorneys’ fees
      and expenses, brokerage costs and other reasonable and related expenses incurred
      by the Escrow Agent in accordance with this Escrow Agreement. The fees and
      expenses agreed upon for the services rendered hereunder is intended as full
      compensation for the Escrow Agent's services as contemplated by this Escrow
      Agreement; provided, however, that in the event that the conditions for the
      disbursement of funds under this Escrow Agreement are not fulfilled, or the
      Escrow Agent renders any material service not contemplated in this Escrow
      Agreement, or there is any assignment of interest in the subject matter of
      this
      Escrow Agreement, or any material modification hereof, or if any material
      controversy arises hereunder, or the Escrow Agent is made a party to any
      litigation pertaining to this Escrow Agreement, or the subject matter hereof,
      then the Escrow Agent shall be compensated for such extraordinary services
      and
      reimbursed for all costs and expenses, including reasonable attorneys’ fees and
      expenses, occasioned by any delay, controversy, litigation or event, and the
      same shall be recoverable from Issuer. The obligations of the Issuer under
      this
      Section 8 shall survive the resignation of the Escrow Agent and the termination
      of this Escrow Agreement. 

     

    
      	 	
              9.

            	
              Miscellaneous

            

    

     

    (a) This
      Escrow Agreement sets forth exclusively the duties of the Escrow Agent with
      respect to any and all matters pertinent hereto and no implied duties or
      obligations shall be read into this Escrow Agreement against the Escrow Agent.
      This Escrow Agreement contains the entire understanding among the parties and
      supersedes any prior understanding and agreements among them, in each case
      respecting this subject matter.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (b) This
      Escrow Agreement may be executed in any number of counterparts, each of which
      shall be an original and all of which when taken together shall constitute
      one
      agreement.

     

    (c) Unless
      the context otherwise requires, “or” is not exclusive.

     

    (d) This
      Escrow Agreement shall be governed by, and construed in accordance with, the
      laws of the State of New York.

     

    (e) In
      the
      event that any provision of this Escrow Agreement is declared by any court
      or
      other judicial or administrative body to be null, void, or otherwise
      unenforceable for any reason, said provision shall survive to the extent it
      is
      not so declared, and all of the other provisions of this Escrow Agreement shall
      remain in full force and effect.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have duly executed this Escrow Agreement as of
      the
      date first above written.

     

    
      	
              SUN
                HEALTHCARE GROUP, INC.,

            
	 
	
              By

            
	 	
              /s/
                Michael Newman

            
	 	
              Name:
                Michael Newman

              Title:
                Executive Vice President

            

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    
      	
              WELLS
                FARGO BANK, National 

              Association,
                as Escrow Agent

            
	 
	
              By

            
	 	
              /s/
                Maddy
                Hall

            
	 	
              Name: Maddy
                Hall

              Title: 
                Assistant Vice President

            

    

     

    

      13

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