Document:

Exhibit
10.4

 

 

 

 

SECOND LIEN GUARANTEE AND COLLATERAL AGREEMENT

 

 

made by

 

each of the Grantors (as defined herein)

 

in favor of

 

 

WELLS FARGO ENERGY CAPITAL, INC.,

 

as Administrative Agent

 

 

Dated as of November 30, 2010

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
   

  	
  Definitions

  	
  1

  
	
  Section 1.02

  	
   

  	
  Other
  Definitional Provisions; References

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  GUARANTEE

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
   

  	
  Guarantee

  	
  3

  
	
  Section 2.02

  	
   

  	
  Payments

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  GRANT
  OF SECURITY INTEREST

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01

  	
   

  	
  Grant
  of Security Interest

  	
  4

  
	
  Section 3.02

  	
   

  	
  Transfer
  of Pledged Securities

  	
  6

  
	
  Section 3.03

  	
   

  	
  Grantors
  Remains Liable under Accounts, Chattel Paper and Payment Intangibles

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  ACKNOWLEDGMENTS,
  WAIVERS AND CONSENTS

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01

  	
   

  	
  Acknowledgments,
  Waivers and Consents

  	
  7

  
	
  Section 4.02

  	
   

  	
  No
  Subrogation, Contribution or Reimbursement

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01

  	
   

  	
  Representations
  in Credit Agreement

  	
  10

  
	
  Section 5.02

  	
   

  	
  Benefit
  to the Guarantor

  	
  10

  
	
  Section 5.03

  	
   

  	
  Solvency

  	
  10

  
	
  Section 5.04

  	
   

  	
  Title;
  No Other Liens

  	
  10

  
	
  Section 5.05

  	
   

  	
  Perfected
  Second Priority Liens

  	
  10

  
	
  Section 5.06

  	
   

  	
  Legal
  Name, Organizational Status, Chief Executive Office

  	
  11

  
	
  Section 5.07

  	
   

  	
  Prior
  Names, Addresses, Locations of Tangible Assets

  	
  11

  
	
  Section 5.08

  	
   

  	
  Pledged
  Securities

  	
  11

  
	
  Section 5.09

  	
   

  	
  Goods

  	
  11

  
	
  Section 5.10

  	
   

  	
  Instruments
  and Chattel Paper

  	
  11

  
	
  Section 5.11

  	
   

  	
  Truth
  of Information; Accounts

  	
  12

  
	
  Section 5.12

  	
   

  	
  Governmental
  Obligors

  	
  12

  
	
  Section 5.13

  	
   

  	
  Patents
  and Trademarks

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  COVENANTS

  	
  12

  
	
  Section 6.01

  	
   

  	
  Covenants
  in Credit Agreement

  	
  12

  
	
  Section 6.02

  	
   

  	
  Maintenance
  of Perfected Security Interest; Further Documentation

  	
  12

  
	
  Section 6.03

  	
   

  	
  Maintenance
  of Records

  	
  13

  
	
  Section 6.04

  	
   

  	
  Right
  of Inspection

  	
  14

  
	
  Section 6.05

  	
   

  	
  Further
  Identification of Collateral

  	
  14

  
	
  Section 6.06

  	
   

  	
  Changes
  in Locations, Name, etc.

  	
  14

  
	
  Section 6.07

  	
   

  	
  Compliance
  with Contractual Obligations

  	
  14

  

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.08

  	
   

  	
  Limitations
  on Dispositions of Collateral

  	
  15

  
	
  Section 6.09

  	
   

  	
  Pledged
  Securities

  	
  15

  
	
  Section 6.10

  	
   

  	
  Limitations
  on Modifications, Waivers, Extensions of Agreements Giving Rise to Accounts

  	
  16

  
	
  Section 6.11

  	
   

  	
  Analysis
  of Accounts, Etc.

  	
  16

  
	
  Section 6.12

  	
   

  	
  Instruments
  and Tangible Chattel Paper

  	
  17

  
	
  Section 6.13

  	
   

  	
  Maintenance
  of Equipment

  	
  17

  
	
  Section 6.14

  	
   

  	
  Patents
  and Trademarks

  	
  17

  
	
  Section 6.15

  	
   

  	
  Commercial
  Tort Claims

  	
  18

  
	
  Section 6.16

  	
   

  	
  Letter-of-Credit
  Rights

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  REMEDIAL
  PROVISIONS

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01

  	
   

  	
  Pledged
  Securities

  	
  19

  
	
  Section 7.02

  	
   

  	
  Collections
  on Accounts, Etc.

  	
  20

  
	
  Section 7.03

  	
   

  	
  Proceeds

  	
  20

  
	
  Section 7.04

  	
   

  	
  Colorado
  UCC and Other Remedies

  	
  21

  
	
  Section 7.05

  	
   

  	
  Private
  Sales of Pledged Securities

  	
  22

  
	
  Section 7.06

  	
   

  	
  Waiver;
  Deficiency

  	
  23

  
	
  Section 7.07

  	
   

  	
  Non-Judicial
  Enforcement

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  THE
  ADMINISTRATIVE AGENT

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01

  	
   

  	
  Administrative
  Agent’s Appointment as Attorney-in-Fact, Etc.

  	
  23

  
	
  Section 8.02

  	
   

  	
  Duty
  of Administrative Agent

  	
  25

  
	
  Section 8.03

  	
   

  	
  Execution
  of Financing Statements

  	
  25

  
	
  Section 8.04

  	
   

  	
  Authority
  of Administrative Agent

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  SUBORDINATION
  OF INDEBTEDNESS

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01

  	
   

  	
  Subordination
  of All Guarantor Claims

  	
  26

  
	
  Section 9.02

  	
   

  	
  Claims
  in Bankruptcy

  	
  26

  
	
  Section 9.03

  	
   

  	
  Payments
  Held in Trust

  	
  27

  
	
  Section 9.04

  	
   

  	
  Liens
  Subordinate

  	
  27

  
	
  Section 9.05

  	
   

  	
  Notation
  of Records

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  MISCELLANEOUS

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01

  	
   

  	
  Waiver

  	
  27

  
	
  Section 10.02

  	
   

  	
  Notices

  	
  27

  
	
  Section 10.03

  	
   

  	
  Payment
  of Expenses, Indemnities, Etc.

  	
  28

  
	
  Section 10.04

  	
   

  	
  Amendments
  in Writing

  	
  28

  
	
  Section 10.05

  	
   

  	
  Successors
  and Assigns

  	
  28

  
	
  Section 10.06

  	
   

  	
  Invalidity

  	
  29

  
	
  Section 10.07

  	
   

  	
  Counterparts

  	
  29

  
	
  Section 10.08

  	
   

  	
  Survival

  	
  29

  
	
  Section 10.09

  	
   

  	
  Captions

  	
  29

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.10

  	
   

  	
  No
  Oral Agreements

  	
  29

  
	
  Section 10.11

  	
   

  	
  Governing
  Law; Submission to Jurisdiction

  	
  29

  
	
  Section 10.12

  	
   

  	
  Acknowledgments

  	
  30

  
	
  Section 10.13

  	
   

  	
  Additional
  Grantors

  	
  31

  
	
  Section 10.14

  	
   

  	
  Set-Off

  	
  31

  
	
  Section 10.15

  	
   

  	
  Releases

  	
  31

  
	
  Section 10.16

  	
   

  	
  Reinstatement

  	
  32

  
	
  Section 10.17

  	
   

  	
  Acceptance

  	
  32

  
	
  Section 10.18

  	
   

  	
  Intercreditor
  Agreement

  	
  33

  

 

SCHEDULES:

 

1.                                       Notice
Addresses of Guarantors

 

2.                                       Description of
Pledged Securities

 

3.                                       Filings and
Other Actions Required to Perfect Security Interests

 

4.                                       Legal Name, Location
of Jurisdiction of Organization, Organizational Identification Number, Taxpayor
Identification Number and Chief Executive Office

 

5.                                       Prior Names,
Prior Chief Executive Office, Location of Tangible Assets

 

6.                                       Patents and
Patent Licenses

 

7.                                       Trademarks and
Trademark Licenses

 

ANNEX:

 

1.                                       Form of
Assumption Agreement

 

iii

 

This
SECOND LIEN GUARANTEE AND COLLATERAL AGREEMENT, dated as of November 30,
2010, is made by KODIAK OIL & GAS (USA) INC., a Colorado corporation
(the “Borrower”) and each of the other signatories hereto other than the
Administrative Agent (the Borrower and each of the other signatories hereto
other than the Administrative Agent, together with any other Subsidiary of the
Borrower that becomes a party hereto from time to time after the date hereof,
the “Grantors”), in favor of WELLS FARGO ENERGY CAPITAL, INC., as
administrative agent (in such capacity, together with its successors in such
capacity, the “Administrative Agent”), for the banks and other financial
institutions (the “Lenders”) from time to time parties to that certain
Second Lien Credit Agreement, dated as of even date herewith (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, the Lenders, the Administrative Agent, and the other Agents
party thereto.

 

NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders and the other Secured Parties, as follows:

 

ARTICLE I

Definitions

 

Section 1.01  Definitions.

 

(a)                                  As used in this
Agreement, each term defined above shall have the meaning indicated above.  Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement, and the following terms as well as all
uncapitalized terms that are defined in the Colorado UCC on the date hereof are
used herein as so defined:  Accounts,
Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Electronic
Chattel Paper, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment
Property, Letter-of-Credit Rights, Payment Intangibles, Proceeds, Supporting
Obligations, and Tangible Chattel Paper.

 

(b)                                 The following
terms shall have the following meanings:

 

“Account
Debtor” shall mean a Person (other than any Grantor) obligated on an
Account, Chattel Paper, or General Intangible.

 

“Agreement”
shall mean this Guarantee and Collateral Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Collateral”
shall have the meaning assigned such term in Section 3.01.

 

“Colorado
UCC” shall mean the Uniform Commercial Code, as it may be amended, from
time to time in effect in the State of Colorado.

 

“Discharge
of First Lien Obligations” shall have the meaning assigned to such term in
the Intercreditor Agreement.

 

1

 

“First
Lien Administrative Agent” has the meaning assigned to such term in the
Intercreditor Agreement.

 

“First
Lien Guarantee and Collateral Agreement” means that certain Guarantee and
Collateral Agreement, dated as of May 24, 2010, made by each of the
Grantors party thereto in favor of First Lien Administrative Agent.

 

“First
Lien Obligations” has the meaning assigned to such term in the
Intercreditor Agreement.

 

“Guarantors”
shall mean, collectively, each Grantor other than the Borrower.

 

“Intercreditor
Agreement” shall have the meaning assigned to such term in Section 10.18.

 

“Issuers”
shall mean, collectively, each issuer of a Pledged Security.

 

“Obligations”
shall mean, collectively, all Indebtedness, liabilities and obligations of the
Borrower and each Guarantor to the Secured Parties, of whatsoever nature and
howsoever evidenced, due or to become due, now existing or hereafter arising,
whether direct or indirect, absolute or contingent, which may arise under, out
of, or in connection with the Credit Agreement, the other Loan Documents and
all other agreements, guarantees, notes and other documents entered into by any
party in connection therewith, and any amendment, restatement or modification
of any of the foregoing, including, but not limited to, the full and punctual
payment when due of any unpaid principal of the Loans, interest (including,
without limitation, interest accruing at any post-default rate and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), fees,
reimbursement obligations, guaranty obligations, penalties, indemnities, legal
and other fees, charges and expenses, and amounts advanced by and expenses
incurred in order to preserve any collateral or security interest, whether due
after acceleration or otherwise.

 

“Patents”
shall mean: (i) all letters patent of the United States and all reissues
and extensions thereof, including, without limitation, any thereof referred to
in Schedule 6 hereto, and (ii) all applications for letters patent of the
United States and all divisions, continuations and continuations-in-part
thereof or any other country, including, without limitation, any thereof
referred to in Schedule 6 hereto.

 

“Patent
License” shall mean all agreements, whether written or oral, providing for
the grant by any Grantor of any right to manufacture, use or sell any invention
covered by a Patent, including, without limitation, any thereof referred to in
Schedule 6 hereto.

 

“Pledged
Securities” shall mean: (i) the equity interests described or referred
to in Schedule 2; and (ii) (a) the certificates or instruments, if
any, representing such equity interests, (b) all dividends (cash, stock or
otherwise), cash, instruments, rights to subscribe, purchase or sell and all
other rights and property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such equity
interests, (c) all replacements, additions to and substitutions for any of
the property referred to in this definition, including, without limitation,
claims against third parties, (d) the proceeds, interest, profits and 

 

2

 

other
income of or on any of the property referred to in this definition and (e) all
books and records relating to any of the property referred to in this
definition.

 

“Secured
Parties” shall mean, collectively, the Administrative Agent and the
Lenders.

 

“Securities
Act” shall mean the Securities Act of 1933, as amended.

 

“Trademarks”
shall mean:  (i) all trademarks,
trade names, corporate names, company names, business names, fictitious
business names, trade styles, service marks, logos and other source or business
identifiers, and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, including, without limitation, any thereof referred to in Schedule 7
hereto, and (ii) all renewals thereof.

 

“Trademark
License” shall mean any agreement, written or oral, providing for the grant
by any Grantor of any right to use any Trademark, including, without
limitation, any thereof referred to in Schedule 7 hereto.

 

Section 1.02  Other Definitional Provisions; References.  The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such
terms.  The gender of all words shall
include the masculine, feminine, and neuter, as appropriate.  The words “herein,” “hereof,” “hereunder” and
other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or
subsection.  Any reference herein to a Section shall
be deemed to refer to the applicable Section of this Agreement unless
otherwise stated herein.  Any reference
herein to an exhibit, schedule or annex shall be deemed to refer to the
applicable exhibit, schedule or annex attached hereto unless otherwise stated herein.  Where the context requires, terms relating to
the Collateral or any part thereof, when used in relation to a Grantor, shall
refer to such Grantor’s Collateral or the relevant part thereof.

 

ARTICLE II

Guarantee

 

Section 2.01  Guarantee.

 

(a)                                  Each of the
Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the ratable benefit of the Secured
Parties and each of their respective successors, endorsees, transferees and
assigns, the prompt and complete payment and performance by the Borrower and
the Guarantors when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.  This is a
guarantee of payment and not collection and the liability of each Guarantor is
primary and not secondary.

 

(b)                                 Anything herein
or in any other Loan Document to the contrary notwithstanding, the maximum
liability of each Guarantor hereunder and under the other Loan Documents shall
in no event exceed the amount which can be guaranteed by such Guarantor under
applicable federal and state laws relating to the insolvency of debtors.

 

3

 

(c)                                  Each Guarantor
agrees that the Obligations may at any time and from time to time exceed the
amount of the liability of such Guarantor hereunder without impairing the
guarantee contained in this Article II or affecting the rights and
remedies of the Administrative Agent or any Secured Party hereunder.

 

(d)                                 Each Guarantor
agrees that if the maturity of any of the Obligations is accelerated by
bankruptcy or otherwise, such maturity shall also be deemed accelerated for the
purpose of this guarantee without demand or notice to such Guarantor.  The guarantee contained in this Article II
shall remain in full force and effect until all the Obligations shall have been
satisfied by payment in full, and the Credit Agreement and the total
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement, no Obligations may be outstanding.

 

(e)                                  No payment made
by the Borrower, any of the Guarantors, any other guarantor or any other Person
or received or collected by the Administrative Agent or any other Secured Party
from the Borrower, any of the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder which shall, notwithstanding any such
payment (other than any payment made by such Guarantor in respect of the
Obligations or any payment received or collected from such Guarantor in respect
of the Obligations), remain liable for the Obligations up to the maximum
liability of such Guarantor hereunder until the Obligations are paid in full,
and the Credit Agreement and the total Commitments are terminated.

 

Section 2.02  Payments.  Each Guarantor hereby agrees and guarantees
that payments hereunder will be paid to the Administrative Agent without
set-off or counterclaim in United States dollars at the Administrative Agent’s
principal office in Denver, Colorado.

 

ARTICLE III

Grant of Security Interest

 

Section 3.01  Grant of Security Interest.  Each Grantor hereby pledges, assigns and
transfers to the Administrative Agent, and grants to the Administrative Agent,
for the ratable benefit of the Secured Parties, a security interest in all of
the following property now owned or at any time hereafter acquired by such
Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest and whether now existing or hereafter
coming into existence (collectively, the “Collateral”), as collateral security
for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations:

 

(1)                                  all Accounts;

 

(2)                                  all Chattel
Paper (whether Tangible Chattel Paper or Electronic Chattel Paper);

 

(3)                                  all Commercial
Tort Claims;

 

4

 

(4)                                  all Deposit
Accounts other than payroll, withholding tax and other fiduciary Deposit
Accounts;

 

(5)                                  all Documents;

 

(6)                                  all General
Intangibles (including, without limitation, rights in and under any Swap
Agreements);

 

(7)                                  all Goods
(including, without limitation, all Inventory and all Equipment, but excluding
all Fixtures);

 

(8)                                  all
Instruments;

 

(9)                                  all Investment
Property;

 

(10)                            all
Letter-of-Credit Rights (whether or not the letter of credit is evidenced by a
writing);

 

(11)                            all Patents;

 

(12)                            all Patent
Licenses;

 

(13)                            all Pledged
Securities;

 

(14)                            all Supporting
Obligations;

 

(15)                            all Trademarks;

 

(16)                            all books and
records pertaining to the Collateral; and

 

(17)                            to the extent
not otherwise included, all Proceeds and products of any and all of the
foregoing and all collateral security, guarantees and other Supporting
Obligations given with respect to any of the foregoing.

 

Notwithstanding
anything herein to the contrary, in no event shall the security interest
granted pursuant to this Article II attach to, or the term “Collateral” be
deemed to include, (a) any of the outstanding equity interests in a
Subsidiary of any Grantor organized under the laws of a jurisdiction not
located in the United States of America ( a “Foreign Subsidiary”) (i) in
excess of 65% of the voting power of all classes of equity interests of such
Foreign Subsidiary entitled to vote in the election of directors or other
similar body of such Foreign Subsidiary or (ii) to the extent that the
pledge thereof is prohibited by the laws of the jurisdiction of such Foreign
Subsidiary’s organization; (b) any equity interest in any Foreign
Subsidiary that is not a first-tier Subsidiary of any Grantor; (c) any
lease, license, contract, property rights or agreement to which a Grantor is a
party or any of such Grantor’s rights or interests thereunder, if, and for so
long as and to the extent that, the grant of the security interest hereunder
would constitute or result in (i) the abandonment, invalidation or
unenforceability of any material right, title or interest of such Grantor
therein or (ii) a breach or termination pursuant to the terms of, or a
default under, any such lease, license, contract, property rights or agreement
(other than to the extent that any such 

 

5

 

breach,
termination or default would be rendered ineffective pursuant to Section 9-406,
9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor
provision or provisions) of any relevant jurisdiction, any other applicable law
or principles of equity), provided, however, that the security interest granted
hereunder (x) shall attach immediately when the condition causing such
abandonment, invalidation or unenforceability is remedied, (y) shall
attach immediately to any severable term of such lease, license, contract,
property rights or agreement to the extent that such attachment does not result
in any of the consequences specified in (i) or (ii) above and (z) shall
attach immediately to any such lease, license, contract, property rights or
agreement to which the account debtor or such Grantor’s counterparty has
consented to such attachment; and (d) any application to register any
Trademark prior to the filing under applicable law of a verified statement of
use (or the equivalent) for such Trademark to the extent the creation of a
security interest therein or the grant of a mortgage thereon would void or
invalidate such Trademark (collectively, the “Excluded Property”);
provided, however, that any Collateral (or any portion thereof) that ceases to
satisfy the criteria for Excluded Property (whether as a result of a Grantor
obtaining any necessary consent, any change in any rule of law, statute or
regulation or otherwise) shall no longer be Excluded Property and the security
interest granted hereunder shall attach immediately to such Collateral (or
portion thereof) at such time.

 

Section 3.02  Transfer of Pledged Securities.  All certificates and instruments representing
or evidencing the Pledged Securities shall be delivered to and held pursuant
hereto by the First Lien Administrative Agent or a Person designated by the
First Lien Administrative Agent, in either case, which shall act as the Administrative
Agent’s bailee and agent in accordance with the terms of the Intercreditor
Agreement, and, in the case of an instrument or certificate in registered form,
shall be duly indorsed to the First Lien Administrative Agent or in blank by an
effective indorsement (whether on the certificate or instrument or on a
separate writing), and accompanied by any required transfer tax stamps to
effect the pledge of the Pledged Securities to the First Lien Administrative
Agent.  As required by and in compliance
with the Intercreditor Agreement, upon the Discharge of First Lien Obligations,
(i) the First Lien Administrative Agent shall transfer the possession and
control of all certificates and instruments representing or evidencing the
Pledged Securities, together with any necessary endorsements but without
recourse or warranty, and (ii) all Pledged Securities must be delivered or
transferred in such manner, and each Grantor shall take all such further action
as may be requested by the Administrative Agent, as to permit the
Administrative Agent to be a “protected purchaser” to the extent of its
security interest as provided in Section 8-303 of the Colorado UCC (if the
Administrative Agent otherwise qualifies as a protected purchaser).

 

Section 3.03  Grantors Remains Liable under Accounts,
Chattel Paper and Payment Intangibles. 
Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Accounts, Chattel Paper and Payment Intangibles
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise to each such Account, Chattel Paper or Payment Intangible.  Neither the Administrative Agent nor any
other Secured Party shall have any obligation or liability under any Account,
Chattel Paper or Payment Intangible (or any agreement giving rise thereto) by
reason of or arising out of this Agreement or the receipt by the Administrative
Agent or any such other Secured Party of any payment relating to such Account,
Chattel Paper or Payment Intangible, pursuant hereto, nor shall the
Administrative Agent or any other Secured Party be obligated in any manner to
perform any of the obligations of any Grantor 

 

6

 

under or pursuant to any Account, Chattel Paper or
Payment Intangible (or any agreement giving rise thereto), to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party under any
Account, Chattel Paper or Payment Intangible (or any agreement giving rise
thereto), to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

 

ARTICLE IV

Acknowledgments, Waivers and Consents

 

Section 4.01  Acknowledgments, Waivers and Consents.

 

(a)                                  Each Guarantor
acknowledges and agrees that the obligations undertaken by it under this
Agreement involve the guarantee and each Grantor acknowledges and agrees that
the obligations undertaken by it involve the provision of collateral security
for the obligations of Persons other than such Grantor (other than the
Borrower) and that such Guarantor’s guarantee and such Grantor’s provision of
collateral security for the Obligations are absolute, irrevocable and
unconditional under any and all circumstances. 
In full recognition and furtherance of the foregoing, each Grantor understands
and agrees, to the fullest extent permitted under applicable law and except as
may otherwise be expressly and specifically provided in the Loan Documents,
that each Grantor shall remain obligated hereunder (including, without
limitation, with respect to the guarantee made by such Guarantor hereby and the
collateral security provided by such Grantor herein) and the enforceability and
effectiveness of this Agreement and the liability of such Grantor, and the
rights, remedies, powers and privileges of the Administrative Agent and the
other Secured Parties under this Agreement and the other Loan Documents shall
not be affected, limited, reduced, discharged or terminated in any way:

 

(i)                                     notwithstanding
that, without any reservation of rights against any Grantor and without notice
to or further assent by any Grantor, (A) any demand for payment of any of
the Obligations made by the Administrative Agent or any other Secured Party may
be rescinded by the Administrative Agent or such other Secured Party and any of
the Obligations continued; (B) the Obligations, the liability of any other
Person upon or for any part thereof or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by, or any indulgence or
forbearance in respect thereof granted by, the Administrative Agent or any
other Secured Party; (C) the Credit Agreement, the other Loan Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Majority Lenders or all Lenders, as the case may
be) may deem advisable from time to time; (D) the Borrower, any Grantor or
any other Person may from time to time accept or enter into new or additional
agreements, security documents, guarantees or other instruments in addition to,
in exchange for or relative to, any Loan Document, all or any part of the
Obligations or any Collateral now or in the future serving as security for the
Obligations; (E) any collateral security, guarantee or right of offset at
any time held by the Administrative Agent or any other Secured Party for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released; and (F) any other event shall occur which constitutes a defense
or release of sureties generally; and

 

7

 

(ii)                                  without regard
to, and each Grantor hereby expressly waives to the fullest extent permitted by
law any defense now or in the future arising by reason of, (A) the
illegality, invalidity or unenforceability of the Credit Agreement, any other
Loan Document, any of the Obligations or any other collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time
to time held by the Administrative Agent or any other Secured Party, (B) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by any
Grantor or any other Person against the Administrative Agent or any other
Secured Party, (C) the insolvency, bankruptcy arrangement, reorganization,
adjustment, composition, liquidation, disability, dissolution or lack of power
of any Grantor or any other Person at any time liable for the payment of all or
part of the Obligations or the failure of the Administrative Agent or any other
Secured Party to file or enforce a claim in bankruptcy or other proceeding with
respect to any Person; or any sale, lease or transfer of any or all of the
assets of the any Grantor, or any changes in the shareholders of any Grantor; (D) the
fact that any Collateral or Lien contemplated or intended to be given, created
or granted as security for the repayment of the Obligations shall not be
properly perfected or created, or shall prove to be unenforceable or
subordinate to any other Lien, it being recognized and agreed by each of the
Grantors that it is not entering into this Agreement in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectability
or value of any of the Collateral for the Obligations; (E) any failure of
the Administrative Agent or any other Secured Party to marshal assets in favor
of any Grantor or any other Person, to exhaust any collateral for all or any
part of the Obligations, to pursue or exhaust any right, remedy, power or
privilege it may have against any Grantor or any other Person or to take any
action whatsoever to mitigate or reduce any Grantor’s liability under this
Agreement or any other Loan Document; (F) any law which provides that the
obligation of a surety or guarantor must neither be larger in amount nor in other
respects more burdensome than that of the principal or which reduces a surety’s
or guarantor’s obligation in proportion to the principal obligation; (G) the
possibility that the Obligations may at any time and from time to time exceed
the aggregate liability of such Grantor under this Agreement; or (H) any
other circumstance or act whatsoever (with or without notice to or knowledge of
any Grantor), which constitutes, or might be construed to constitute, an
equitable or legal discharge or defense of the Borrower for the Obligations, or
of such Grantor under the guarantee contained in Article II or with
respect to the collateral security provided by such Grantor herein, or which
might be available to a surety or guarantor, in bankruptcy or in any other instance.

 

(b)                                 Each Grantor
hereby waives to the extent permitted by law: 
(i) except as expressly provided otherwise in any Loan Document,
all notices to such Grantor, or to any other Person, including but not limited
to, notices of the acceptance of this Agreement, the guarantee contained in Article II
or the provision of collateral security provided herein, or the creation,
renewal, extension, modification, accrual of any Obligations, or notice of or
proof of reliance by the Administrative Agent or any other Secured Party upon
the guarantee contained in Article II or upon the collateral security
provided herein, or of default in the payment or performance of any of the
Obligations owed to the Administrative Agent or any other Secured Party and
enforcement of any right or remedy with respect thereto; or notice of any other
matters relating thereto; the Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in Article II
and the collateral security provided herein and no notice of creation of the
Obligations or any extension of credit already or hereafter contracted by or
extended to the 

 

8

 

Borrower need be given to any Grantor; and all
dealings between the Borrower and any of the Grantors, on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in Article II and on the collateral security
provided herein; (ii) diligence and demand of payment, presentment,
protest, dishonor and notice of dishonor; (iii) any statute of limitations
affecting any Grantor’s liability hereunder or the enforcement thereof; (iv) all
rights of revocation with respect to the Obligations, the guarantee contained
in Article II and the provision of collateral security herein; and (v) all
principles or provisions of law which conflict with the terms of this Agreement
and which can, as a matter of law, be waived.

 

(c)                                  When making any
demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Grantor, the Administrative Agent or any other Secured Party may,
but shall be under no obligation to, join or make a similar demand on or
otherwise pursue or exhaust such rights and remedies as it may have against the
Borrower, any other Grantor or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any other Secured Party
to make any such demand, to pursue such other rights or remedies or to collect
any payments from the Borrower, any other Grantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any Grantor or any other
Person or any such collateral security, guarantee or right of offset, shall not
relieve any Grantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent or any other Secured Party against
any Grantor.  For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.  Neither the Administrative Agent nor any
other Secured Party shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or for
the guarantee contained in Article II or any property subject thereto.

 

Section 4.02  No Subrogation, Contribution or
Reimbursement.  Notwithstanding any
payment made by any Grantor hereunder or any set-off or application of funds of
any Grantor by the Administrative Agent or any other Secured Party, no Grantor
shall be entitled to be subrogated to any of the rights of the Administrative
Agent or any other Secured Party against the Borrower or any other Grantor or
any collateral security or guarantee or right of offset held by the
Administrative Agent or any other Secured Party for the payment of the
Obligations, nor shall any Grantor seek or be entitled to seek any indemnity,
exoneration, participation, contribution or reimbursement from the Borrower or
any other Grantor in respect of payments made by such Grantor hereunder, and
each Grantor hereby expressly waives, releases, and agrees not to exercise any
all such rights of subrogation, reimbursement, indemnity and contribution.  Each Grantor further agrees that to the
extent that such waiver and release set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement, indemnity and contribution such Grantor may have
against the Borrower, any other Grantor or against any collateral or security
or guarantee or right of offset held by the Administrative Agent or any other
Secured Party shall be junior and subordinate to any rights the Administrative
Agent and the other Secured Parties may have against the Borrower and such
Grantor and to all right, title and interest the Administrative Agent and the
other Secured Parties may have in any collateral or security or guarantee or
right of offset.  The Administrative
Agent, for the benefit of the Secured Parties, may use, sell or dispose of any
item 

 

9

 

of Collateral or security as it sees fit without
regard to any subrogation rights any Grantor may have, and upon any disposition
or sale, any rights of subrogation any Grantor may have shall terminate.

 

ARTICLE V

Representations and Warranties

 

To
induce the Administrative Agent and the other Secured Parties to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each other Secured Party that:

 

Section 5.01  Representations in Credit Agreement.  In the case of each Guarantor, the
representations and warranties set forth in Article VII of the Credit
Agreement as they relate to such Guarantor (in its capacity as a Subsidiary of
the Borrower) or to the Loan Documents to which such Guarantor is a party are
true and correct in all material respects, provided that each reference in each
such representation and warranty to the Borrower’s knowledge shall, for the
purposes of this Section 5.01, be deemed to be a reference to such
Guarantor’s knowledge.

 

Section 5.02  Benefit to the Guarantor.  The Borrower is a member of an affiliated
group of companies that includes each Guarantor, and the Borrower and the
Guarantors are engaged in related businesses. 
Each Guarantor is a Subsidiary of the Borrower and its guaranty and
surety obligations pursuant to this Agreement reasonably may be expected to
benefit, directly or indirectly, it; and it has determined that this Agreement
is necessary and convenient to the conduct, promotion and attainment of the
business of such Guarantor and the Borrower.

 

Section 5.03  Solvency.  Such Guarantor (i) is not insolvent as
of the date hereof and will not be rendered insolvent as a result of this
Agreement (after giving effect to Section 2.01(a)), (ii) is not
engaged in a business or a transaction, or about to engage in a business or a
transaction, for which any Property or assets remaining with it constitute
unreasonably small capital, and (iii) does not intend to incur, or believe
it will incur, debts that will be beyond its ability to pay as such debts
mature.

 

Section 5.04  Title; No Other Liens.  Except for the security interest granted to
the Administrative Agent for the ratable benefit of the Secured Parties
pursuant to this Agreement and Excepted Liens, such Grantor is the legal and
beneficial owner of its respective items of the Collateral free and clear of
any and all Liens.  No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement, the Security Instruments or as are
filed to secure Liens permitted by Section 9.03 of the Credit Agreement.

 

Section 5.05  Perfected Second Priority Liens.  The security interests granted pursuant to
this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent
in completed and duly executed form), will constitute valid perfected security
interests in all of the Collateral (other than trucks, trailers and other

 

10

 

motor vehicles covered by a certificate of title law
of any state, Commercial Tort Claims subject to Section 6.15, Letter-of-Credit
Rights less than $500,000 and Deposit Accounts not maintained with the
Administrative Agent or its Affiliates) in favor of the Administrative Agent,
for the ratable benefit of the Secured Parties, as collateral security for such
Grantor’s obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor (except for the First Lien Administrative Agent
and the First Lenders prior to the Discharge of First Lien Obligations) and any
Persons purporting to purchase any Collateral from such Grantor and (b) are
prior to all other Liens on the Collateral in existence on the date hereof
except for Liens granted in connection with the Senior Revolving Credit
Documents and Excepted Liens which have priority over the Liens on the
Collateral by operation of law.  No
effective financing statement or other registration or instrument similar in
effect covering any Collateral is on file in any recording office except any
that has been filed in favor of the Senior Administrative Agent or the Senior
Lenders in connection with the Senior Revolving Credit Documents, those in
favor of the Secured Parties relating to this Agreement and any that has been
filed to perfect or protect any Excepted Lien.

 

Section 5.06  Legal Name, Organizational Status, Chief
Executive Office.  On the date
hereof, the correct legal name of such Grantor, such Grantor’s jurisdiction of
organization, organizational number, taxpayor identification number and the
location of such Grantor’s chief executive office or sole place of business are
specified on Schedule 4.

 

Section 5.07  Prior Names, Addresses, Locations of
Tangible Assets.  Schedule 5 correctly
sets forth (a) all names and trade names that such Grantor has used in the last
five years and (b) the chief executive office of such Grantor over the last
five years (if different from that which is set forth in Section 5.06 above).

 

Section 5.08  Pledged Securities.  The shares (or such other interests) of
Pledged Securities pledged by such Grantor hereunder constitute all the issued
and outstanding shares (or such other interests) of all classes of the capital
stock or other equity interests of each Issuer owned by such Grantor.  All the shares (or such other interests) of
the Pledged Securities have been duly authorized and validly issued and are
fully paid and nonassessable; and such Grantor is the record and beneficial
owner of, and has good title to, the Pledged Securities pledged by it
hereunder, free of any and all Liens except Excepted Liens or options in favor
of, or claims of, any other Person, except the security interest created by
this Agreement or any other Security Instrument, Liens on Property securing the
Debt under the Senior Revolving Credit Documents, and Excepted Liens.

 

Section 5.09  Goods. 
No portion of the Collateral constituting Goods is in the possession of
a bailee that has issued a negotiable or non-negotiable document covering such
Collateral.

 

Section 5.10  Instruments and Chattel Paper.  Such Grantor has delivered to the First Lien
Administrative Agent, as bailee and agent for the Administrative Agent in
accordance with the Intercreditor Agreement, all Collateral constituting
Instruments and Chattel Paper.  No
Collateral constituting Chattel Paper or Instruments contains any statement
therein to the effect that such Collateral has been assigned to an identified
party other than the First Lien Administrative Agent (in its own capacity for
the benefit of the Senior Lenders or in its capacity as bailee for the
Administrative Agent for the benefit of the Lenders, or in both capacities),
and the grant of a 

 

11

 

security interest in such Collateral in favor of the
First Lien Administrative Agent hereunder does not violate the rights of any
other Person as a secured party.

 

Section 5.11  Truth of Information; Accounts.  All information with respect to the
Collateral set forth in any schedule, certificate or other writing at any time
heretofore or hereafter furnished by such Grantor to the Administrative Agent
or any other Secured Party, and all other written information heretofore or
hereafter furnished by such Grantor to the Administrative Agent or any other
Secured Party is and will be true and correct in all material respects as of
the date furnished.  The amount
represented by such Grantor to the Administrative Agent and the Lenders from
time to time as owing by each Account Debtor or by all Account Debtors in
respect of the Accounts, Chattel Paper and Payment Intangibles will at such
time be the correct amount actually owing by such Account Debtor or Account
Debtors thereunder.  The place where each
Grantor keeps its records concerning the Accounts, Chattel Paper and Payment
Intangibles is as set forth on Schedule 4.

 

Section 5.12  Governmental Obligors.  None of the Account Debtors on such Grantor’s
Accounts, Chattel Paper or Payment Intangibles is a Governmental Authority.

 

Section 5.13  Patents and Trademarks.  Schedule 6 hereto includes all Patents and
Patent Licenses owned by such Grantor in its own name as of the date
hereof.  Schedule 7 hereto includes all
Trademarks and Trademark Licenses owned by such Grantor in its own name as of
the date hereof.  To the best of each
such Grantor’s knowledge, each Patent and Trademark is valid, subsisting,
unexpired, enforceable and has not been abandoned.  Except as set forth in either such Schedule,
none of such Patents and Trademarks is the subject of any licensing or
franchise agreement.  No holding,
decision or judgment has been rendered by any Governmental Authority which
would limit, cancel or question the validity of any Patent or Trademark.  No action or proceeding is pending (i) seeking
to limit, cancel or question the validity of any Patent or Trademark, or (ii) which,
if adversely determined, would Material Adverse Effect on the value of any
Patent or Trademark.

 

ARTICLE VI

Covenants

 

Each
Grantor covenants and agrees with the Administrative Agent and the other
Secured Parties that, from and after the date of this Agreement until the
Obligations shall have been paid in full and the total Commitments shall have
terminated:

 

Section 6.01  Covenants in Credit Agreement.  In the case of each Guarantor, such Guarantor
shall take, or shall refrain from taking, as the case may be, each action that
is necessary to be taken or not taken, as the case may be, so that no Default
or Event of Default is caused by the failure to take such action or to refrain
from taking such action by such Guarantor or any of its Subsidiaries.

 

Section 6.02  Maintenance of Perfected Security
Interest; Further Documentation.

 

(a)                                  Such Grantor
shall maintain the security interest created by this Agreement as a perfected
security interest having at least the priority described in Section 5.05 

 

12

 

and shall, in accordance with the terms of the
Intercreditor Agreement, defend such security interest against the claims and
demands of all Persons whomsoever except for Excepted Liens.

 

(b)                                 At any time and
from time to time, upon the request of the Administrative Agent or any other
Secured Party, and at the sole expense of such Grantor, such Grantor will
promptly and duly give, execute, deliver, indorse, file or record any and all
financing statements, continuation statements, amendments, notices (including,
without limitation, notifications to financial institutions and any other
Person), contracts, agreements, assignments, certificates, stock powers or
other instruments, obtain any and all governmental approvals and consents and
take or cause to be taken any and all steps or acts that may be necessary or
advisable or as the Administrative Agent may reasonably request to create,
perfect, establish the priority of, or to preserve the validity, perfection or
priority of, the Liens granted by this Agreement or to enable the
Administrative Agent or any other Secured Party to enforce its rights,
remedies, powers and privileges under this Agreement with respect to such Liens
or to otherwise obtain or preserve the full benefits of this Agreement and the
rights, powers and privileges herein granted .

 

(c)                                  Without
limiting the obligations of the Grantors under Section 6.02(b):  (i) upon the request of the Administrative
Agent or any other Secured Party, such Grantor shall take or cause to be taken
all actions (other than any actions required to be taken by the Administrative
Agent or any Lender) requested by the Administrative Agent to cause the
Administrative Agent to (A) have “control” (within the meaning of Sections
9-104, 9-105, 9-106, and 9-107 of the Colorado UCC) over any Collateral
constituting Deposit Accounts, Electronic Chattel Paper, Investment Property
(including the Pledged Securities), except to the extent that any such
Collateral is subject to the “control” of the First Lien Administrative Agent,
or Letter-of-Credit Rights, including, without limitation, executing and
delivering any agreements, in form and substance satisfactory to the
Administrative Agent, with securities intermediaries, issuers or other Persons
in order to establish “control”, and each Grantor shall promptly notify the
Administrative Agent and the other Secured Parties of such Grantor’s
acquisition of any such Collateral, and (B) be a “protected purchaser” (as
defined in Section 8-303 of the Colorado UCC); (ii) with respect to Collateral
other than certificated securities and goods covered by a document in the
possession of a Person other than such Grantor, the Administrative Agent or the
First Lien Administrative Agent (as bailee for the Administrative Agent), such
Grantor shall obtain written acknowledgment that such Person holds possession
for the Administrative Agent’s benefit; and (iii) with respect to any
Collateral constituting Goods that are in the possession of a bailee, such
Grantor shall provide prompt notice to the Administrative Agent and the other
Secured Parties of any such Collateral then in the possession of such bailee,
and such Grantor shall take or cause to be taken all actions (other than any
actions required to be taken by the Administrative Agent or any other Secured
Party) necessary or requested by the Administrative Agent to cause the
Administrative Agent to have a perfected security interest in such Collateral
under applicable law.

 

(d)                                 This Section 6.02
and the obligations imposed on each Grantor by this Section 6.02 shall be
interpreted as broadly as possible in favor of the Administrative Agent and the
other Secured Parties in order to effectuate the purpose and intent of this
Agreement.

 

Section 6.03  Maintenance of Records.  Such Grantor will keep and maintain at its
own cost and expense satisfactory and complete records of the Collateral,
including, without 

 

13

 

limitation, a record of all payments received and
all credits granted with respect to the Accounts.  For the Administrative Agent’s and the other
Secured Parties’ further security, the Administrative Agent, for the ratable benefit
of the Secured Parties, shall have a security interest in all of such Grantor’s
books and records pertaining to the Collateral, and such Grantor shall turn
over any such books and records to the Administrative Agent or to its
representatives during normal business hours at the request of the
Administrative Agent and shall provide such clerical and other assistance as
may be reasonably requested with regard thereto.

 

Section 6.04  Right of Inspection.  The Administrative Agent and its respective
representatives shall at all times have full and free access during normal
business hours to all the books, correspondence and records of such Grantor,
and the Administrative Agent and its respective representatives may examine the
same, take extracts therefrom and make photocopies thereof and shall at all
times also have the right to enter into and upon any premises where any of the
Collateral (including, without limitation, Inventory or Equipment) is located
for the purpose of inspecting the same, observing its use or otherwise
protecting its interests therein, and such Grantor agrees to render to the
Administrative Agent and its respective representatives, at such Grantor’s sole
cost and expense, such clerical and other assistance as may be reasonably
requested with regard to any of the foregoing; provided, that so long as no
Event of Default has occurred and is continuing, such Grantor shall only be
responsible to reimburse the fees and expenses of the Administrative Agent for
two visits per calendar year, notwithstanding anything to the contrary in this
Agreement.

 

Section 6.05  Further Identification of Collateral.  Such Grantor will furnish to the
Administrative Agent and the Lenders from time to time, at such Grantor’s sole
cost and expense, statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.

 

Section 6.06  Changes in Locations, Name, etc.  Such Grantor recognizes that financing
statements pertaining to the Collateral have been or may be filed where such
Grantor maintains any Collateral or is organized.  Without limitation of any other covenant
herein, such Grantor will not cause or permit (a) any change to be made in its
name, identity or corporate structure or (b) any change to the identity of any
warehouseman, common carrier, other third-party transporter, bailee or any
agent or processor in possession or control of any Collateral or (c) such
Grantor’s jurisdiction of organization or (d) the location of any Collateral,
unless such Grantor shall have first (i) notified the Administrative Agent and
the other Secured Parties of such change at least thirty (30) days prior to the
effective date of such change, and (ii) taken all action reasonably requested
by the Administrative Agent or any other Secured Party for the purpose of
maintaining the perfection and priority of the Administrative Agent’s security
interests under this Agreement.  In any
notice furnished pursuant to this Section 6.06, such Grantor will expressly
state in a conspicuous manner that the notice is required by this Agreement and
contains facts that may require additional filings of financing statements or
other notices for the purposes of continuing perfection of the Administrative
Agent’s security interest in the Collateral.

 

Section 6.07  Compliance with Contractual Obligations.  Such Grantor will perform and comply in all
material respects with all its contractual obligations relating to the
Collateral 

 

14

 

(including, without limitation, with respect to the
goods or services, the sale or lease or rendition of which gave rise or will
give rise to each Account).

 

Section 6.08  Limitations on Dispositions of Collateral.  The Administrative Agent and the other
Secured Parties do not authorize, and such Grantor agrees not to sell,
transfer, lease or otherwise dispose of any of the Collateral, or attempt,
offer or contract to do so except to the extent expressly permitted by the
Credit Agreement.

 

Section 6.09  Pledged Securities.

 

(a)                                  If such Grantor
shall become entitled to receive or shall receive any stock certificate or
other instrument (including, without limitation, any certificate or instrument
representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate or
instrument issued in connection with any reorganization), option or rights in
respect of the capital stock or other equity interests of any Issuer, whether
in addition to, in substitution of, as a conversion of, or in exchange for, any
shares (or such other interests) of the Pledged Securities, or otherwise in
respect thereof, such Grantor shall accept the same as the agent of the
Administrative Agent and the other Secured Parties, hold the same in trust for
the Administrative Agent and the other Secured Parties and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power or other equivalent instrument of transfer acceptable to
the Administrative Agent covering such certificate or instrument duly executed
in blank by such Grantor and with, if the Administrative Agent so requests,
signature guaranteed, to be held by the Administrative Agent, subject to the
terms hereof, as additional collateral security for the Obligations; provided,
however, that if the foregoing occurs prior to the Discharge of First Lien
Obligations, such Grantor shall accept the same as the agent of the First Lien
Administrative Agent (for itself and as bailee for the Administrative Agent)
and the Senior Secured Parties, hold the same in trust for the First Lien Administrative
Agent (for itself and as bailee for the Administrative Agent) and the Senior
Secured Parties and deliver the same forthwith to the First Lien Administrative
Agent, for itself and as bailee for the Administrative Agent, in the exact form
received, duly indorsed by such Grantor to the First Lien Administrative Agent,
if required, together with an undated stock power or other equivalent
instrument of transfer acceptable to the Administrative Agent covering such
certificate or instrument duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
First Lien Administrative Agent, for itself and as bailee for the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations.

 

(b)                                 Subject to the
terms of the Intercreditor Agreement, without the prior written consent of the
Administrative Agent, such Grantor will not (i) unless otherwise permitted
hereby, vote to enable, or take any other action to permit, any Issuer to issue
any stock or other equity interests of any nature or to issue any other
securities or interests convertible into or granting the right to purchase or
exchange for any stock or other equity interests of any nature of any Issuer, (ii)
sell, assign, transfer, exchange or otherwise dispose of, or grant any option
with respect to, the Pledged Securities or Proceeds thereof (except pursuant to
a transaction expressly permitted by the Credit Agreement), (iii) create, incur
or permit to exist any Lien except for Excepted Liens or option in favor of, or
any claim of any Person with respect to, any of the 

 

15

 

Pledged Securities or Proceeds thereof, or any
interest therein, except for the security interests created by this Agreement
or any other Security Instrument, Liens on Property securing the Debt under the
Senior Revolving Credit Documents or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Pledged Securities
or Proceeds thereof.

 

(c)                                  In the case of
each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound
by the terms of this Agreement relating to the Pledged Securities issued by it
and will comply with such terms insofar as such terms are applicable to it, (ii)
it will notify the Administrative Agent promptly in writing of the occurrence
of any of the events described in Section 6.09(a) with respect to the Pledged
Securities issued by it and (iii) the terms of Section 7.01(c) and Section 7.05
shall apply to it, mutatis mutandis,
with respect to all actions that may be required of it pursuant to Section 7.01(c)
or Section 7.05 with respect to the Pledged Securities issued by it.

 

(d)                                 Such Grantor
shall furnish to the Administrative Agent or the First Lien Administrative
Agent, as the case may be, such stock powers and other equivalent instruments
of transfer as may be required by the Administrative Agent to assure the
transferability of and the perfection of the security interest in the Pledged
Securities when and as often as may be reasonably requested by the
Administrative Agent.

 

(e)                                  The Pledged
Securities will at all times constitute not less than 100% of the capital stock
or other equity interests of the Issuer thereof owned by any Grantor.  Each Grantor will not permit any Issuer of
any of the Pledged Securities to issue any new shares (or other interests) of
any class of capital stock or other equity interests of such Issuer without the
prior written consent of the Administrative Agent.

 

Section 6.10  Limitations on Modifications, Waivers,
Extensions of Agreements Giving Rise to Accounts.  Such Grantor will not (i) amend, modify,
terminate or waive any provision of any Chattel Paper, Instrument or any
agreement giving rise to an Account or Payment Intangible in any manner which
could reasonably be expected to have a Material Adverse Effect on the value of
such Chattel Paper, Instrument, Payment Intangible or Account as Collateral, or
(ii) fail to exercise promptly and diligently each and every material right
which it may have under any Chattel Paper, Instrument and each agreement giving
rise to an Account or Payment Intangible (other than any right of termination).  Such Grantor shall deliver to the
Administrative Agent a copy of each material demand, notice or document
received by it relating in any way to any Chattel Paper, Instrument or any
agreement giving rise to an Account or Payment Intangible.

 

Section 6.11  Analysis of Accounts, Etc.  The Administrative Agent shall have the right
from time to time to make test verifications of the Accounts, Chattel Paper and
Payment Intangibles in any manner and through any medium that it reasonably
considers advisable, and each Grantor, at such Grantor’s sole cost and expense,
shall furnish all such assistance and information as the Administrative Agent
may require in connection therewith.  At
any time and from time to time, upon the Administrative Agent’s request and at
the expense of each Grantor, such Grantor shall furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Accounts, Chattel Paper and Payment Intangibles, and
all original and other documents evidencing, and relating to, the agreements
and 

 

16

 

transactions which gave rise to the Accounts,
Chattel Paper and Payment Intangibles, including, without limitation, all
original orders, invoices and shipping receipts.

 

Section 6.12  Instruments and Tangible Chattel Paper.  If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any Instrument or
Tangible Chattel Paper, such Instrument or Tangible Chattel Paper shall be
immediately delivered to the First Lien Administrative Agent, as bailee for the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement.

 

Section 6.13  Maintenance of Equipment.  Such Grantor will maintain each item of
Equipment in good operating condition, ordinary wear and tear and immaterial
impairments of value and damage by the elements excepted, and will provide all
maintenance, service and repairs necessary for such purpose.

 

Section 6.14  Patents and Trademarks.

 

(a)                                  Such Grantor
(either itself or through licensees) will, except with respect to any Trademark
that such Grantor shall reasonably determine is of negligible economic value to
it, (i) continue to use each Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force
free from any claim of abandonment for non-use, (ii) maintain as in the past
the quality of products and services offered under such Trademark, (iii) employ
such Trademark with the appropriate notice of registration, (iv) not adopt or
use any mark which is confusingly similar or a colorable imitation of such
Trademark unless the Administrative Agent, for the ratable benefit of the
Secured Parties, shall obtain a perfected security interest in such mark
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
Trademark may become invalidated.

 

(b)                                 Such Grantor
will not, except with respect to any Patent that such Grantor shall reasonably
determine is of negligible economic value to it, do any act, or omit to do any
act, whereby any Patent may become abandoned or dedicated.

 

(c)                                  Such Grantor
will notify the Administrative Agent and the other Secured Parties immediately
if it knows, or has reason to know, that any application or registration
relating to any Patent or Trademark that is material to the business or
operations of such Grantor or the Grantors taken as a whole may become
abandoned or dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination
or development in, any proceeding in the United States Patent and Trademark
Office or any court or tribunal in any country) regarding such Grantor’s
ownership of any such Patent or Trademark or its right to register the same or
to keep and maintain the same.

 

(d)                                 Whenever a
Grantor, either by itself or through any agent, employee, licensee or designee,
shall file an application for the registration of any Patent or Trademark with
the United States Patent and Trademark Office or any similar office or agency
in any other country or any political subdivision thereof, such Grantor shall
report such filing to the Administrative Agent and the other Secured Parties in
connection with the delivery by the 

 

17

 

Borrower of the compliance certificates required
pursuant to Section 8.01(c) of the Credit Agreement.  Upon request of the Administrative Agent,
such Grantor shall execute and deliver any and all agreements, instruments,
documents, and papers as the Administrative Agent may reasonably request to
evidence the Administrative Agent’s and the other Secured Parties’ security
interest in any Patent or Trademark and the goodwill and General Intangibles of
such Grantor relating thereto or represented thereby, and such Grantor hereby
constitutes the Administrative Agent its attorney-in-fact to execute and file
all such writings for the foregoing purposes, all acts of such attorney being
hereby ratified and confirmed; such power being coupled with an interest is
irrevocable until the Obligations are paid in full and the Commitments are
terminated.

 

(e)                                  Such Grantor
will take all reasonable and necessary steps, including, without limitation, in
any proceeding before the United States Patent and Trademark Office, or any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the Patents and Trademarks
that are material to the business or operations of such Grantor or the Grantors
taken as a whole, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.

 

(f)                                    In the event
that any Patent or Trademark included in the Collateral is infringed,
misappropriated or diluted by a third party, such Grantor shall promptly notify
the Administrative Agent and the other Secured Parties after it learns thereof
and shall, unless such Grantor shall reasonably determine that such Patent or
Trademark is of negligible economic value to such Grantor which determination
such Grantor shall promptly report to the Administrative Agent and the other
Secured Parties, promptly sue for infringement, misappropriation or dilution,
to seek injunctive relief where appropriate and to recover any and all damages
for such infringement, misappropriation or dilution, or take such other actions
as such Grantor shall reasonably deem appropriate under the circumstances to
protect such Patent or Trademark.

 

Section 6.15  Commercial Tort Claims.  If such Grantor shall at any time hold or
acquire a Commercial Tort Claim that satisfies the requirements of the
following sentence, such Grantor shall, within thirty (30) days after such
Commercial Tort Claim satisfies such requirements, notify the Administrative
Agent and the other Secured Parties in a writing signed by such Grantor
containing a brief description thereof, and granting to the Administrative
Agent in such writing (for the benefit of the Secured Parties) a security
interest therein and in the Proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to the
Administrative Agent and the other Secured Parties.  The provisions of the preceding sentence
shall apply only to a Commercial Tort Claim that satisfies the following
requirements:  (i) the monetary value
claimed by or payable to the relevant Grantor in connection with such
Commercial Tort Claim shall exceed $500,000, and either (ii) (A) such Grantor
shall have filed a law suit or counterclaim or otherwise commenced legal
proceedings (including, without limitation, arbitration proceedings) against
the Person against whom such Commercial Tort Claim is made, or (B) such Grantor
and the Person against whom such Commercial Tort Claim is asserted shall have
entered into a settlement agreement with respect to such Commercial Tort
Claim.  In addition, to the extent that
the existence of any Commercial Tort Claim held or acquired by any Grantor is
disclosed by such Grantor in any public filing with the Securities 

 

18

 

Exchange Commission or any successor thereto or
analogous Governmental Authority, or to the extent that the existence of any
such Commercial Tort Claim is disclosed in any press release issued by any
Grantor, then, upon the request of the Administrative Agent, the relevant
Grantor shall, within thirty (30) days after such request is made, transmit to
the Administrative Agent and the other Secured Parties a writing signed by such
Grantor containing a brief description of such Commercial Tort Claim and
granting to the Administrative Agent in such writing (for the benefit of the
Secured Parties) a security interest therein and in the Proceeds thereof, all
upon the terms of this Agreement, with such writing to be in form and substance
satisfactory to the Administrative Agent and the other Secured Parties.

 

Section 6.16  Letter-of-Credit Rights.  If any Grantor shall at any time be entitled
to Letter-of-Credit Rights in excess of $500,000, such Grantor shall notify the
Administrative Agent of such rights in connection with the delivery by the
Borrower of the compliance certificates required pursuant to Section 8.01(c) of
the Credit Agreement.

 

ARTICLE VII

Remedial Provisions

 

Section 7.01  Pledged Securities.

 

(a)                                  Unless an Event
of Default shall have occurred and be continuing and the Administrative Agent
shall have given notice to the relevant Grantor of the Administrative Agent’s
intent to exercise its corresponding rights pursuant to Section 7.01(b), each
Grantor shall be permitted to receive all cash dividends paid in respect of the
Pledged Securities paid in the normal course of business of the relevant
Issuer, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Pledged Securities.

 

(b)                                 If an Event of
Default shall occur and be continuing (and subject to the Intercreditor
Agreement), then at any time in the Administrative Agent’s discretion without
notice, (i) the Administrative Agent shall have the right to receive any and
all cash dividends, payments or other Proceeds paid in respect of the Pledged
Securities and make application thereof to the Obligations in accordance with Section
10.02 of the Credit Agreement, and (ii) any or all of the Pledged Securities
shall be registered in the name of the Administrative Agent or its nominee, and
the Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting
of shareholders (or other equivalent body) of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Pledged
Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the organizational structure of any Issuer, or upon
the exercise by any Grantor or the Administrative Agent of any right, privilege
or option pertaining to such Pledged Securities, and in connection therewith,
the right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to 

 

19

 

exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.

 

(c)                                  Each Grantor
hereby authorizes and instructs each Issuer of any Pledged Securities pledged
by such Grantor hereunder (and each Issuer party hereto hereby agrees) to, upon
the Discharge of First Lien Obligations, (i) comply with any instruction
received by it from the Administrative Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Administrative Agent.

 

(d)                                 After the
occurrence and during the continuation of an Event of Default, if the Issuer of
any Pledged Securities is the subject of bankruptcy, insolvency, receivership,
custodianship or other proceedings under the supervision of any Governmental
Authority, then all rights of the Grantor in respect thereof to exercise the
voting and other consensual rights which such Grantor would otherwise be
entitled to exercise with respect to the Pledged Securities issued by such
Issuer shall cease, and all such rights shall thereupon become vested in the
Administrative Agent (subject to the Intercreditor Agreement) who shall
thereupon have the sole right to exercise such voting and other consensual
rights, but the Administrative Agent shall have no duty to exercise any such
voting or other consensual rights and shall not be responsible for any failure
to do so or delay in so doing.

 

Section 7.02  Collections on Accounts, Etc.  The Administrative Agent hereby authorizes
each Grantor to collect upon the Accounts, Instruments, Chattel Paper and
Payment Intangibles, provided that the Administrative Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default.  Upon
the request of the Administrative Agent at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall notify the
Account Debtors that the applicable Accounts, Chattel Paper and Payment
Intangibles have been assigned to the First Lien Administrative Agent, as
bailee for the Administrative Agent, and for the ratable benefit of the Senior
Lenders and the Secured Parties and that payments in respect thereof shall be
made directly to (a) the First Lien Administrative Agent prior to the Discharge
of First Lien Obligations and (b) the Administrative Agent after the Discharge
of First Lien Obligations.  After the
occurrence and during the continuation of an Event of Default, the
Administrative Agent may in its own name or in the name of others communicate
with the Account Debtors to verify with them to its satisfaction the existence,
amount and terms of any Accounts, Chattel Paper or Payment Intangibles.

 

Section 7.03  Proceeds.  If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of
Default, any payments of Accounts, Instruments, Chattel Paper and Payment
Intangibles, when collected or received by each Grantor, and any other cash or
non-cash Proceeds received by each Grantor upon the sale or other disposition
of any Collateral, shall be forthwith (and, in any event, within two Business
Days) deposited by such Grantor in the exact form received, duly indorsed by
such Grantor to the First Lien Administrative Agent, as agent or bailee of the
Administrative Agent, if required, in a special collateral account maintained
by the First Lien Administrative Agent, subject to

 

20

 

withdrawal by the First Lien Administrative Agent
(for itself and as bailee for the Administrative Agent) for the ratable benefit
of the Senior Lenders prior to the Discharge of First Lien Obligations and
thereafter to withdrawal by the Administrative Agent for the ratable benefit of
the Secured Parties only, as hereinafter provided, and, until so turned over,
shall be held by such Grantor in trust for the First Lien Administrative Agent
for the ratable benefit of the Senior Lenders or the Administrative Agent for
the ratable benefit of the Secured Parties (as applicable) segregated from
other funds of any such Grantor.  Each
deposit of any such Proceeds shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the
deposit.  All Proceeds (including,
without limitation, Proceeds constituting collections of Accounts, Chattel
Paper, Instruments) while held by the First Lien Administrative Agent or the
Administrative Agent (or by any Grantor in trust for the First Lien
Administrative Agent for the ratable benefit of the Senior Lenders or the
Administrative Agent for the ratable benefit of the Secured Parties (as
applicable)) shall continue to be collateral security for all of the
Obligations and shall not constitute payment thereof until applied as
hereinafter provided.  At such intervals
as may be agreed upon by each Grantor and the Administrative Agent (subject to
the Intercreditor Agreement), or, if an Event of Default shall have occurred
and be continuing, at any time at the Administrative Agent’s election (subject
to the Intercreditor Agreement), the Administrative Agent shall apply all or
any part of the funds on deposit in said special collateral account on account
of the Obligations in such order as the Administrative Agent may elect, and any
part of such funds which the Administrative Agent elects not so to apply and
deems not required as collateral security for the Obligations shall be paid
over from time to time by the Administrative Agent to each Grantor or to
whomsoever may be lawfully entitled to receive the same.

 

Section 7.04  Colorado UCC and Other Remedies.

 

(a)                                  If an Event of
Default shall occur and be continuing, the Administrative Agent, on behalf of
the Secured Parties, may exercise in its discretion, in addition to all other
rights, remedies, powers and privileges granted to them in this Agreement, the
other Loan Documents and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights, remedies, powers and
privileges of a secured party under the Colorado UCC (whether the Colorado UCC
is in effect in the jurisdiction where such rights, remedies, powers or
privileges are asserted) or any other applicable law or otherwise available at
law or equity.  Without limiting the
generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or office of
the Administrative Agent or any other Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk.  The Administrative Agent or
any other Secured Party shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in any 

 

21

 

Grantor, which right or equity is hereby waived and
released.  If an Event of Default shall
occur and be continuing, each Grantor further agrees, at the Administrative
Agent’s request (subject to the Intercreditor Agreement), to assemble the
Collateral and make it available to the Administrative Agent at places which
the Administrative Agent shall reasonably select, whether at such Grantor’s
premises or elsewhere.  Any such sale or
transfer by the Administrative Agent either to itself or to any other Person
shall be absolutely free from any claim of right by Grantor, including any
equity or right of redemption, stay or appraisal which Grantor has or may have
under any rule of law, regulation or statute now existing or hereafter
adopted.  Upon any such sale or transfer,
the Administrative Agent shall have the right to deliver, assign and transfer
to the purchaser or transferee thereof the Collateral so sold or transferred.  The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 7.04, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the other Secured Parties hereunder, including,
without limitation, reasonable attorneys’ fees and disbursements, to the
payment in whole or in part of the Obligations, in accordance with Section 10.02
of the Credit Agreement, and only after such application and after the payment
by the Administrative Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615 of the Colorado UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor.  To the extent permitted by applicable law,
each Grantor waives all claims, damages and demands it may acquire against the
Administrative Agent or any other Secured Party arising out of the exercise by
them of any rights hereunder.  If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.

 

(b)                                 In the event
that the Administrative Agent elects not to sell the Collateral, the
Administrative Agent retains its rights to dispose of or utilize the Collateral
or any part or parts thereof in any manner authorized or permitted by law or in
equity, and to apply the proceeds of the same towards payment of the
Obligations.  Each and every method of
disposition of the Collateral described in this Agreement shall constitute
disposition in a commercially reasonable manner.  The Administrative Agent may appoint any
Person as agent to perform any act or acts necessary or incident to any sale or
transfer of the Collateral.

 

Section 7.05  Private Sales of Pledged Securities.  Each Grantor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the Pledged
Securities, by reason of certain prohibitions contained in the Securities Act
and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof.  Each Grantor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner.  The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Securities for the period of
time necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so. 
Each Grantor agrees to use its commercially reasonable efforts to do or
cause to be done all such other acts as may reasonably 

 

22

 

be necessary to make such sale or sales of all or
any portion of the Pledged Securities pursuant to this Section 7.05 valid and
binding and in compliance with any and all other applicable Governmental
Requirements.  Each Grantor further
agrees that a breach of any of the covenants contained in this Section 7.05
will cause irreparable injury to the Administrative Agent and the other Secured
Parties, that the Administrative Agent and the other Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 7.05 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants.

 

Section 7.06  Waiver; Deficiency.  To the extent permitted by applicable law,
each Grantor waives and agrees not to assert any rights or privileges which it
may acquire under the Colorado UCC or any other applicable law.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any other Secured Party to
collect such deficiency.

 

Section 7.07  Non-Judicial Enforcement.  The Administrative Agent may enforce its
rights hereunder without prior judicial process or judicial hearing, and to the
extent permitted by law, each Grantor expressly waives any and all legal rights
which might otherwise require the Administrative Agent to enforce its rights by
judicial process.

 

ARTICLE VIII

The Administrative Agent

 

Section 8.01  Administrative Agent’s Appointment as
Attorney-in-Fact, Etc.

 

(a)                                  Each Grantor hereby
irrevocably constitutes and appoints the Administrative Agent and any officer
or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
reasonably appropriate action and to execute any and all documents and
instruments which may be reasonably necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:

 

(i)                                     pay or
discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs
thereof;

 

(ii)                                  execute, in
connection with any sale provided for in Section 7.04 or Section 7.05, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

 

(iii)                               (A) direct any
party liable for any payment under any of the Collateral to make payment of any
and all moneys due or to become due thereunder directly to the Administrative
Agent or as the Administrative Agent shall direct; (B) take possession of and 

 

23

 

indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Account, Instrument, General Intangible, Chattle Paper or Payment Intangible or
with respect to any other Collateral, and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any all
such moneys due under any Account, Instrument or General Intangible or with
respect to any other Collateral whenever payable; (C) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out of
any Collateral; (D) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (E) receive, change the address for delivery, open and
dispose of mail addressed to any Grantor, and to execute, assign and indorse
negotiable and other instruments for the payment of money, documents of title
or other evidences of payment, shipment or storage for any form of Collateral
on behalf of and in the name of any Grantor; (F) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce
any other right in respect of any Collateral; (G) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral; (H) settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent may
deem appropriate; (I) assign any Patent or Trademark (along with the goodwill
of the business to which any such Trademark pertains), throughout the world for
such term or terms, on such conditions, and in such manner, as the
Administrative Agent shall in its sole discretion determine; and (J) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes, and do, at the
Administrative Agent’s option and such Grantor’s expense, at any time, or from
time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the other Secured Parties’ security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

 

Anything
in this Section 8.01(a) to the contrary notwithstanding, the Administrative
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 8.01(a) unless an Event of Default shall have
occurred and be continuing and in accordance with the Intercreditor Agreement.

 

(b)                                 If any Grantor
fails to perform or comply with any of its agreements contained herein within
the applicable grace periods, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.

 

(c)                                  The expenses of
the Administrative Agent incurred in connection with actions undertaken as
provided in this Section 8.01, together with interest thereon at the
post-default rate specified in Section 3.02(c) of the Credit Agreement from the
date of payment by the Administrative Agent to the date reimbursed by the
relevant Grantor, shall be payable by such Grantor to the Administrative Agent
on demand.

 

24

 

(d)                                 Each Grantor
hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue and in compliance hereof.  All
powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.

 

Section 8.02  Duty of Administrative Agent.  The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Colorado UCC or otherwise, shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account and shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which comparable secured parties accord comparable collateral.  Neither the Administrative Agent, any other
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of
the Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor or
any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.  The
powers conferred on the Administrative Agent and the other Secured Parties
hereunder are solely to protect the Administrative Agent’s and the other
Secured Parties’ interests in the Collateral and shall not impose any duty upon
the Administrative Agent or any other Secured Party to exercise any such
powers.  The Administrative Agent and the
other Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.  To the
fullest extent permitted by applicable law, the Administrative Agent shall be
under no duty whatsoever to make or give any presentment, notice of dishonor,
protest, demand for performance, notice of non-performance, notice of intent to
accelerate, notice of acceleration, or other notice or demand in connection
with any Collateral or the Obligations, or to take any steps necessary to
preserve any rights against any Grantor or other Person or ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not it has or
is deemed to have knowledge of such matters. 
Each Grantor, to the extent permitted by applicable law, waives any
right of marshaling in respect of any and all Collateral, and waives any right
to require the Administrative Agent or any other Secured Party to proceed
against any Grantor or other Person, exhaust any Collateral or enforce any
other remedy which the Administrative Agent or any other Secured Party now has
or may hereafter have against each Grantor, any Grantor or other Person.

 

Section 8.03  Execution of Financing Statements.  Pursuant to the Colorado UCC and any other applicable
law, each Grantor authorizes the Administrative Agent, its counsel or its
representative, at any time and from time to time, to file or record financing
statements, continuation statements, amendments thereto and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the
Administrative Agent reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement.  Additionally, each Grantor authorizes the
Administrative Agent, its counsel or its representative, at any time and from
time to time, to file or record such financing statements that describe the
collateral covered thereby as “all assets of the Grantor”, “all personal
property of the Grantor” or words of similar effect.  A 

 

25

 

photographic or other reproduction of this Agreement
shall be sufficient as a financing statement or other filing or recording
document or instrument for filing or recording in any jurisdiction.

 

Section 8.04  Authority of Administrative Agent.  Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect
to any action taken by the Administrative Agent or the exercise or non-exercise
by the Administrative Agent of any option, voting right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Administrative Agent and the other Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such authority.

 

ARTICLE IX

Subordination of Indebtedness

 

Section 9.01  Subordination of All Guarantor Claims.  As used herein, the term “Guarantor Claims”
shall mean all debts and obligations of the Borrower or any other Grantor to
any Grantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation of the debtor thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or obligations be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by. After and during the continuation of an Event of Default, no
Grantor shall receive or collect, directly or indirectly, from any obligor in
respect thereof any amount upon the Guarantor Claims.

 

Section 9.02  Claims in Bankruptcy.  In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief or other insolvency proceedings
involving any Grantor, the Administrative Agent on behalf of the Secured
Parties shall have the right to prove their claim in any proceeding, so as to
establish their rights hereunder and receive directly from the receiver,
trustee or other court custodian, dividends and payments which would otherwise
be payable upon Guarantor Claims.  Each
Grantor hereby assigns such dividends and payments to the Administrative Agent
for the benefit of the Secured Parties for application against the Obligations
as provided under Section 10.02 of the Credit Agreement.  Should any Agent or Secured Party receive,
for application upon the Obligations, any such dividend or payment which is
otherwise payable to any Grantor, and which, as between such Grantor, shall
constitute a credit upon the Guarantor Claims, then upon payment in full of the
Obligations, the intended recipient shall become subrogated to the rights of the
Administrative Agent and the other Secured Parties to the extent that such
payments to the Administrative Agent and the other Secured Parties on the
Guarantor Claims have contributed toward the liquidation of the Obligations,
and such subrogation shall be with respect to that proportion of the
Obligations which would have been unpaid if the Administrative Agent and the
other Secured Parties had not received dividends or payments upon the Guarantor
Claims.

 

26

 

Section 9.03  Payments Held in Trust.  In the event that notwithstanding Section 9.01
and Section 9.02, any Grantor should receive any funds, payments, claims or
distributions which is prohibited by such Sections, then it agrees: (a) to hold
in trust prior to the Discharge of First Lien Obligations for the First Lien
Administrative Agent and the Senior Lenders and after the Discharge of First
Lien Obligations for the Administrative Agent and the other Secured Parties an
amount equal to the amount of all funds, payments, claims or distributions so
received, and (b) that it shall have absolutely no dominion over the amount of
such funds, payments, claims or distributions except to pay them promptly to
the First Lien Administrative Agent for the benefit of the Senior Lenders or to
the Administrative Agent, for the benefit of the Secured Parties (as
applicable); and each Grantor covenants promptly to pay the same to the First
Lien Administrative Agent or the Administrative Agent (as applicable).

 

Section 9.04  Liens Subordinate.  Each Grantor agrees that, until the
Obligations are paid in full and the total Commitments terminated, any Liens
securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any Liens securing payment of the Obligations, regardless of
whether such encumbrances in favor of such Grantor, the Administrative Agent or
any other Secured Party presently exist or are hereafter created or
attach.  Without the prior written consent
of the Administrative Agent, no Grantor, during the period in which any of the
Obligations are outstanding or the total Commitments are in effect, shall (a) exercise
or enforce any creditor’s right it may have against any debtor in respect of
the Guarantor Claims, or (b) foreclose, repossess, sequester or otherwise take
steps or institute any action or proceeding (judicial or otherwise, including
without limitation the commencement of or joinder in any liquidation,
bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce
any Lien held by it.

 

Section 9.05  Notation of Records.  Upon the request of the Administrative Agent,
all promissory notes and all accounts receivable ledgers or other evidence of
the Guarantor Claims accepted by or held by any Grantor shall contain a
specific written notice thereon that the indebtedness evidenced thereby is
subordinated under the terms of this Agreement and the First Lien Guarantee and
Collateral Agreement.

 

ARTICLE X

Miscellaneous

 

Section 10.01  Waiver.  No failure on the part of the Administrative
Agent or any other Secured Party to exercise and no delay in exercising, and no
course of dealing with respect to, any right, remedy, power or privilege under
any of the Loan Documents shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege under any of the Loan
Documents preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. 
The rights, remedies, powers and privileges provided herein are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.  The exercise by the
Administrative Agent of any one or more of the rights, powers and remedies
herein shall not be construed as a waiver of any other rights, powers and
remedies, including, without limitation, any rights of set-off.

 

Section 10.02  Notices.  All notices and other communications provided
for herein shall be given in the manner and subject to the terms of Section 12.01
of the Credit Agreement; 

 

27

 

provided that any such notice, request or demand to
or upon any Guarantor shall be addressed to such Guarantor at its notice
address set forth on Schedule 1.

 

Section 10.03  Payment of Expenses, Indemnities, Etc.

 

(a)                                  Each Grantor
agrees to pay or promptly reimburse the Administrative Agent and each other
Secured Party for all advances, charges, costs and expenses (including, without
limitation, all costs and expenses of holding, preparing for sale and selling,
collecting or otherwise realizing upon the Collateral and all attorneys’ fees,
legal expenses and court costs) incurred by any Secured Party in connection
with the exercise of its respective rights and remedies hereunder, including,
without limitation, any advances, charges, costs and expenses that may be
incurred in any effort to enforce any of the provisions of this Agreement or
any obligation of any Grantor in respect of the Collateral or in connection
with (i) the preservation of the Lien of, or the rights of the Administrative
Agent or any other Secured Party under this Agreement, (ii) any actual or
attempted sale, lease, disposition, exchange, collection, compromise,
settlement or other realization in respect of, or care of, the Collateral, including
all such costs and expenses incurred in any bankruptcy, reorganization, workout
or other similar proceeding, or (iii) collecting against such Grantor under the
guarantee contained in Article II or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such Grantor
is a party.

 

(b)                                 Each Grantor
agrees to pay, and to save the Administrative Agent and the other Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, reasonable costs, reasonable expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
court costs and reasonable attorneys’ fees, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement) incurred because of, incident to, or with
respect to, the Collateral (including, without limitation, any exercise of
rights or remedies in connection therewith) or the execution, delivery,
enforcement, performance and administration of this Agreement, to the extent
the Borrower would be required to do so pursuant to Section 12.03 of the Credit
Agreement.  All amounts for which any
Grantor is liable pursuant to this Section 10.03 shall be due and payable by
such Grantor to the Secured Parties upon demand.

 

Section 10.04  Amendments in Writing.  None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 12.02 of the Credit Agreement.

 

Section 10.05  Successors and Assigns.  This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the other Secured Parties and their successors and
assigns permitted under the Credit Agreement; provided that except as set forth
in Section 9.11 of the Credit Agreement, no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent and the Lenders.

 

28

 

Section 10.06  Invalidity.  In the event that any one or more of the
provisions contained in this Agreement or in any of the Loan Documents to which
a Grantor is a party shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or such other Loan
Document and the remaining provisions hereof shall remain in full force and
effect and shall be liberally construed to carry out the provisions and intent
hereof; provided, if any one or more of the provisions contained in this
Agreement shall be determined or held to be invalid or unenforceable because
such provision is overly broad as to duration, geographic scope, activity,
subject or otherwise, such provision shall be deemed amended (and any court or
other tribunal shall be entitled to reform this Agreement accordingly) by
limiting and reducing it to the extent necessary to make such provision valid
and enforceable

 

Section 10.07  Counterparts.  This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.

 

Section 10.08  Survival.  The obligations of the parties under Section 10.03
shall survive the repayment of the Loans and the termination of the Credit
Agreement and total Commitments.  To the
extent that any payments on the Obligations or proceeds of any Collateral are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Obligations so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent’s and
the other Secured Parties’ Liens, security interests, rights, powers and
remedies under this Agreement and each Security Instrument shall continue in
full force and effect.  In such event,
each Security Instrument shall be automatically reinstated and each Grantor
shall take such action as may be reasonably requested by the Administrative Agent
and the other Secured Parties to effect such reinstatement.

 

Section 10.09  Captions.  Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.

 

Section 10.10  No Oral Agreements.  The Loan Documents (other than the Letters of
Credit) embody the entire agreement and understanding between the parties and
supersede all other agreements and understandings between such parties relating
to the subject matter hereof and thereof. 
The Loan Documents represent the final agreement between the parties and
may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties.  There
are no unwritten oral agreements between the parties.

 

Section 10.11  Governing Law; Submission to Jurisdiction.

 

(a)                                  This Agreement
shall be governed by, and construed in accordance with, the laws of the State
of Colorado.

 

(b)                                 Any legal
action or proceeding with respect to this Agreement or any other Loan Documents
to which a Grantor is a party shall be brought in the courts of the State of 

 

29

 

Colorado or of the United States of America for the
District of Colorado, and each of the Lenders, the Administrative Agent and the
Grantors hereby accepts for itself and (to the extent permitted by law) in
respect of its Property, generally and unconditionally, the jurisdiction of the
aforesaid courts.  Each of the Lenders,
the Administrative Agent and the Grantors hereby irrevocably waives any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens, which it may now or hereafter
have to the bringing of any such action or proceeding in such respective jurisdictions.  This submission to jurisdiction is
non-exclusive and does not preclude the Administrative Agent or any Lender from
obtaining jurisdiction over such Grantor in any court otherwise having
jurisdiction.

 

(c)                                  Each of the
Lenders, the Administrative Agent and the Grantors irrevocably consents to the
service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Person at the address specified on its signature page of
this Agreement or the Credit Agreement, as applicable, such service to become
effective thirty (30) days after such mailing. 
Nothing herein shall affect the right of the Administrative Agent or any
Lender or any holder of a Note or Grantor to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
such Grantor in any other jurisdiction.

 

(d)                                 Each Grantor
and each Lender hereby (i) irrevocably and unconditionally waive, to the
fullest extent permitted by law, trial by jury in any legal action or
proceeding relating to this Agreement or any other Loan Document and for any
counterclaim therein; (ii) irrevocably waive, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any such
litigation any special, exemplary, punitive or consequential damages, or
damages other than, or in addition to, actual damages; (iii) certify that no
party hereto nor any representative or agent of counsel for any party hereto
has represented, expressly or otherwise, or implied that such party would not,
in the event of litigation, seek to enforce the foregoing waivers, and (iv) acknowledge
that it has been induced to enter into this Agreement, the Loan Documents and
the transactions contemplated hereby and thereby by, among other things, the
mutual waivers and certifications contained in this Section 10.11.

 

Section 10.12  Acknowledgments.  Each Grantor hereby acknowledges that:

 

(a)                                  it has been
advised by counsel in the negotiation, execution and delivery of this Agreement
and the other Loan Documents to which it is a party;

 

(b)                                 neither the
Administrative Agent nor any other Secured Party has any fiduciary relationship
with or duty to any Grantor arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Grantors,
on the one hand, and the Administrative Agent and the other Secured Parties, on
the other hand, in connection herewith or therewith is solely that of debtor
and creditor; and

 

(c)                                  no joint
venture is created hereby or by the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Secured Parties or
among the Grantors and the Lenders.

 

30

 

(d)           each of the parties hereto specifically agrees that it has
a duty to read this Agreement and the Security Instruments and agrees that it
is charged with notice and knowledge of the terms of this Agreement and the
Security Instruments; that it has in fact read this Agreement and is fully
informed and has full notice and knowledge of the terms, conditions and effects
of this Agreement; that it has been represented by independent legal counsel of
its choice throughout the negotiations preceding its execution of this
Agreement and the Security Instruments; and has received the advice of its
attorney in entering into this Agreement and the Security Instruments; and that
it recognizes that certain of the terms of this Agreement and the Security
Instruments result in one party assuming the liability inherent in some aspects
of the transaction and relieving the other party of its responsibility for such
liability.  Each party hereto agrees and
covenants that it will not contest the validity or enforceability of any
exculpatory provision of this Agreement and the Security Instruments on the
basis that the party had no notice or knowledge of such provision or that the
provision is not “conspicuous.”

 

(e)           each Grantor warrants and agrees that each of the waivers
and consents set forth in this Agreement are made voluntarily and
unconditionally after consultation with outside legal counsel and with full
knowledge of their significance and consequences, with the understanding that
events giving rise to any defense or right waived may diminish, destroy or
otherwise adversely affect rights which such Grantor otherwise may have against
the Borrower, any other Grantor, the Secured Parties or any other Person or
against any collateral.  If,
notwithstanding the intent of the parties that the terms of this Agreement
shall control in any and all circumstances, any such waivers or consents are
determined to be unenforceable under applicable law, such waivers and consents
shall be effective to the maximum extent permitted by law.

 

Section 10.13  Additional Grantors.  Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 8.14 of
the Credit Agreement and is not a signatory hereto shall become a Grantor for
all purposes of this Agreement upon execution and delivery by such Subsidiary
of an Assumption Agreement in the form of Annex I hereto.

 

Section 10.14  Set-Off.  Each Grantor agrees that, in addition to (and
without limitation of) any right of set-off, bankers’ lien or counterclaim a
Secured Party may otherwise have, each Secured Party shall have the right and
be entitled (after consultation with the Administrative Agent), at its option,
to offset balances held by it or by any of its Affiliates for account of any
Grantor or any Subsidiary at any of its offices, in United States dollars or in
any other currency against any principal of or interest on any of such Secured
Party’s Loans, or any other amount due and payable to such Secured Party
hereunder, which is not paid when due (regardless of whether such balances are
then due to such Person), in which case it shall promptly notify the Borrower
and the Administrative Agent thereof, provided that such Secured Party’s
failure to give such notice shall not affect the validity thereof.

 

Section 10.15  Releases.

 

(a)           Release Upon Payment in Full.  The grant of a security interest hereunder
and all of rights, powers and remedies in connection herewith shall remain in
full force and effect until the Administrative Agent has (i) retransferred
and delivered all Collateral in its possession to the Grantors, and (ii) executed
a written release or termination statement and 

 

31

 

reassigned to the Grantors without recourse or
warranty any remaining Collateral and all rights conveyed hereby.  Upon the sale, transfer or other disposition
of Collateral permitted pursuant to the terms of Section 9.12 of the
Credit Agreement, the Administrative Agent, at the written request and expense
of the Borrower, will promptly release such Collateral to the Grantors.  Additionally, upon the complete payment of
the Obligations, the termination of the Credit Agreement and the total
Commitments and the compliance by the Grantors with all covenants and
agreements hereof, the Administrative Agent, at the written request and expense
of the Borrower, will promptly release, reassign and transfer the Collateral to
the Grantors and declare this Agreement to be of no further force or effect.

 

(b)           Further Assurances. 
If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall promptly execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral and the capital stock of such Grantor.  At the request and sole expense of the Borrower,
a Grantor shall be released from its obligations hereunder in the event that
all the capital stock of such Grantor shall be sold, transferred or otherwise
disposed of in a transaction permitted by the Credit Agreement; provided that
the Borrower shall have delivered to the Administrative Agent, at least ten
Business Days prior to the date of the proposed release, a written request for
release identifying the relevant Grantor and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses in
connection therewith, together with a certification by the Borrower stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents.

 

(c)           Retention in Satisfaction.  Except as may be expressly applicable
pursuant to Section 9-620 of the Colorado UCC, no action taken or omission
to act by the Administrative Agent or the other Secured Parties hereunder,
including, without limitation, any exercise of voting or consensual rights or
any other action taken or inaction, shall be deemed to constitute a retention
of the Collateral in satisfaction of the Obligations or otherwise to be in full
satisfaction of the Obligations, and the Obligations shall remain in full force
and effect, until the Administrative Agent and the other Secured Parties shall
have applied payments (including, without limitation, collections from
Collateral) towards the Obligations in the full amount then outstanding or
until such subsequent time as is provided in Section 10.15(a).

 

Section 10.16  Reinstatement.  The obligations of each Grantor under this
Agreement (including, without limitation, with respect to the guarantee
contained in Article II and the provision of collateral herein) shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any other
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Grantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Grantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.

 

Section 10.17  Acceptance.  Each Grantor hereby expressly waives notice
of acceptance of this Agreement, acceptance on the part of the Administrative
Agent and the other Secured 

 

32

 

Parties being conclusively presumed by their request
for this Agreement and delivery of the same to the Administrative Agent.

 

Section 10.18  Intercreditor Agreement.  Reference is made to the Intercreditor
Agreement dated as of November 30, 2010 (as amended, restated,
supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among the Company, Wells Fargo
Bank, National Association, as First Lien Administrative Agent (as defined
therein), and Wells Fargo Energy Capital, Inc., as Second Lien
Administrative Agent (as defined therein). Notwithstanding anything herein to
the contrary, the lien and security interest granted to the Administrative
Agent, for the benefit of the Secured Parties, pursuant to this Agreement and
the exercise of any right or remedy by the Administrative Agent and the other
Secured Parties hereunder are subject to the provisions of the Intercreditor
Agreement.  In the event of any conflict
or inconsistency between the provisions of the Intercreditor Agreement and this
Agreement, the provisions of the Intercreditor Agreement shall control.

 

[Reminder of Page Intentionally Left Blank.

 

Signature Page of Borrower and Administrative
Agent Follows.]

 

33

 

IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

	
  BORROWER:

  	
  KODIAK
  OIL & GAS (USA) INC., a Colorado corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James P. Henderson

  
	
   

  	
   

  	
  James
  P. Henderson

  
	
   

  	
   

  	
  Chief
  Financial Officer

  

 

SIGNATURE PAGE

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

Acknowledged
and Agreed to as

of the date hereof by:

 

	
  ADMINISTRATIVE
  AGENT:

  	
  WELLS
  FARGO ENERGY CAPITAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bryan McDavid

  
	
   

  	
   

  	
  Bryan
  McDavid

  
	
   

  	
   

  	
  Vice
  President

  

 

SIGNATURE PAGE

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

Schedule 1

 

NOTICE ADDRESSES OF GRANTORS

 

	
  1.

  	
  Kodiak
  Oil & Gas (USA) Inc.

  
	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
   

  
	
   

  	
  1625
  Broadway, Suite 250

  
	
   

  	
  Denver,
  Colorado 80202

  
	
   

  	
  Attention:
  James P. Henderson

  
	
   

  	
  Telephone:
  303-592-8030

  
	
   

  	
  Facsimile:
  303-592-8071

  

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

Schedule 2

 

DESCRIPTION OF PLEDGED SECURITIES

 

None.

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

Schedule 3

 

FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS

 

Uniform
Commercial Code Filings

 

1.             Filing of UCC-1 financing statement
with the Secretary of State of the State of Colorado

 

Actions
with respect to Pledged Securities

 

1.             Delivery to the Senior
Administrative Agent of all Pledged Securities consisting of certificated
securities, in each case properly endorsed for transfer in blank.

 

Description
of Commercial Tort Claims

 

None

 

Actions
with respect to Letter-of-Credit Rights in excess of $500,000

 

None

 

Actions
with respect to Equipment Covered by a Certificate of Title

 

Notation
of the Administrative Agent’s security interest on the certificate of title of
each item of Equipment

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

Schedule 4

 

CORRECT LEGAL NAME, LOCATION OF JURISDICTION OF

ORGANIZATION, ORGANIZATIONAL IDENTIFICATION

NUMBER, TAXPAYOR IDENTIFICATION NUMBER AND

CHIEF EXECUTIVE OFFICE

 

	
  1.

  	
  Kodiak
  Oil & Gas (USA) Inc., a Colorado corporation

  
	
   

  	
  Organizational
  Identification Number: 20031303362

  
	
   

  	
  Taxpayer
  Identification Number: 57-1191218

  
	
   

  	
  Chief
  Executive Office:

  	
  1625
  Broadway, Suite 250

  
	
   

  	
   

  	
  Denver,
  Colorado 80202

  

 

GUARANTEE
AND COLLATERAL AGREEMENT

 

 

Schedule 5

 

PRIOR NAMES AND PRIOR CHIEF EXECUTIVE OFFICE

 

	
  1.

  	
  Kodiak
  Oil & Gas (USA) Inc., a Colorado corporation

  
	
   

  	
  Prior
  Names: None

  
	
   

  	
  Prior
  Chief Executive Office:

  	
  1625
  Broadway, Suite 330

  
	
   

  	
   

  	
  Denver, Colorado 80202

  

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

Schedule 6

 

PATENTS AND PATENT LICENSES

 

None.

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

Schedule 7

 

TRADEMARKS AND TRADEMARK LICENSES

 

None.

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

ACKNOWLEDGMENT AND CONSENT

 

The
undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of November     , 2010 (the “Agreement”),
made by the Grantors parties thereto for the benefit of Wells Fargo Energy
Capital, Inc., as Administrative Agent. 
The undersigned agrees for the benefit of the Administrative Agent and
the Lenders as follows:

 

1.             The undersigned will be bound by
the terms of the Agreement and will comply with such terms insofar as such
terms are applicable to the undersigned.

 

2.             The terms of Sections 6.02(c) and
6.03 of the Agreement shall apply to it, mutatis  mutandis, with respect to all actions that may be required
of it pursuant to Sections 6.02(c) and 6.03 of the Agreement.

 

	
   

  	
  [NAME OF ISSUER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  
					

 

*This
consent is necessary only with respect to any Issuer which is not also a
Grantor.  This consent may be modified or
eliminated with respect to any Issuer that is not controlled by a Grantor.

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

Annex I

 

ASSUMPTION AGREEMENT

 

ASSUMPTION
AGREEMENT, dated as of
                    ,
201    , made by
                              
                                                                      ,
a
                            
corporation (the “Additional Grantor”), in favor of WELLS FARGO ENERGY CAPITAL,
INC., as administrative agent (in such capacity, the “Administrative Agent”)
for the banks and other financial institutions (the “Lenders”) parties to the
Credit Agreement referred to below.  All
capitalized terms not defined herein shall have the meaning ascribed to them in
such Credit Agreement.

 

W I T N E S S E T H:

 

WHEREAS,
KODIAK OIL & GAS (USA) INC. (the “Borrower”), the Lenders, the
Administrative Agent and the other Agents, have entered into a Second Lien Credit
Agreement, dated as of November     , 2010 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”);

 

WHEREAS,
in connection with the Credit Agreement, the Borrower and certain of its
Subsidiaries have entered into the Guarantee and Collateral Agreement, dated as
of November     , 2010 (as amended, supplemented or
otherwise modified from time to time, the “Guarantee and Collateral Agreement”)
in favor of the Administrative Agent for the benefit of the Lenders and Affiliates
of the Lenders;

 

WHEREAS,
the Credit Agreement requires the Additional Grantor to become a party to the
Guarantee and Collateral Agreement; and

 

WHEREAS,
the Additional Grantor has agreed to execute and deliver this Assumption
Agreement in order to become a party to the Guarantee and Collateral Agreement;

 

NOW,
THEREFORE, IT IS AGREED:

 

1.             Guarantee and Collateral
Agreement.  By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 10.13 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor thereunder with the same
force and effect as if originally named therein as a Grantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder and expressly grants to the
Administrative Agent, for the benefit of the Secured Parties (as defined in the
Guarantee and Collateral Agreement), a security interest in all Collateral owned
by such Additional Grantor to secure all of such Additional Grantor’s
obligations and liabilities thereunder. 
The information set forth in Annex 1-A hereto is hereby added to the
information set forth in Schedules 1 through 5 to the Guarantee and Collateral
Agreement.  The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Article V of the Guarantee and Collateral Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

 

2.             Governing Law.  THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
COLORADO.

 

IN
WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

	
   

  	
  [ADDITIONAL GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

Annex I - 2EXHIBIT 4.5

 

FORM OF INDENTURE TO BE
ENTERED INTO BETWEEN 

STR HOLDINGS, INC. AND U.S. BANK NATIONAL ASSOCIATION

 

 

STR HOLDINGS, INC.

 

 

INDENTURE

 

Dated as of

 

 

U.S.
BANK NATIONAL ASSOCIATION

 

as Trustee

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I.

  	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
  1

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
  Section 1.2.

  	
  Other
  Definitions

  	
  5

  
	
  Section 1.3.

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
  5

  
	
  Section 1.4.

  	
  Rules of
  Construction

  	
  6

  
	
  ARTICLE II.

  	
  THE SECURITIES

  	
  6

  
	
  Section 2.1.

  	
  Issuable
  in Series

  	
  6

  
	
  Section 2.2.

  	
  Establishment
  of Terms of Series of Securities

  	
  7

  
	
  Section 2.3.

  	
  Execution
  and Authentication

  	
  9

  
	
  Section 2.4.

  	
  Registrar
  and Paying Agent

  	
  10

  
	
  Section 2.5.

  	
  Paying
  Agent to Hold Money in Trust

  	
  11

  
	
  Section 2.6.

  	
  Securityholder
  Lists

  	
  11

  
	
  Section 2.7.

  	
  Transfer
  and Exchange

  	
  12

  
	
  Section 2.8.

  	
  Mutilated,
  Destroyed, Lost and Stolen Securities

  	
  12

  
	
  Section 2.9.

  	
  Outstanding
  Securities

  	
  13

  
	
  Section 2.10.

  	
  Treasury
  Securities

  	
  13

  
	
  Section 2.11.

  	
  Temporary
  Securities

  	
  14

  
	
  Section 2.12.

  	
  Cancellation

  	
  14

  
	
  Section 2.13.

  	
  Defaulted
  Interest

  	
  14

  
	
  Section 2.14.

  	
  Global
  Securities

  	
  14

  
	
  Section 2.15.

  	
  CUSIP
  Numbers

  	
  16

  
	
  ARTICLE III.

  	
  REDEMPTION

  	
  16

  
	
  Section 3.1.

  	
  Notice
  to Trustee

  	
  16

  
	
  Section 3.2.

  	
  Selection
  of Securities to be Redeemed

  	
  16

  
	
  Section 3.3.

  	
  Notice
  of Redemption

  	
  16

  
	
  Section 3.4.

  	
  Effect
  of Notice of Redemption

  	
  17

  
	
  Section 3.5.

  	
  Deposit
  of Redemption Price

  	
  17

  
	
  Section 3.6.

  	
  Securities
  Redeemed in Part

  	
  17

  
	
  ARTICLE IV.

  	
  COVENANTS

  	
  17

  
	
  Section 4.1.

  	
  Payment
  of Principal and Interest

  	
  17

  
				

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 4.2.

  	
  SEC
  Reports

  	
  18

  
	
  Section 4.3.

  	
  Compliance
  Certificate

  	
  18

  
	
  Section 4.4.

  	
  Stay,
  Extension and Usury Laws

  	
  18

  
	
  Section 4.5.

  	
  Corporate
  Existence

  	
  18

  
	
  Section 4.6.

  	
  Taxes

  	
  19

  
	
  ARTICLE V.

  	
  SUCCESSORS

  	
  19

  
	
  Section 5.1.

  	
  When
  Company May Merge, Etc.

  	
  19

  
	
  Section 5.2.

  	
  Successor
  Corporation Substituted

  	
  19

  
	
  ARTICLE VI.

  	
  DEFAULTS AND REMEDIES

  	
  20

  
	
  Section 6.1.

  	
  Events
  of Default

  	
  20

  
	
  Section 6.2.

  	
  Acceleration
  of Maturity; Rescission and Annulment

  	
  21

  
	
  Section 6.3.

  	
  Collection
  of Indebtedness and Suits for Enforcement by Trustee

  	
  22

  
	
  Section 6.4.

  	
  Trustee
  May File Proofs of Claim

  	
  23

  
	
  Section 6.5.

  	
  Trustee
  May Enforce Claims Without Possession of Securities

  	
  24

  
	
  Section 6.6.

  	
  Application
  of Money Collected

  	
  24

  
	
  Section 6.7.

  	
  Limitation on Suits

  	
  24

  
	
  Section 6.8.

  	
  Unconditional
  Right of Holders to Receive Principal and Interest

  	
  25

  
	
  Section 6.9.

  	
  Restoration
  of Rights and Remedies

  	
  25

  
	
  Section 6.10.

  	
  Rights
  and Remedies Cumulative

  	
  25

  
	
  Section 6.11.

  	
  Delay
  or Omission Not Waiver

  	
  26

  
	
  Section 6.12.

  	
  Control
  by Holders

  	
  26

  
	
  Section 6.13.

  	
  Waiver
  of Past Defaults

  	
  26

  
	
  Section 6.14.

  	
  Undertaking
  for Costs

  	
  27

  
	
  ARTICLE VII.

  	
  TRUSTEE

  	
  27

  
	
  Section 7.1.

  	
  Duties
  of Trustee

  	
  27

  
	
  Section 7.2.

  	
  Rights
  of Trustee

  	
  28

  
	
  Section 7.3.

  	
  Individual
  Rights of Trustee

  	
  29

  
	
  Section 7.4.

  	
  Trustee’s
  Disclaimer

  	
  29

  
				

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 7.5.

  	
  Notice
  of Defaults

  	
  29

  
	
  Section 7.6.

  	
  Reports
  by Trustee to Holders

  	
  30

  
	
  Section 7.7.

  	
  Compensation
  and Indemnity

  	
  30

  
	
  Section 7.8.

  	
  Replacement
  of Trustee

  	
  31

  
	
  Section 7.9.

  	
  Successor
  Trustee by Merger, Etc.

  	
  32

  
	
  Section 7.10.

  	
  Eligibility;
  Disqualification

  	
  32

  
	
  Section 7.11.

  	
  Preferential
  Collection of Claims Against Company

  	
  32

  
	
  ARTICLE VIII.

  	
  SATISFACTION AND DISCHARGE; DEFEASANCE

  	
  32

  
	
  Section 8.1.

  	
  Satisfaction
  and Discharge of Indenture

  	
  32

  
	
  Section 8.2.

  	
  Application
  of Trust Funds; Indemnification

  	
  33

  
	
  Section 8.3.

  	
  Legal
  Defeasance of Securities of any Series

  	
  34

  
	
  Section 8.4.

  	
  Covenant
  Defeasance

  	
  35

  
	
  Section 8.5.

  	
  Repayment
  to Company

  	
  37

  
	
  Section 8.6.

  	
  Reinstatement

  	
  37

  
	
  ARTICLE IX.

  	
  AMENDMENTS AND WAIVERS

  	
  37

  
	
  Section 9.1.

  	
  Without
  Consent of Holders

  	
  37

  
	
  Section 9.2.

  	
  With
  Consent of Holders

  	
  38

  
	
  Section 9.3.

  	
  Limitations

  	
  38

  
	
  Section 9.4.

  	
  Compliance
  with Trust Indenture Act

  	
  39

  
	
  Section 9.5.

  	
  Revocation
  and Effect of Consents

  	
  39

  
	
  Section 9.6.

  	
  Notation
  on or Exchange of Securities

  	
  40

  
	
  Section 9.7.

  	
  Trustee
  Protected

  	
  40

  
	
  ARTICLE X.

  	
  MISCELLANEOUS

  	
  40

  
	
  Section 10.1.

  	
  Trust
  Indenture Act Controls

  	
  40

  
	
  Section 10.2.

  	
  Notices

  	
  40

  
	
  Section 10.3.

  	
  Communication
  by Holders with Other Holders

  	
  41

  
	
  Section 10.4.

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
  41

  
	
  Section 10.5.

  	
  Statements
  Required in Certificate or Opinion

  	
  41

  
	
  Section 10.6.

  	
  Rules by
  Trustee and Agents

  	
  42

  
	
  Section 10.7.

  	
  Legal
  Holidays

  	
  42

  
				

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 10.8.

  	
  No
  Recourse Against Others

  	
  42

  
	
  Section 10.9.

  	
  Counterparts

  	
  42

  
	
  Section 10.10.

  	
  Governing
  Laws

  	
  42

  
	
  Section 10.11.

  	
  No
  Adverse Interpretation of Other Agreements

  	
  42

  
	
  Section 10.12.

  	
  Successors

  	
  43

  
	
  Section 10.13.

  	
  Severability

  	
  43

  
	
  Section 10.14.

  	
  Table
  of Contents, Headings, Etc.

  	
  43

  
	
  Section 10.15.

  	
  Securities
  in a Foreign Currency or in ECU

  	
  43

  
	
  Section 10.16.

  	
  Judgment
  Currency

  	
  44

  
	
  ARTICLE XI.

  	
  SINKING FUNDS

  	
  45

  
	
  Section 11.1.

  	
  Applicability
  of Article

  	
  45

  
	
  Section 11.2.

  	
  Satisfaction
  of Sinking Fund Payments with Securities

  	
  45

  
	
  Section 11.3.

  	
  Redemption
  of Securities for Sinking Fund

  	
  46

  
				

 

iv

 

STR HOLDINGS, INC.

 

Reconciliation and tie
between Trust Indenture Act of 1939, as amended, and 

Indenture, dated as of                    
, 20

 

	
  Section 310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  Not
  Applicable

  
	
  (a)(4)

  	
   

  	
  Not
  Applicable

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.10

  
	
  Section 311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  Not
  Applicable

  
	
  Section 312(a)

  	
   

  	
  2.6

  
	
  (b)

  	
   

  	
  10.3

  
	
  (c)

  	
   

  	
  10.3

  
	
  Section 313(a)

  	
   

  	
  7.6

  
	
  (b)(1)

  	
   

  	
  7.6

  
	
  (b)(2)

  	
   

  	
  7.6

  
	
  (c)(1)

  	
   

  	
  7.6

  
	
  (d)

  	
   

  	
  7.6

  
	
  Section 314(a)(1)

  	
   

  	
  4.2

  
	
  (a)(2)

  	
   

  	
  4.2

  
	
  (a)(3)

  	
   

  	
  4.2

  
	
  (a)(4)

  	
   

  	
  4.2,
  10.5

  
	
  (b)

  	
   

  	
  Not
  Applicable

  
	
  (c)

  	
   

  	
  Not
  Applicable

  
	
  (d)

  	
   

  	
  Not
  Applicable

  
	
  (e)

  	
   

  	
  10.5

  
	
  (f)

  	
   

  	
  Not
  Applicable

  

 

Note:  This reconciliation and tie shall not, for
any purpose, be deemed to be part of the Indenture.

 

 

Indenture
dated as of                         ,
20          between STR Holdings, Inc., a Delaware
corporation (“Company”), and U.S. Bank National Association (“Trustee”).

 

Each
party agrees as follows for the benefit of the other party and for the equal
and ratable benefit of the Holders of the Securities issued under this
Indenture.

 

ARTICLE I.

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1.                                             Definitions.

 

“Additional
Amounts” means any additional amounts which are required hereby or by any
Security, under circumstances specified herein or therein, to be paid by the
Company in respect of certain taxes imposed on Holders specified therein and
which are owing to such Holders.

 

“Affiliate”
of any specified person means any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified person.  For the purposes
of this definition, “control” (including, with correlative meanings, the terms “controlled
by” and “under common control with”), 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 or by agreement or otherwise.

 

“Agent”
means any Registrar, Paying Agent, Service Agent or authenticating agent.

 

“Board
of Directors” means the Board of Directors of the Company or any duly
authorized committee thereof.

 

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

 

“Business
Day” means with respect to any Place of Payment (or unless otherwise
provided by Board Resolution, Officers’ Certificate or supplemental indenture
hereto for a particular Series), any day except a Saturday, Sunday or any day
banking institutions or trust companies in the Place of Payment or the place in
which Corporate Trust Office is located are authorized or required by law,
regulation or executive order to close.

 

“Company”
means the party named as such above until a successor replaces it pursuant to
the applicable provisions hereof and thereafter means the successor.

 

 

“Company
Order” means a written order signed in the name of the Company by two
Officers, one of whom must be the Company’s chief executive officer, chief
financial officer, principal accounting officer or any Vice President.

 

“Company
Request” means a written request signed in the name of the Company by its
Chairman of the Board, a President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

 

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

 

“debt”
of any person as of any date means, without duplication, all indebtedness of
such person in respect of borrowed money, including all interest, fees and
expenses owed in respect thereto (whether or not the recourse of the lender is
to the whole of the assets of such person or only to a portion thereof), or
evidenced by bonds, notes, debentures or similar instruments.

 

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

 

“Depositary”
means, with respect to the Securities of any Series issuable or issued in
whole or in part in the form of one or more Global Securities, the person
designated as Depositary for such Series by the Company, which Depositary
shall be a clearing agency registered under the Exchange Act; and if at any
time there is more than one such person, “Depositary” as used with respect to
the Securities of any Series shall mean the Depositary with respect to the
Securities of such Series.

 

“Discount
Security” means any Security that provides for an amount less than the
stated principal amount thereof to be due and payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.2.

 

“Dollars”
means the currency of The United States of America.

 

“ECU”
means the European Currency Unit as determined by the Commission of the
European Union.

 

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

 

“Foreign
Currency” means any currency or currency unit issued by a government other
than the government of The United States of America.

 

“Foreign
Government Obligations” means with respect to Securities of any Series that
are denominated in a Foreign Currency, (i) direct obligations of the
government that issued or caused to be issued such currency for the payment of
which obligations its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by or acting as an agency or
instrumentality of such government the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by 

 

2

 

such
government, which, in either case under clauses (i) or (ii), are not
callable or redeemable at the option of the issuer thereof.

 

“Global
Security” or “Global Securities” means a Security or Securities, as
the case may be, in the form established pursuant to Section 2.2
evidencing all or part of a Series of Securities, issued to the Depositary
for such Series or its nominee, and registered in the name of such
Depositary or nominee.

 

“Holder”
or “Securityholder” means a person in whose name a Security is
registered.

 

“Indenture”
means this Indenture as amended from time to time in accordance with its terms
and shall include the form and terms of particular Series of Securities
established as contemplated hereunder.

 

“interest”
with respect to any Discount Security which by its terms bears interest only
after Maturity, means interest payable after Maturity.

 

“Maturity,”
when used with respect to any Security or installment of principal thereof,
means the date on which the principal of such Security or such installment of
principal becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption, notice
of option to elect repayment or otherwise.

 

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

 

“Officers’
Certificate” means a certificate signed by two Officers, one of whom must
be the Company’s principal executive officer, principal financial officer or
principal accounting officer.

 

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

 

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

 

“Place
of Payment” when used with respect to the Securities of any series, means
the place or places where the principal of and any premium or interest on the
Securities of that series are payable specified as required by Section 2.2.6.

 

“principal”
of a Security means the principal of the Security plus, when appropriate, the
premium, if any, on, and any Additional Amounts in respect of, the Security.

 

3

 

“Responsible
Officer” means any officer of the Trustee in its Corporate Trust Office and
also means, with respect to a particular corporate trust matter, any other
officer to whom any corporate trust matter is referred because of such person’s
knowledge of and familiarity with a particular subject.

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities”
means the debentures, notes or other debt instruments of the Company of any Series authenticated
and delivered under this Indenture.

 

“Series”
or “Series of Securities” means each series of debentures, notes or
other debt instruments of the Company created pursuant to Sections 2.1 and 2.2
hereof.

 

“Significant
Subsidiary” means any direct or indirect Subsidiary of the Company that
would be a “significant subsidiary” as defined in Article 1, Rule 1-02
of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as
amended, as such regulation is in effect on the date hereof.

 

“Stated
Maturity” when used with respect to any Security or any installment of
principal thereof or interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.

 

“Subsidiary”
of any specified person means any corporation of which at least a majority of
the outstanding stock having by the terms thereof ordinary voting power for the
election of directors of such corporation (irrespective of whether or not at
the time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned by such person, or by one or more other
Subsidiaries, or by such person and one or more other Subsidiaries.

 

“TIA”
means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as
in effect on the date of this Indenture; provided, however, that
in the event the Trust Indenture Act of 1939 is amended after such date, “TIA”
means, to the extent required by any such amendment, the Trust Indenture Act as
so amended.

 

“Trustee”
means the person named as the “Trustee” in the first paragraph of this
instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter “Trustee” shall mean or
include each person who is then a Trustee hereunder, and if at any time there
is more than one such person, “Trustee” as used with respect to the Securities
of any Series shall mean the Trustee with respect to Securities of that
Series.

 

“U.S.
Government Obligations” means securities which are (i) direct
obligations of The United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of The United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by The United States of 

 

4

 

America,
and which in the case of (i) and (ii) are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by
the custodian in respect of the U.S. Government Obligation evidenced by such
depository receipt.

 

Section 1.2.                                             Other
Definitions.

 

	
  Term

  	
   

  	
  Defined In Section

  
	
  “Bankruptcy
  Law”

  	
   

  	
  6.1

  
	
  “Custodian”

  	
   

  	
  6.1

  
	
  “Event
  of Default”

  	
   

  	
  6.1

  
	
  “Journal”

  	
   

  	
  10.15

  
	
  “Judgment
  Currency”

  	
   

  	
  10.16

  
	
  “Legal
  Holiday”

  	
   

  	
  10.7

  
	
  “mandatory
  sinking fund payment”

  	
   

  	
  11.1

  
	
  “Market
  Exchange Rate”

  	
   

  	
  10.15

  
	
  “New
  York Banking Day”

  	
   

  	
  10.16

  
	
  “optional
  sinking fund payment”

  	
   

  	
  11.1

  
	
  “Paying
  Agent”

  	
   

  	
  2.4

  
	
  “Registrar”

  	
   

  	
  2.4

  
	
  “Required
  Currency”

  	
   

  	
  10.16

  
	
  “Service
  Agent”

  	
   

  	
  2.4

  
	
  “successor
  person”

  	
   

  	
  5.1

  

 

Section 1.3.                                             Incorporation
by Reference of Trust Indenture Act.

 

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

 

“Commission”
means the SEC.

 

“indenture
securities” means the Securities.

 

“indenture
security holder” means a Securityholder.

 

“indenture
to be qualified” means this Indenture.

 

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

 

“obligor”
on the indenture securities means the Company and any successor obligor upon
the Securities.

 

5

 

All
other terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA and not
otherwise defined herein are used herein as so defined.

 

Section 1.4.                                             Rules of
Construction.

 

Unless
the context otherwise requires:

 

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

 

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

 

(c)                                  references to “generally
accepted accounting principles” shall mean generally accepted accounting
principles in effect as of the time when and for the period as to which such
accounting principles are to be applied;

 

(d)                                 “or” is not
exclusive;

 

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

 

(f)                                    provisions
apply to successive events and transactions;

 

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

 

(h)                                 “including:
means including without limitation; and

 

(i)                                     references
herein to Articles, Sections or other subdivisions are references to Articles,
Sections or such other subdivisions of this Indenture.

 

ARTICLE II.

THE SECURITIES

 

Section 2.1.                                             Issuable in
Series.

 

The
aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is unlimited. 
The Securities may be issued in one or more Series.  All Securities of a Series shall be
identical except as may be set forth in a Board Resolution, a supplemental
indenture or an Officers’ Certificate detailing the adoption of the terms
thereof pursuant to the authority granted under a Board Resolution.  In the case of Securities of a Series to
be issued from time to time, the Board Resolution, Officers’ Certificate or
supplemental indenture may provide for the method by which specified terms
(such as interest rate, maturity date, record date or date from which interest
shall accrue) are to be determined. 
Securities may differ between Series in 

 

6

 

respect
of any matters, provided that all Series of Securities shall be equally
and ratably entitled to the benefits of the Indenture.

 

Section 2.2.                                             Establishment
of Terms of Series of Securities.

 

At
or prior to the issuance of any Securities within a Series, the following shall
be established (as to the Series generally, in the case of Subsection
2.2.1 and either as to such Securities within the Series or as to the Series generally
in the case of Subsections 2.2.2 through 2.2.22) by a Board Resolution, a
supplemental indenture or an Officers’ Certificate pursuant to authority
granted under a Board Resolution:

 

2.2.1                                           the title of
the Series (which shall distinguish the Securities of that particular Series from
the Securities of any other Series);

 

2.2.2                                           the price or
prices (expressed as a percentage of the principal amount thereof) at which the
Securities of the Series will be issued;

 

2.2.3                                           any limit upon
the aggregate principal amount of the Securities of the Series which may
be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the Series pursuant to Section 2.7,
2.8, 2.11, 3.6 or 9.6);

 

2.2.4                                           the date or
dates on which the principal of the Securities of the Series is payable;

 

2.2.5                                           the rate or
rates (which may be fixed or variable) per annum or, if applicable, the method
used to determine such rate or rates (including, but not limited to, any
commodity, commodity index, stock exchange index or financial index) at which
the Securities of the Series shall bear interest, if any, the date or
dates from which such interest, if any, shall accrue, the date or dates on
which such interest, if any, shall commence and be payable and any regular
record date for the interest payable on any interest payment date;

 

2.2.6                                           the place or
places where the principal of and interest, if any, on the Securities of the Series shall
be payable, or the method of such payment, if by wire transfer, mail or other
means;

 

2.2.7                                           if applicable,
the period or periods within which, the price or prices at which and the terms
and conditions upon which the Securities of the Series may be redeemed, in
whole or in part, at the option of the Company;

 

2.2.8                                           the obligation,
if any, of the Company to redeem or purchase the Securities of the Series pursuant
to any sinking fund or analogous provisions or at the option of a Holder
thereof and the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the Series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;

 

7

 

2.2.9                                           the dates, if
any, on which and the price or prices at which the Securities of the Series will
be repurchased by the Company at the option of the Holders thereof and other
detailed terms and provisions of such repurchase obligations;

 

2.2.10                                     if other than
denominations of $1,000 and any integral multiple thereof, the denominations in
which the Securities of the Series shall be issuable;

 

2.2.11                                     the forms of
the Securities of the Series in fully registered form (and, if in fully
registered form, whether the Securities will be issuable as Global Securities);

 

2.2.12                                     if other than
the principal amount thereof, the portion of the principal amount of the
Securities of the Series that shall be payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.2;

 

2.2.13                                     the currency of
denomination of the Securities of the Series, which may be Dollars or any
Foreign Currency, including, but not limited to, the ECU, and if such currency
of denomination is a composite currency other than the ECU, the agency or
organization, if any, responsible for overseeing such composite currency;

 

2.2.14                                     the designation
of the currency, currencies or currency units in which payment of the principal
of and interest, if any, on the Securities of the Series will be made;

 

2.2.15                                     if payments of
principal of or interest, if any, on the Securities of the Series are to
be made in one or more currencies or currency units other than that or those in
which such Securities are denominated, the manner in which the exchange rate
with respect to such payments will be determined;

 

2.2.16                                     the manner in
which the amounts of payment of principal of or interest, if any, on the
Securities of the Series will be determined, if such amounts may be
determined by reference to an index based on a currency or currencies or by
reference to a commodity, commodity index, stock exchange index or financial
index;

 

2.2.17                                     the provisions,
if any, relating to any security provided for the Securities of the Series;

 

2.2.18                                     whether the
Securities of the series are subject to subordination and, if so, the terms of
such subordination;

 

2.2.19                                     whether the
Securities of the series will be guaranteed by any Person or Persons and, if
so, the identity of such Person or Persons, the terms and conditions upon which
such Securities shall be guaranteed and, if applicable, the terms and
conditions upon which such guarantees may be subordinated to other indebtedness
of the respective guarantors;

 

8

 

2.2.20            if the holders of Securities of the Series may
convert or exchange the Securities into or for securities of the Issuer or of
other entities or other property, the period or periods within which, the rate
or rates at which and the terms and conditions upon which Securities of the Series may
be converted or exchanged, in whole or in part;

 

2.2.21            any addition to or change in the
Events of Default which applies to any Securities of the Series and any
change in the right of the Trustee or the requisite Holders of such Securities
to declare the principal amount thereof due and payable pursuant to Section 6.2;

 

2.2.22            any addition to or change in the
covenants set forth in Articles IV or V which applies to Securities of the
Series;

 

2.2.23            if other than U.S. Bank National
Association is to act as Trustee for the Securities of the series, the name and
principal office of such Trustee;

 

2.2.24            any other terms of the Securities of
the Series (which terms shall not be inconsistent with the provisions of
this Indenture, except as permitted by Section 9.1, but which may modify
or delete any provision of this Indenture insofar as it applies to such
Series); and

 

2.2.25            any depositories, interest rate
calculation agents, exchange rate calculation agents or other agents with
respect to Securities of such Series if other than those appointed herein.

 

All
Securities of any one Series need not be issued at the same time and may
be issued from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to the Board Resolution, supplemental indenture or
Officers’ Certificate referred to above, and the authorized principal amount of
any Series may not be increased to provide for issuances of additional
Securities of such Series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers’ Certificate.

 

Section 2.3.               Execution and Authentication.

 

Two
Officers shall sign the Securities for the Company by manual or facsimile
signature.

 

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

 

A
Security shall not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent.  The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.

 

The
Trustee shall at any time, and from time to time, authenticate Securities for
original issue in the principal amount provided in the Board Resolution, 

 

9

 

supplemental
indenture hereto or Officers’ Certificate, upon receipt by the Trustee of a
Company Order.  Such Company Order may
authorize authentication and delivery pursuant to oral or electronic
instructions from the Company or its duly authorized agent or agents, which
oral instructions shall be promptly confirmed in writing.  Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers’ Certificate.

 

The
aggregate principal amount of Securities of any Series outstanding at any
time may not exceed any limit upon the maximum principal amount for such Series set
forth in the Board Resolution, supplemental indenture hereto or Officers’
Certificate delivered pursuant to Section 2.2, except as provided in Section 2.8.

 

Prior
to the issuance of Securities of any Series, the Trustee shall have received
and (subject to Section 7.2) shall be fully protected in relying on: (a) the
Board Resolution, supplemental indenture hereto or Officers’ Certificate
establishing the form of the Securities of that Series or of Securities
within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers’ Certificate complying
with Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.

 

The
Trustee shall have the right to decline to authenticate and deliver any
Securities of such Series: (a) if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of Responsible Officers shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.

 

The
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities.  An
authenticating agent may authenticate Securities whenever the Trustee may do
so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights
as an Agent to deal with the Company or an Affiliate.

 

Section 2.4.               Registrar and Paying Agent.

 

The
Company shall maintain, with respect to each Series of Securities, at the
place or places specified with respect to such Series pursuant to Section 2.2,
an office or agency where Securities of such Series may be presented or
surrendered for payment (“Paying Agent”), where Securities of such Series may
be surrendered for registration of transfer or exchange (“Registrar”)
and where notices and demands to or upon the Company in respect of the
Securities of such Series and this Indenture may be served (“Service
Agent”).  The Registrar shall keep a
register with respect to each Series of Securities and to their transfer
and exchange.  The Company will give
prompt written notice to the Trustee of the name and address, and any change in
the name or address, of each Registrar, Paying Agent or Service Agent.  If at any time the Company shall fail to
maintain any such required Registrar, Paying Agent or Service Agent or shall
fail to furnish the Trustee with the name and address thereof, such
presentations, surrenders, 

 

10

 

notices
and demands may be made or served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

 

The
Company may also from time to time designate one or more co-registrars,
additional paying agents or additional service agents and may from time to time
rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 for Securities of any Series for
such purposes.  The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the name or address of any such co-registrar, additional
paying agent or additional service agent. 
The term “Registrar” includes any co-registrar; the term “Paying Agent”
includes any additional paying agent; and the term “Service Agent” includes any
additional service agent.

 

The
Company hereby appoints the Trustee the initial Registrar, Paying Agent and
Service Agent for each Series unless another Registrar, Paying Agent or
Service Agent, as the case may be, is appointed prior to the time Securities of
that Series are first issued.

 

Section 2.5.               Paying Agent to Hold Money in
Trust.

 

The
Company shall require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money
held by the Paying Agent for the payment of principal of or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment.  While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee.  The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money.  If the Company
or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of Securityholders of any Series of Securities
all money held by it as Paying Agent.

 

Section 2.6.               Securityholder 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 Securityholders
of each Series of Securities and shall otherwise comply with TIA Section 312(a).  If the Trustee is not the Registrar, the
Company shall furnish to the Trustee at least ten 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 Securityholders of each Series of Securities.

 

11

 

Section 2.7.               Transfer and Exchange.

 

Where
Securities of a Series are presented to the Registrar or a co-registrar
with a request to register a transfer or to exchange them for an equal
principal amount of Securities of the same Series, the Registrar shall register
the transfer or make the exchange if its requirements for such transactions are
met.  To permit registrations of
transfers and exchanges, the Trustee shall authenticate Securities at the
Registrar’s request.  No service charge
shall be made for any registration of transfer or exchange (except as otherwise
expressly permitted herein), but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer tax or similar governmental
charge payable upon exchanges pursuant to Sections 2.11, 3.6 or 9.6).

 

Neither
the Company nor the Registrar shall be required (a) to issue, register the
transfer of, or exchange Securities of any Series for the period beginning
at the opening of business fifteen days immediately preceding the mailing of a
notice of redemption of Securities of that Series selected for redemption
and ending at the close of business on the day of such mailing, or (b) to
register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.

 

Section 2.8.               Mutilated, Destroyed, Lost and
Stolen Securities.

 

If
any mutilated Security is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same Series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

 

If
there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon its request the Trustee shall authenticate
and make available for delivery, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.

 

In
case any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security.

 

Upon
the issuance of any new Security under this Section, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.

 

12

 

Every
new Security of any Series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that Series duly issued hereunder.

 

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

 

Section 2.9.               Outstanding Securities.

 

The
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest on a Global Security effected by
the Trustee in accordance with the provisions hereof and those described in
this Section as not outstanding.

 

If
a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

 

If
the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any
thereof) holds on the Maturity of Securities of a Series money sufficient
to pay such Securities payable on that date, then on and after that date such
Securities of the Series cease to be outstanding and interest on them
ceases to accrue.

 

A
Security does not cease to be outstanding because the Company or an Affiliate
holds the Security.

 

In
determining whether the Holders of the requisite principal amount of
outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes
shall be the amount of the principal thereof that would be due and payable as
of the date of such determination upon a declaration of acceleration of the
Maturity thereof pursuant to Section 6.2.

 

Section 2.10.             Treasury Securities.

 

In
determining whether the Holders of the required principal amount of Securities
of a Series have concurred in any request, demand, authorization,
direction, notice, consent or waiver Securities of a Series owned by the
Company or an Affiliate shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
request, demand, authorization, direction, notice, consent or waiver only
Securities of a Series that a Responsible Officer of the Trustee knows are
so owned shall be so disregarded.

 

13

 

Section 2.11.             Temporary Securities.

 

Until
definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities upon a Company Order.  Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. 
Without unreasonable delay, the Company shall prepare and the Trustee
upon request shall authenticate definitive Securities of the same Series and
date of maturity in exchange for temporary Securities.  Until so exchanged, temporary Securities
shall have the same rights under this Indenture as the definitive Securities.

 

Section 2.12.             Cancellation.

 

The
Company at any time may deliver Securities to the Trustee for
cancellation.  The Registrar and the
Paying Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment.  The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment, replacement or cancellation and
shall destroy such canceled Securities (subject to the record retention
requirement of the Exchange Act) and deliver a certificate of such destruction
to the Company, unless the Company otherwise directs.  The Company may not issue new Securities to
replace Securities that it has paid or delivered to the Trustee for
cancellation.

 

Section 2.13.             Defaulted Interest.

 

If
the Company defaults in a payment of interest on a Series of Securities,
it shall pay the defaulted interest, plus, to the extent permitted by law, any
interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date.  The Company shall fix the record date and
payment date.  At least 30 days before
the record date, the Company shall mail to the Trustee and to each
Securityholder of the Series a notice that states the record date, the
payment date and the amount of interest to be paid.  The Company may pay defaulted interest in any
other lawful manner.

 

Section 2.14.             Global Securities.

 

2.14.1            Terms of Securities.  A Board Resolution, a supplemental indenture
hereto or an Officers’ Certificate shall establish whether the Securities of a Series shall
be issued in whole or in part in the form of one or more Global Securities and
the Depositary for such Global Security or Securities.

 

2.14.2            Transfer and Exchange.  Notwithstanding any provisions to the
contrary contained in Section 2.7 of the Indenture and in addition
thereto, any Global Security shall be exchangeable pursuant to Section 2.7
of the Indenture for Securities registered in the names of Holders other than
the Depositary for such Security or its nominee only if (i) such
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time such Depositary ceases to
be a clearing agency registered under the Exchange Act, and, in either case,
the 

 

14

 

Company fails to appoint a successor Depositary
within 90 days of such event, (ii) the Company executes and delivers to
the Trustee an Officers’ Certificate to the effect that such Global Security
shall be so exchangeable or (iii) an Event of Default with respect to the
Securities represented by such Global Security shall have happened and be
continuing.  Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
Securities registered in such names as the Depositary shall direct in writing
in an aggregate principal amount equal to the principal amount of the Global
Security with like tenor and terms.

 

Except
as provided in this Section 2.14.2, a Global Security may not be
transferred except as a whole by the Depositary with respect to such Global
Security to a nominee of such Depositary, by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such a successor
Depositary.

 

2.14.3            Legend.  Unless otherwise provided pursuant to Section 2.2,
any Global Security issued hereunder shall bear a legend in substantially the
following form:

 

“This
Security is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of the Depositary or a nominee of the
Depositary.  This Security is
exchangeable for Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the Indenture,
and may not be transferred except as a whole by the Depositary to a nominee of
the Depositary, by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such a successor Depositary.”

 

2.14.4            Acts of Holders.  The Depositary, as a Holder, may appoint
agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture.

 

2.14.5            Payments.  Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.2,
payment of the principal of, premium, if any, and interest, if any, on any
Global Security shall be made to the Holder thereof.

 

2.14.6            Consents, Declaration and
Directions.  Except as provided in Section 2.14.5,
the Company, the Trustee and any Agent shall treat a person as the Holder of
such principal amount of outstanding Securities of such Series represented
by a Global Security as shall be specified in a written statement of the
Depositary with respect to such Global Security, for purposes of obtaining any
consents, declarations, waivers or directions required to be given by the
Holders pursuant to this Indenture.

 

15

 

Section 2.15.             CUSIP Numbers.

 

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

 

ARTICLE III.

REDEMPTION

 

Section 3.1.               Notice to Trustee.

 

The
Company may, with respect to any Series of Securities, reserve the right
to redeem and pay the Series of Securities or may covenant to redeem and
pay the Series of Securities or any part thereof prior to the Stated
Maturity thereof at such time and on such terms as provided for in such
Securities.  If a Series of
Securities is redeemable and the Company wants or is obligated to redeem prior
to the Stated Maturity thereof all or part of the Series of Securities
pursuant to the terms of such Securities, it shall notify the Trustee of the
redemption date and the principal amount of Series of Securities to be
redeemed.  The Company shall give the
notice at least 45 days before the redemption date (or such shorter notice as
may be acceptable to the Trustee).

 

Section 3.2.               Selection of Securities to be
Redeemed.

 

Unless
otherwise indicated for a particular Series by a Board Resolution, a
supplemental indenture or an Officers’ Certificate, if less than all the Securities
of a Series are to be redeemed, the Trustee shall select the Securities of
the Series to be redeemed in any manner that the Trustee deems fair and
appropriate.  The Trustee shall make the
selection from Securities of the Series outstanding not previously called
for redemption.  The Trustee may select
for redemption portions of the principal of Securities of the Series that
have denominations larger than $1,000. 
Securities of the Series and portions of them it selects shall be
in amounts of $1,000 or whole multiples of $1,000 or, with respect to
Securities of any Series issuable in other denominations pursuant to Section 2.2.10,
the minimum principal denomination for each Series and integral multiples
thereof.  Provisions of this Indenture
that apply to Securities of a Series called for redemption also apply to
portions of Securities of that Series called for redemption.

 

Section 3.3.               Notice of Redemption.

 

Unless
otherwise indicated for a particular Series by a Board Resolution, a
supplemental indenture hereto or an Officers’ Certificate, at least 30 days but
not more than 60 days before a redemption date, the Company shall deliver a
notice of redemption by first-class mail or electronically to each Holder whose
Securities are to be redeemed.

 

16

 

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

 

(a)           the redemption date;

 

(b)           the redemption price;

 

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

 

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

 

(e)           that interest on Securities of the Series called for
redemption ceases to accrue on and after the redemption date; and

 

(f)            any other information as may be required by the terms of
the particular Series or the Securities of a Series being redeemed.

 

At
the Company’s request, the Trustee shall give the notice of redemption in the
Company’s name.

 

Section 3.4.               Effect of Notice of Redemption.

 

Once
notice of redemption is delivered as provided in Section 3.3, Securities
of a Series called for redemption become due and payable on the redemption
date and at the redemption price.  A
notice of redemption may not be conditional. 
Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price plus accrued interest to the redemption date.

 

Section 3.5.               Deposit of Redemption Price.

 

On
or before the redemption date, the Company shall deposit with the Paying Agent
money sufficient to pay the redemption price of and accrued interest, if any,
on all Securities to be redeemed on that date.

 

Section 3.6.               Securities Redeemed in Part.

 

Upon
surrender of a Security that is redeemed in part, the Trustee shall
authenticate for the Holder a new Security of the same Series and the same
Maturity equal in principal amount to the unredeemed portion of the Security
surrendered.

 

ARTICLE IV.

COVENANTS

 

Section 4.1.               Payment of Principal and
Interest.

 

The
Company covenants and agrees for the benefit of the Holders of each Series of
Securities that it will duly and punctually pay the principal of and interest,
if 

 

17

 

any,
on the Securities of that Series in accordance with the terms of such
Securities and this Indenture.

 

Section 4.2.               SEC Reports.

 

The
Company shall deliver to the Trustee within 15 days after it files them with
the SEC copies of the annual reports and of the information, documents, and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act.  The Company also shall comply with
the other provisions of TIA Section 314(a).

 

Section 4.3.               Compliance Certificate.

 

The
Company shall deliver to the Trustee, within 90 days after the end of each
fiscal year of the Company, an Officers’ Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his knowledge the Company has
kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions hereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he may have knowledge).

 

The
Company will, so long as any of the Securities are outstanding, deliver to the
Trustee, forthwith upon becoming aware of any Default or Event of Default, an
Officers’ Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.

 

Section 4.4.               Stay, Extension and Usury Laws.

 

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

 

Section 4.5.               Corporate Existence.

 

Subject
to Article V, the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each Significant Subsidiary in
accordance 

 

18

 

with
the respective organizational documents of each Significant Subsidiary and the
rights (charter and statutory), licenses and franchises of the Company and its
Significant Subsidiaries; provided, however, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any Significant Subsidiary, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries
taken as a whole and that the loss thereof is not adverse in any material
respect to the Holders.

 

Section 4.6.               Taxes.

 

The
Company shall, and shall cause each of its Significant Subsidiaries to, pay
prior to delinquency all taxes, assessments and governmental levies, except as
contested in good faith and by appropriate proceedings.

 

ARTICLE V.

SUCCESSORS

 

Section 5.1.               When Company May Merge, Etc.

 

The
Company shall not consolidate with or merge into, or sell, convey, transfer or
lease all or substantially all of its properties and assets to, any person (a “successor
person”), and may not permit any person to merge into, or convey, transfer
or lease its properties and assets substantially as an entirety to, the
Company, unless:

 

(a)           the successor person (if any) is a corporation,
partnership, trust or other entity organized and validly existing under the
laws of any U.S. domestic jurisdiction and expressly assumes the Company’s
obligations on the Securities and under this Indenture and

 

(b)           immediately after giving effect to the transaction, no
Default or Event of Default, shall have occurred and be continuing.

 

The
Company shall deliver to the Trustee prior to the consummation of the proposed
transaction an Officers’ Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transaction and such supplemental indenture
comply with this Indenture.

 

Section 5.2.               Successor Corporation
Substituted.

 

Upon
any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the successor corporation, partnership, trust
or other entity organized and validly existing under the laws of any U.S.
domestic jurisdiction formed by such consolidation or into or with which the
Company is merged or to which such sale, lease, conveyance or other disposition
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor person has been named as the Company herein; provided, however,

 

19

 

that
the predecessor Company in the case of a sale, lease, conveyance or other
disposition shall not be released from the obligation to pay the principal of
and interest, if any, on the Securities.

 

ARTICLE VI.

DEFAULTS AND REMEDIES

 

Section 6.1.               Events of Default.

 

“Event
of Default,” wherever used herein with respect to Securities of any Series,
means any one of the following events, unless in the establishing Board
Resolution, supplemental indenture or Officers’ Certificate, it is provided
that such Series shall not have the benefit of said Event of Default:

 

(a)           default in the payment of any interest on any Security of
that Series when it becomes due and payable, and continuance of such
default for a period of 30 days (unless the entire amount of such payment is
deposited by the Company with the Trustee or with a Paying Agent prior to the
expiration of such period of 30 days); or

 

(b)           default in the payment of the principal of any Security of
that Series at its Maturity; or

 

(c)           default in the deposit of any sinking fund payment, when
and as due in respect of any Security of that Series; or

 

(d)           default in the performance or breach of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty
that has been included in this Indenture solely for the benefit of Series of
Securities other than that Series), which default continues uncured for a
period of 60 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in principal amount of the outstanding Securities of that Series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default”
hereunder; or

 

(e)           the Company pursuant to or within the meaning of any
Bankruptcy Law:

 

(i)            commences a voluntary case,

 

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

 

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

 

20

 

 

 

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

 

(v)                                 generally is
unable to pay its debts as the same become due; or

 

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

 

(i)                                     is for relief
against the Company in an involuntary case,

 

(ii)                                  appoints a
Custodian of the Company or for all or substantially all of its property, or

 

(iii)                               orders the
liquidation of the Company,

 

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

 

(g)                                  any other Event
of Default provided with respect to Securities of that Series, which is
specified in a Board Resolution, a supplemental indenture hereto or an Officers’
Certificate, in accordance with Section 2.2.19.

 

The
term “Bankruptcy Law” means title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. 
The term “Custodian” means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.

 

Section 6.2.                                           Acceleration of
Maturity; Rescission and Annulment.

 

If
an Event of Default with respect to Securities of any Series at the time
outstanding occurs and is continuing (other than an Event of Default referred
to in Section 6.1(e) or (f)) then in every such case the Trustee or
the Holders of not less than 25% in principal amount of the outstanding
Securities of that Series may declare the principal amount (or, if any
Securities of that Series are Discount Securities, such portion of the
principal amount as may be specified in the terms of such Securities) of and
accrued and unpaid interest, if any, on all of the Securities of that Series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) and accrued and unpaid interest, if any, shall
become immediately due and payable.  If
an Event of Default specified in Section 6.1(e) or (f) shall
occur, the principal amount (or specified amount) of and accrued and unpaid
interest, if any, on all outstanding Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.

 

At
any time after such a declaration of acceleration with respect to any Series has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in principal amount of the outstanding Securities of that
Series, by written notice 

 

21

 

to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if:

 

(a)                                 the Company has
paid or deposited with the Trustee a sum sufficient to pay

 

(i)                                     all overdue interest,
if any, on all Securities of that Series,

 

(ii)                                  the principal
of any Securities of that Series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in such Securities,

 

(iii)                               to the extent
that payment of such interest is lawful, interest upon any overdue principal
and overdue interest at the rate or rates prescribed therefor in such
Securities, and

 

(iv)                              all sums paid
or advanced by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel;

 

and

 

(b)                                 all Events of
Default with respect to Securities of that Series, other than the non-payment
of the principal of Securities of that Series which have become due solely
by such declaration of acceleration, have been cured or waived as provided in Section 6.13.

 

No
such rescission shall affect any subsequent Default or impair any right
consequent thereon.

 

Section 6.3.                                           Collection of
Indebtedness and Suits for Enforcement by Trustee.

 

The
Company covenants that if

 

(a)                                 default is made
in the payment of any interest on any Security when such interest becomes due
and payable and such default continues for a period of 30 days, or

 

(b)                                 default is made
in the payment of principal of any Security at the Maturity thereof, or

 

(c)                                  default is made
in the deposit of any sinking fund payment when and as due by the terms of a
Security,

 

then, the Company
will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities for
principal and interest and, to the extent that payment of such interest shall
be legally enforceable, interest on any overdue principal or any overdue
interest, at the rate or rates 

 

22

 

prescribed
therefor in such Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.

 

If
the Company fails to pay such amounts forthwith upon such demand, the Trustee,
in its own name and as trustee of an express trust, may institute a judicial
proceeding for the collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same against the
Company or any other obligor upon such Securities and collect the moneys
adjudged or deemed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.

 

If
an Event of Default with respect to any Securities of any Series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such Series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.

 

Section 6.4.                                           Trustee May File
Proofs of Claim.

 

In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,

 

(a)                                 to file and
prove a claim for the whole amount of principal and interest owing and unpaid
in respect of the Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and

 

(b)                                 to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same, and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and 

 

23

 

advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 7.7.

 

Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

 

Section 6.5.                                           Trustee May Enforce
Claims Without Possession of Securities.

 

All
rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.

 

Section 6.6.                                           Application of
Money Collected.

 

Any
money collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

 

First:  To the payment of all amounts due the Trustee
under Section 7.7; and

 

Second:  To the payment of the amounts then due and
unpaid for principal of and interest on the Securities in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and interest, respectively; and

 

Third:  To the Company.

 

Section 6.7.                                           Limitation on
Suits.

 

No
Holder of any Security of any Series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless

 

(a)                                 such Holder has
previously given written notice to the Trustee of a continuing Event of Default
with respect to the Securities of that Series;

 

24

 

(b)                                 the Holders of
not less than 25% in principal amount of the outstanding Securities of that Series shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;

 

(c)                                  such Holder or
Holders have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;

 

(d)                                 the Trustee for
60 days after its receipt of such notice, request and offer of indemnity has
failed to institute any such proceeding; and

 

(e)                                  no direction
inconsistent with such written request has been given to the Trustee during
such 60-day period by the Holders of a majority in principal amount of the
outstanding Securities of that Series;

 

it
being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.

 

Section 6.8.                                           Unconditional
Right of Holders to Receive Principal and Interest.

 

Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the
principal of and interest, if any, on such Security on the Stated Maturity or
Stated Maturities expressed in such Security (or, in the case of redemption, on
the redemption date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.

 

Section 6.9.                                           Restoration of
Rights and Remedies.

 

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

 

Section 6.10.                                    Rights and
Remedies Cumulative.

 

Except
as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in Section 2.8, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by 

 

25

 

law,
be cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

 

Section 6.11.                                    Delay or
Omission Not Waiver.

 

No
delay or omission of the Trustee or of any Holder of any Securities to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein.  Every right and remedy
given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.

 

Section 6.12.                                    Control by
Holders.

 

The
Holders of a majority in principal amount of the outstanding Securities of any Series shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Securities of such Series,
provided that

 

(a)                                 such direction
shall not be in conflict with any rule of law or with this Indenture,

 

(b)                                 the Trustee may
take any other action deemed proper by the Trustee which is not inconsistent
with such direction, and

 

(c)                                  subject to the
provisions of Section 6.1, the Trustee shall have the right to decline to
follow any such direction if the Trustee in good faith shall, by a Responsible
Officer of the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability.

 

Section 6.13.                                    Waiver of Past
Defaults.

 

Subject
to Section 6.2, the Holders of not less than a majority in principal
amount of the outstanding Securities of any Series may on behalf of the
Holders of all the Securities of such Series waive any past Default
hereunder with respect to such Series and its consequences, except a
Default in the payment of the principal of or interest on any Security of such Series (provided,
however, that the Holders of a majority in principal amount of the
outstanding Securities of any Series may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration).  Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

 

26

 

Section 6.14.                                    Undertaking for
Costs.

 

All
parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, 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,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the outstanding Securities of any Series, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
or interest on any Security on or after the Stated Maturity or Stated
Maturities expressed in such Security (or, in the case of redemption, on the redemption
date).

 

ARTICLE VII.

TRUSTEE

 

Section 7.1.                                           Duties of
Trustee.

 

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

 

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

 

(i)                                     The Trustee
need perform only those duties that are specifically set forth in this
Indenture and no others.

 

(ii)                                  In the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
Officers’ Certificates or Opinions of Counsel furnished to the Trustee and
conforming to the requirements of this Indenture; however, in the case
of any such Officers’ Certificates or Opinions of Counsel which by any
provisions hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such Officers’ Certificates and Opinions of Counsel to
determine whether or not they conform to the requirements of this Indenture.

 

(c)                                  No provision of
this Indenture shall be construed to relieve the Trustee from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:

 

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

 

27

 

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

 

(iii)                               The Trustee
shall not be liable with respect to any action taken, suffered or omitted to be
taken by it with respect to Securities of any Series in good faith in
accordance with the direction of the Holders of a majority in principal amount
of the outstanding Securities of such Series relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such Series.

 

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

 

(e)                                  The Trustee may
refuse to perform any duty or exercise any right or power unless it receives
indemnity satisfactory to it against any loss, liability or expense.

 

(f)                                   The Trustee
shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company. 
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 risk its own funds or otherwise
incur any financial liability in the performance of any of its duties, or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk is not reasonably assured to it.

 

(h)                                 The Paying
Agent, the Registrar and any authenticating agent shall be entitled to the
protections and immunities as are set forth in paragraphs (a), (b) and (c) of
this Section with respect to the Trustee.

 

Section 7.2.                                           Rights of
Trustee.

 

(a)                                 The Trustee may
rely on and shall be protected in acting or refraining from acting upon any
document believed by it to be genuine and to have been signed or presented by
the proper person.  The Trustee need not
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 such Officers’ Certificate or Opinion of Counsel.

 

28

 

(c)                                  The Trustee may
act through agents and shall not be responsible for the misconduct or negligence
of any agent appointed with due care.  No
Depositary shall be deemed an agent of the Trustee and the Trustee shall not be
responsible for any act or omission by any Depositary.

 

(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.

 

(e)                                  The Trustee may
consult with counsel and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

 

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

 

Section 7.3.                                           Individual
Rights of Trustee.

 

The
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Company or an Affiliate with the
same rights it would have if it were not Trustee.  Any Agent may do the same with like
rights.  The Trustee is also subject to
Sections 7.10 and 7.11.

 

Section 7.4.                                           Trustee’s
Disclaimer.

 

The
Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company’s use
of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its authentication.

 

Section 7.5.                                           Notice of
Defaults.

 

If
a Default or Event of Default occurs and is continuing with respect to the
Securities of any Series and if it is known to a Responsible Officer of
the Trustee, the Trustee shall mail (first-class, postage prepaid) or
electronically deliver to each Securityholder of the Securities of that Series the
notice of a Default or Event of Default within 90 days after it occurs or, if
later, after a Responsible Officer of the Trustee has knowledge of such Default
or Event of Default.  Except in the case
of a Default or Event of Default in payment of principal of or interest on any
Security of any Series, the Trustee may withhold the notice if and so long as
its corporate trust committee or a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Securityholders of that Series.

 

29

 

Section 7.6.                                           Reports by
Trustee to Holders.

 

Within
60 days after May 15 in each year, the Trustee shall transmit by mail or
electronically to all Securityholders a brief report dated as of such May 15,
in accordance with, and to the extent required under, TIA Section 313.

 

A
copy of each report at the time of its mailing to Securityholders of any Series shall
be filed with the SEC and each stock exchange on which the Securities of that Series are
listed.  The Company shall promptly
notify the Trustee when Securities of any Series are listed on any stock
exchange.

 

Section 7.7.                                           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 by it.  Such expenses shall include the reasonable
compensation and expenses of the Trustee’s agents and counsel.

 

The
Company shall indemnify the Trustee (including the cost of defending itself)
against any loss, liability or expense incurred by it except as set forth in
the next paragraph in the performance of its duties under this Indenture as
Trustee or Agent.  The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.  The Company shall defend the claim and the
Trustee shall cooperate in the defense. 
The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. 
The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.  This indemnification shall apply to officers,
directors, employees, shareholders and agents of the Trustee.

 

The
Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee or by any officer, director, employee,
shareholder or agent of the Trustee through negligence, bad faith or willful
misconduct.

 

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

 

When
the Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

 

30

 

Section 7.8.               Replacement of Trustee.

 

A
resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section.

 

The
Trustee may resign with respect to the Securities of one or more Series by
so notifying the Company.  The Holders of
a majority in principal amount of the Securities of any Series may remove
the Trustee with respect to that Series by so notifying the Trustee and
the Company.  The Company may remove the
Trustee with respect to Securities of one or more Series if:

 

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

 

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

 

(c)           a Custodian or public
officer takes charge of the Trustee or its property; or

 

(d)           the Trustee becomes
incapable of acting.

 

If
the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor
Trustee.  Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount
of the then outstanding Securities may appoint a successor Trustee to replace
the successor Trustee appointed by the Company.

 

If
a successor Trustee with respect to the Securities of any one or more Series does
not take office within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of at least 10% in
principal amount of the Securities of the applicable Series may petition
any court of competent jurisdiction for the appointment of a successor Trustee.

 

If
the Trustee with respect to the Securities of any one or more Series fails
to comply with Section 7.10, any Securityholder of the applicable Series may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

 

A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. 
Immediately after that, the retiring Trustee shall transfer all property
held by it as Trustee to the successor Trustee subject to the lien provided for
in Section 7.7, 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 with respect to each Series of Securities for
which it is acting as Trustee under this Indenture.  A successor Trustee shall deliver by mail or
electronically a notice of its succession to each Securityholder of each such
Series.  Notwithstanding replacement of
the Trustee pursuant to this Section 7.8, the Company’s obligations under 

 

31

 

Section 7.7
hereof shall continue for the benefit of the retiring trustee with respect to
expenses and liabilities incurred by it prior to such replacement.

 

Section 7.9.               Successor Trustee by Merger, Etc.

 

If
the Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.

 

Section 7.10.             Eligibility;
Disqualification.

 

This
Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1),
(2) and (5).  The Trustee shall
always have a combined capital and surplus of at least $25,000,000 as set forth
in its most recent published annual report of condition.  The Trustee shall comply with TIA Section 310(b).

 

Section 7.11.             Preferential Collection of
Claims Against Company.

 

The
Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). 
A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to
the extent indicated.

 

ARTICLE VIII.

SATISFACTION AND DISCHARGE; DEFEASANCE

 

Section 8.1.               Satisfaction and Discharge
of Indenture.

 

This
Indenture shall upon Company Order cease to be of further effect (except as
hereinafter provided in this Section 8.1), and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

 

(a)           either

 

(i)            all Securities theretofore
authenticated and delivered (other than Securities that have been destroyed,
lost or stolen and that have been replaced or paid) have been delivered to the
Trustee for cancellation; or

 

(ii)           all such Securities not
theretofore delivered to the Trustee for cancellation

 

(1)           have become due and payable,
or

 

(2)           will become due and payable
at their Stated Maturity within one year, or

 

(3)           are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of 

 

32

 

notice of redemption by the
Trustee in the name, and at the expense, of the Company, or

 

(4)           are deemed paid and
discharged pursuant to Section 8.3, as applicable;

 

and
the Company, in the case of (1), (2) or (3) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust an amount
sufficient for the purpose of paying and discharging the entire indebtedness on
such Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which have become due and payable on or prior to the date of such deposit) or
to the Stated Maturity or redemption date, as the case may be;

 

(b)           the Company has paid or
caused to be paid all other sums payable hereunder by the Company; and

 

(c)           the Company has delivered to
the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.

 

Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 7.7, and, if money shall have been
deposited with the Trustee pursuant to clause (a) of this Section, the
provisions of Sections 2.4, 2.7, 2.8, 8.1, 8.2 and 8.5 shall survive.

 

Section 8.2.               Application of Trust Funds;
Indemnification.

 

(a)           Subject to the provisions of
Section 8.5, all money deposited with the Trustee pursuant to Section 8.1,
all money and U.S. Government Obligations or Foreign Government Obligations
deposited with the Trustee pursuant to Section 8.3 or 8.4 and all money
received by the Trustee in respect of U.S. Government Obligations or Foreign
Government Obligations deposited with the Trustee pursuant to Section 8.3
or 8.4, shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the persons entitled thereto, of
the principal and interest for whose payment such money has been deposited with
or received by the Trustee or to make mandatory sinking fund payments or analogous
payments as contemplated by Sections 8.3 or 8.4.

 

(b)           The Company shall pay and
shall indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against U.S. Government Obligations or Foreign Government Obligations
deposited pursuant to Sections 8.3 or 8.4 or the interest and principal
received in respect of such obligations other than any payable by or on behalf
of Holders.

 

(c)           The Trustee shall deliver or
pay to the Company from time to time upon Company Request any U.S. Government
Obligations or Foreign Government 

 

33

 

Obligations or money held by it as provided in
Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written certification
thereof delivered to the Trustee, are then in excess of the amount thereof
which then would have been required to be deposited for the purpose for which
such U.S. Government Obligations or Foreign Government Obligations or money
were deposited or received.  This
provision shall not authorize the sale by the Trustee of any U.S. Government
Obligations or Foreign Government Obligations held under this Indenture.

 

Section 8.3.               Legal Defeasance of
Securities of any Series.

 

Unless
this Section 8.3 is otherwise specified, pursuant to Section 2.2.21,
to be inapplicable to Securities of any Series, the Company shall be deemed to
have paid and discharged the entire indebtedness on all the outstanding
Securities of such Series on the 91st day after the date of the deposit
referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of such Series, shall
no longer be in effect (and the Trustee, at the expense of the Company, shall,
at Company Request, execute proper instruments acknowledging the same), except
as to:

 

(a)           the rights of Holders of
Securities of such Series to receive, from the trust funds described in
subparagraph (d) hereof, (i) payment of the principal of and each
installment of principal of and interest on the outstanding Securities of such Series on
the Stated Maturity of such principal or installment of principal or interest
and (ii) the benefit of any mandatory sinking fund payments applicable to
the Securities of such Series on the day on which such payments are due
and payable in accordance with the terms of this Indenture and the Securities
of such Series;

 

(b)           the provisions of Sections
2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and

 

(c)           the rights, powers, trust
and immunities of the Trustee hereunder;

 

provided that, the
following conditions shall have been satisfied:

 

(d)           the Company shall have
deposited or caused to be deposited irrevocably with the Trustee as trust funds
in trust for the purpose of making the following payments, specifically pledged
as security for and dedicated solely to the benefit of the Holders of such
Securities (i) in the case of Securities of such Series denominated
in Dollars, cash in Dollars (or such other money or currencies as shall then be
legal tender in the United States) and/or U.S. Government Obligations, or (ii) in
the case of Securities of such Series denominated in a Foreign Currency
(other than a composite currency), money and/or Foreign Government Obligations,
which through the payment of interest and principal in respect thereof, in
accordance with their terms, will provide (and without reinvestment and
assuming no tax liability will be imposed on such Trustee), not later than one
day before the due date of any payment of money, an amount in cash, sufficient,
in the opinion of a nationally recognized firm of independent 

 

34

 

public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and discharge
each installment of principal (including mandatory sinking fund or analogous
payments) of and interest, if any, on all the Securities of such Series on
the dates such installments of interest or principal are due;

 

(e)           such deposit will not result
in a breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by which
it is bound;

 

(f)            no Default or Event of
Default with respect to the Securities of such Series shall have occurred
and be continuing on the date of such deposit or during the period ending on
the 91st day after such date;

 

(g)           the Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel to
the effect that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the
date of execution of this Indenture, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the Securities of
such Series will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to Federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit, defeasance and
discharge had not occurred;

 

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

 

(i)            such deposit shall not
result in the trust arising from such deposit constituting an investment
company (as defined in the Investment Company Act of 1940, as amended), or such
trust shall be qualified under such Act or exempt from regulation thereunder;
and

 

(j)            the Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided for relating to the
defeasance contemplated by this Section have been complied with.

 

Section 8.4.               Covenant Defeasance.

 

Unless
this Section 8.4 is otherwise specified pursuant to Section 2.2.21 to
be inapplicable to Securities of any Series, on and after the 91st day after
the date of the deposit referred to in subparagraph (a) hereof, the Company
may omit to comply with any term, provision or condition set forth under
Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as any additional covenants
contained in a supplemental indenture hereto for a 

 

35

 

particular
Series of Securities or a Board Resolution or an Officers’ Certificate
delivered pursuant to Section 2.2.21 (and the failure to comply with any
such covenants shall not constitute a Default or Event of Default under Section 6.1)
and the occurrence of any event described in clause (e) of Section 6.1
shall not constitute a Default or Event of Default hereunder, with respect to
the Securities of such Series, provided that the following conditions shall
have been satisfied:

 

(a)           With reference to this Section 8.4,
the Company has deposited or caused to be irrevocably deposited (except as
provided in Section 8.2(c)) with the Trustee as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Securities (i) in the case of Securities of such Series denominated
in Dollars, cash in Dollars (or such other money or currencies as shall then be
legal tender in the United States) and/or U.S. Government Obligations, or (ii) in
the case of Securities of such Series denominated in a Foreign Currency
(other than a composite currency), money and/or Foreign Government Obligations,
which through the payment of interest and principal in respect thereof, in
accordance with their terms, will provide (and without reinvestment and
assuming no tax liability will be imposed on such Trustee), not later than one
day before the due date of any payment of money, an amount in cash, sufficient,
in the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay principal and interest, if any, on and any mandatory sinking
fund in respect of the Securities of such Series on the dates such
installments of interest or principal are due;

 

(b)           Such deposit will not result
in a breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by which
it is bound;

 

(c)           No Default or Event of
Default with respect to the Securities of such Series shall have occurred
and be continuing on the date of such deposit or during the period ending on
the 91st day after such date;

 

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

 

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

 

36

 

(f)            The Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided for relating to the
defeasance contemplated by this Section have been complied with.

 

Section 8.5.               Repayment to Company.

 

The
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal and interest that remains unclaimed
for two years.  After that,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person.

 

Section 8.6.               Reinstatement.

 

If
the Trustee or Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with Sections 8.1, 8.3 or 8.4, as the case may be, by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.1, 8.3 or 8.4, as the case may be, until such time
as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 8.1, 8.3 or 8.4, as the
case may be; provided, however, that if the Company makes any payment of
principal of, premium, if any, or interest on any Securities because of
reinstatement of its obligations, the Company shall be subrogated to the rights
of the holders of such Securities to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent.

 

ARTICLE IX.

AMENDMENTS AND WAIVERS

 

Section 9.1.               Without Consent of Holders.

 

The
Company and the Trustee may amend or supplement this Indenture or the
Securities of one or more Series without the consent of any
Securityholder:

 

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

 

(b)           to comply with Article V;

 

(c)           to provide for uncertificated
Securities in addition to or in place of certificated Securities;

 

(d)           to make any change that does
not adversely affect the rights of any Securityholder;

 

37

 

(e)           to provide for the issuance
of and establish the form and terms and conditions of Securities of any Series as
permitted by this Indenture;

 

(f)            to evidence and provide for
the acceptance of appointment hereunder by a successor Trustee with respect to
the Securities of one or more Series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee;

 

(g)           to comply with requirements
of the SEC in order to effect or maintain the qualification of this Indenture
under the TIA; or

 

(h)           to comply with any
applicable prospectus or prospectus supplement.

 

Section 9.2.               With Consent of Holders.

 

The
Company and the Trustee may enter into a supplemental indenture with the
written consent of the Holders of at least a majority in principal amount of
the outstanding Securities of each Series affected by such supplemental
indenture (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series), for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the Securityholders of each such Series.  Except as provided in Section 6.13, the
Holders of at least a majority in principal amount of the outstanding
Securities of each Series affected by such waiver by notice to the Trustee
(including consents obtained in connection with a tender offer or exchange
offer for the Securities of such Series) may waive compliance by the Company
with any provision of this Indenture or the Securities with respect to such
Series.

 

It
shall not be necessary for the consent of the Holders of Securities under this Section 9.2
to approve the particular form of any proposed supplemental indenture or
waiver, but it shall be sufficient if such consent approves the substance
thereof.  After a supplemental indenture
or waiver under this Section becomes effective, the Company shall deliver
by mail or electronically to the Holders of Securities affected thereby a
notice briefly describing the supplemental indenture or waiver.  Any failure by the Company to deliver such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture or waiver.

 

Section 9.3.               Limitations.

 

Without
the consent of each Securityholder affected, an amendment or waiver may not:

 

(a)           change the amount of
Securities whose Holders must consent to an amendment, supplement or waiver;

 

38

 

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

 

(c)           reduce the principal or
change the Stated Maturity of any Security or reduce the amount of, or postpone
the date fixed for, the payment of any sinking fund or analogous obligation;

 

(d)           reduce the principal amount
of Discount Securities payable upon acceleration of the maturity thereof;

 

(e)           waive a Default or Event of
Default in the payment of the principal of or interest, if any, on any Security
(except a rescission of acceleration of the Securities of any Series by
the Holders of at least a majority in principal amount of the outstanding
Securities of such Series and a waiver of the payment default that
resulted from such acceleration);

 

(f)            make the principal of or
interest, if any, on any Security payable in any currency other than that
stated in the Security;

 

(g)           make any change in Sections
6.8, 6.13, 9.3 (this sentence), 10.15 or 10.16; or

 

(h)           waive a redemption payment
with respect to any Security or change any of the provisions with respect to
the redemption of any Securities.

 

Section 9.4.               Compliance with Trust
Indenture Act.

 

Every
amendment to this Indenture or the Securities of one or more Series shall
be set forth in a supplemental indenture hereto that complies with the TIA as
then in effect.

 

Section 9.5.               Revocation and Effect of
Consents.

 

Until
an amendment or waiver becomes effective, a consent to it by a Holder of a
Security is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the
consenting Holder’s Security, even if notation of the consent is not made on
any Security.  However, any such Holder
or subsequent Holder may revoke the consent as to his Security or portion of a
Security if the Trustee receives the notice of revocation before the date the
amendment or waiver becomes effective.

 

Any
amendment or waiver once effective shall bind every Securityholder of each Series affected
by such amendment or waiver unless it is of the type described in any of
clauses (a) through (g) of Section 9.3.  In that case, the amendment or waiver shall
bind each Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder’s Security.

 

39

 

Section 9.6.               Notation on or Exchange of
Securities.

 

The
Trustee may place an appropriate notation about an amendment or waiver on any
Security of any Series thereafter authenticated.  The Company in exchange for Securities of
that Series may issue and the Trustee shall authenticate upon request new
Securities of that Series that reflect the amendment or waiver.

 

Section 9.7.               Trustee Protected.

 

In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. 
The Trustee shall sign all supplemental indentures, except that the
Trustee need not sign any supplemental indenture that adversely affects its
rights.

 

ARTICLE X.

MISCELLANEOUS

 

Section 10.1.             Trust Indenture Act Controls.

 

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

 

Section 10.2.             Notices.

 

Any
notice or communication by the Company or the Trustee to the other is duly
given if in writing and delivered in person or mailed by first-class mail:

 

if
to the Company:

 

STR
Holdings, Inc.

1699 King Street, Suite 400

Enfield,
Connecticut 06082

Attention:  General Counsel

 

if
to the Trustee:

 

U.S.
Bank National Association

60
Livingston Avenue

St.
Paul, MN  55107

Attention:  Ray Haverstock

 

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

 

40

 

Any
notice or communication to a Securityholder shall be delivered by first-class
mail or electronically.  Failure to mail
a notice or communication to a Securityholder of any Series or any defect
in it shall not affect its sufficiency with respect to other Securityholders of
that or any other Series.

 

If
a notice or communication is delivered in the manner provided above, within the
time prescribed, it is duly given, whether or not the Securityholder receives
it.

 

If
the Company mails a notice or communication to Securityholders, it shall mail a
copy to the Trustee and each Agent at the same time.

 

Section 10.3.             Communication by Holders with
Other Holders.

 

Securityholders
of any Series may communicate pursuant to TIA Section 312(b) with
other Securityholders of that Series or any other Series with respect
to their rights under this Indenture or the Securities of that Series or
all Series.  The Company, the Trustee,
the Registrar and anyone else shall have the protection of TIA Section 312(c).

 

Section 10.4.             Certificate and Opinion as to
Conditions Precedent.

 

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

 

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

 

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

 

Section 10.5.             Statements Required in
Certificate or Opinion.

 

Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and
shall include:

 

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

 

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

 

(c)           a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to express
an informed 

 

41

 

opinion as to whether or not
such covenant or condition has been complied with; and

 

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

 

Section 10.6.             Rules by Trustee and Agents.

 

The
Trustee may make reasonable rules for action by or a meeting of
Securityholders of one or more Series. 
Any Agent may make reasonable rules and set reasonable requirements
for its functions.

 

Section 10.7.             Legal Holidays.

 

Unless
otherwise provided by Board Resolution, Officers’ Certificate or supplemental
indenture for a particular Series, a “Legal Holiday” is any day that is
not a Business Day.  If a payment date is
a Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.

 

Section 10.8.             No Recourse Against Others.

 

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

 

Section 10.9.             Counterparts.

 

This
Indenture may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

 

Section 10.10.           Governing Law.

 

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

 

Section 10.11.           No Adverse Interpretation of Other
Agreements.

 

This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. 
Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.

 

42

 

Section 10.12.           Successors.

 

All
agreements of the Company in this Indenture and the Securities shall bind its
successor.  All agreements of the Trustee
in this Indenture shall bind its successor.

 

Section 10.13.           Severability.

 

In
case any provision in this Indenture or in the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

 

Section 10.14.           Table of Contents, Headings, Etc.

 

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

 

Section 10.15.           Securities in a Foreign Currency
or in ECU.

 

Unless
otherwise specified in a Board Resolution, a supplemental indenture hereto or
an Officers’ Certificate delivered pursuant to Section 2.2 of this
Indenture with respect to a particular Series of Securities, whenever for
purposes of this Indenture any action may be taken by the Holders of a
specified percentage in aggregate principal amount of Securities of all Series or
all Series affected by a particular action at the time outstanding and, at
such time, there are outstanding Securities of any Series which are
denominated in a coin or currency other than Dollars (including ECUs), then the
principal amount of Securities of such Series which shall be deemed to be
outstanding for the purpose of taking such action shall be that amount of
Dollars that could be obtained for such amount at the Market Exchange Rate at
such time.  For purposes of this Section 10.15,
“Market Exchange Rate” shall mean the noon Dollar buying rate in New
York City for cable transfers of that currency as published by the Federal
Reserve Bank of New York; provided, however, in the case of ECUs, Market
Exchange Rate shall mean the rate of exchange determined by the Commission of
the European Union (or any successor thereto) as published in the Official
Journal of the European Union (such publication or any successor publication,
the “Journal”).  If such Market
Exchange Rate is not available for any reason with respect to such currency,
the Trustee shall use, in its sole discretion and without liability on its
part, such quotation of the Federal Reserve Bank of New York or, in the case of
ECUs, the rate of exchange as published in the Journal, as of the most recent
available date, or quotations or, in the case of ECUs, rates of exchange from
one or more major banks in The City of New York or in the country of issue of
the currency in question or, in the case of ECUs, in Luxembourg or such other
quotations or, in the case of ECUs, rates of exchange as the Trustee, upon
consultation with the Company, shall deem appropriate.  The provisions of this paragraph shall apply
in determining the equivalent principal amount in respect of Securities of a Series 

 

43

 

denominated
in currency other than Dollars in connection with any action taken by Holders
of Securities pursuant to the terms of this Indenture.

 

All
decisions and determinations of the Trustee regarding the Market Exchange Rate
or any alternative determination provided for in the preceding paragraph shall
be in its sole discretion and shall, in the absence of manifest error, be
conclusive to the extent permitted by law for all purposes and irrevocably
binding upon the Company and all Holders.

 

Section 10.16.           Judgment Currency.

 

The
Company agrees, to the fullest extent that it may effectively do so under
applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of or
interest or other amount on the Securities of any Series (the “Required
Currency”) into a currency in which a judgment will be rendered (the “Judgment
Currency”), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the New
York Banking Day preceding the day on which final unappealable judgment is
entered and (b) its obligations under this Indenture to make payments in
the Required Currency (i) shall not be discharged or satisfied by any
tender, any recovery pursuant to any judgment (whether or not entered in
accordance with Subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose of
recovering in the Required Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Required Currency so
expressed to be payable, and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture.  For purposes of the foregoing, “New York
Banking Day” means any day except a Saturday, Sunday or a legal holiday in
The City of New York on which banking institutions are authorized or required
by law, regulation or executive order to close.

 

Section 10.17.           Benefits of Indenture.

 

Nothing
in this Indenture of the Securities, express or implied, shall give to any
person, other than the parties hereto, their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

 

44

 

ARTICLE XI.

SINKING FUNDS

 

Section 11.1.             Applicability of Article.

 

The
provisions of this Article shall be applicable to any sinking fund for the
retirement of the Securities of a Series, except as otherwise permitted or
required by any form of Security of such Series issued pursuant to this
Indenture.

 

The
minimum amount of any sinking fund payment provided for by the terms of the
Securities of any Series is herein referred to as a “mandatory sinking
fund payment” and any other amount provided for by the terms of Securities of
such Series is herein referred to as an “optional sinking fund payment.”  If provided for by the terms of Securities of
any Series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 11.2. 
Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of
such Series.

 

Section 11.2.             Satisfaction of Sinking Fund
Payments with Securities.

 

The
Company may, in satisfaction of all or any part of any sinking fund payment
with respect to the Securities of any Series to be made pursuant to the
terms of such Securities (1) deliver outstanding Securities of such Series to
which such sinking fund payment is applicable (other than any of such
Securities previously called for mandatory sinking fund redemption) and (2) apply
as credit Securities of such Series to which such sinking fund payment is
applicable and which have been redeemed either at the election of the Company
pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional
sinking fund payments or other optional redemptions pursuant to the terms of
such Securities, provided that such Securities have not been previously so
credited.  Such Securities shall be
received by the Trustee, together with an Officers’ Certificate with respect
thereto, not later than 15 days prior to the date on which the Trustee begins
the process of selecting Securities for redemption, and shall be credited for
such purpose by the Trustee at the price specified in such Securities for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly. 
If as a result of the delivery or credit of Securities in lieu of cash
payments pursuant to this Section 11.2, the principal amount of Securities
of such Series to be redeemed in order to exhaust the aforesaid cash
payment shall be less than $100,000, the Trustee need not call Securities of
such Series for redemption, except upon receipt of a Company Order that
such action be taken, and such cash payment shall be held by the Trustee or a
Paying Agent and applied to the next succeeding sinking fund payment, provided,
however, that the Trustee or such Paying Agent shall from time to time upon
receipt of a Company Order pay over and deliver to the Company any cash payment
so being held by the Trustee or such Paying Agent upon delivery by the Company
to the Trustee of Securities of that Series purchased by the Company
having an unpaid principal amount equal to the cash payment required to be
released to the Company.

 

45

 

Section 11.3.             Redemption of Securities for
Sinking Fund.

 

Not
less than 45 days (unless otherwise indicated in the Board Resolution,
supplemental indenture hereto or Officers’ Certificate in respect of a
particular Series of Securities) prior to each sinking fund payment date
for any Series of Securities, the Company will deliver to the Trustee an
Officers’ Certificate specifying the amount of the next ensuing mandatory
sinking fund payment for that Series pursuant to the terms of that Series,
the portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by delivering and
crediting of Securities of that Series pursuant to Section 11.2, and
the optional amount, if any, to be added in cash to the next ensuing mandatory
sinking fund payment, and the Company shall thereupon be obligated to pay the
amount therein specified.  Not less than
30 days (unless otherwise indicated in the Board Resolution, Officers’
Certificate or supplemental indenture in respect of a particular Series of
Securities) before each such sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.2 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided
in Section 3.3.  Such notice having
been duly given, the redemption of such Securities shall be made upon the terms
and in the manner stated in Sections 3.4, 3.5 and 3.6.

 

[signature page follows]

 

46

 

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

 

	
   

  	
  STR
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Its:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Its:

  

 

[SIGNATURE PAGE TO
INDENTURE]

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