Document:

exv10w16

 

Exhibit 10.16

Dated 30 November 2006

Truck-Lite Co. Limited

(as the Purchaser)

Truck-Lite Co., Inc.

(as the Purchaser Guarantor)

UIS Industries Limited

(as the Vendor)

United Components, Inc.

(as the Vendor Guarantor)

 

Share Purchase Agreement

relating to the shares in

Flexible Lamps Limited

 

99 Bishopsgate

London EC2M 3XF

+44 (0)20 7710 1000 (Tel)

+44 (0)20 7374 4460 (Fax)

www.lw.com

Contact: Martin Saywell / Rory Negus

 

 

CONTENTS

	 	 	 	 	 
	Clause	 	Page
	 
	1. Interpretation
	 	 	1	 
	 
	 	 	 	 
	2. Sale of Shares
	 	 	7	 
	 
	 	 	 	 
	3. Consideration
	 	 	7	 
	 
	 	 	 	 
	4. Completion
	 	 	8	 
	 
	 	 	 	 
	5. Stamping and share rights
	 	 	8	 
	 
	 	 	 	 
	6. Vendor Warranties
	 	 	9	 
	 
	 	 	 	 
	7. Restrictive Covenants
	 	 	12	 
	 
	 	 	 	 
	8. Specific Indemnity
	 	 	13	 
	 
	 	 	 	 
	9. Post Completion Obligations
	 	 	14	 
	 
	 	 	 	 
	10. Parent Guarantors
	 	 	14	 
	 
	 	 	 	 
	11. Confidentiality
	 	 	16	 
	 
	 	 	 	 
	12. Announcements
	 	 	17	 
	 
	 	 	 	 
	13. Further assurance
	 	 	18	 
	 
	 	 	 	 
	14. Entire agreement
	 	 	18	 
	 
	 	 	 	 
	15. Post Completion effect of Agreement
	 	 	18	 
	 
	 	 	 	 
	16. Waiver and variation
	 	 	18	 
	 
	 	 	 	 
	17. Remedies
	 	 	19	 
	 
	 	 	 	 
	18. Invalidity
	 	 	19	 
	 
	 	 	 	 
	19. Time of the essence
	 	 	19	 
	 
	 	 	 	 
	20. Assignment
	 	 	19	 
	 
	 	 	 	 
	21. Counterparts
	 	 	19	 
	 
	 	 	 	 
	22. Interest
	 	 	19	 
	 
	 	 	 	 
	23. Notices
	 	 	20	 
	 
	 	 	 	 
	24. Costs
	 	 	21	 
	 
	 	 	 	 
	25. Governing law and jurisdiction
	 	 	21	 
	 
	 	 	 	 
	26. Contracts (Rights Of Third Parties) Act 1999
	 	 	21	 
	 
	 	 	 	 
	27. Process agents
	 	 	21	 

 i 

 

 

	 	 	 	 	 
	Clause	 	Page
	 
	schedule 1 : Particulars of Group Companies
	 	 	23	 
	part 1 : Details of the Company
	 	 	23	 
	part 2 : Details of the Subsidiaries
	 	 	23	 
	 
	 	 	 	 
	schedule 2 : Completion Arrangements
	 	 	27	 
	 
	 	 	 	 
	schedule 3 : Warranties
	 	 	29	 
	 
	 	 	 	 
	schedule 4 : Limitations on Liability
	 	 	39	 
	 
	 	 	 	 
	schedule 5 : Properties
	 	 	42	 
	part 1 : Freehold Premises with registered titles
	 	 	42	 
	part 2 : Leasehold Premises with registered titles
	 	 	43	 
	 
	 	 	 	 
	schedule 6 : Completion Accounts
	 	 	44	 
	 
	 	 	 	 
	schedule 7 : Pensions
	 	 	48	 
	 
	 	 	 	 
	schedule 8 : Domain Names
	 	 	52	 

 ii 

 

 

THIS AGREEMENT is made on 30 November 2006

BETWEEN

	(1)	 	TRUCK-LITE CO. LIMITED (the “PURCHASER”) a company registered in England and Wales under
company number 460489 with its registered office at Waterfall Lane, Cradley Heath, West
Midlands B64 6QB;
	 
	(2)	 	TRUCK-LITE CO., INC. (the “PURCHASER GUARANTOR”) a company incorporated in the State of New
York whose address is at 310 East Elmwood Avenue, Falconer, New York, 14733, United States;
	 
	(3)	 	UIS INDUSTRIES LIMITED (the “VENDOR”) a company registered in England and Wales under company
number 02691555 with its registered office at Barlows Road, Harlow, Essex CM19 5FA; and
	 
	(4)	 	UNITED COMPONENTS, INC. (the “VENDOR GUARANTOR”) a company incorporated in Delaware whose
address is at 14601 Hwy. 41 N, Evansville IN 47725-9357, United States.

BACKGROUND:

	(A)	 	The Vendor wishes to sell and the Purchaser wishes to acquire the entire issued share capital
of the Company in each case on and subject to the terms of this Agreement.
	 
	(B)	 	The Purchaser Guarantor is the parent company of the Purchaser and has entered into this
Agreement as guarantor of the obligations and liabilities of the Purchaser pursuant to and
under this Agreement.
	 
	(C)	 	The Vendor Guarantor is the parent company of the Vendor and has entered into this Agreement
as guarantor of the obligations and liabilities of the Vendor pursuant to and under this
Agreement.

IT IS AGREED THAT

	1.	 	Interpretation
	 
	1.1	 	Definitions
	 
	 	 	In this Agreement where the context admits:
	 
	 	 	“Additional Consideration” has the meaning set out in clause 3.2;
	 
	 	 	“Affiliate” means, in relation to a body corporate, any subsidiary or holding company of
such body corporate, and any subsidiary of any such holding company for the time being;
	 
	 	 	“Agreed Form” means a document in the terms signed or initialled by or on behalf of the
parties for identification;
	 
	 	 	“Audited Accounts” means:

	 	(A)	 	the audited balance sheet of the Company (and, where relevant, the audited
consolidated balance sheet of the Company and the Subsidiaries) made up as at the
Balance Sheet Date; and
	 
	 	(B)	 	the audited profit and loss account of the Company (and, where relevant, the
audited, consolidated, profit and loss account of the Company and the Subsidiaries) in
respect of the financial year ended on the Balance Sheet Date including, in each case,
the notes thereto and the directors’ report and auditors’ report;

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“Balance Sheet Date” means 31 December 2005;

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for
ordinary banking business in London;

“Company” means Flexible Lamps Limited, a private company limited by shares incorporated in
England and Wales under company number 195431 on 31 January 1924 with its registered office
at Barrows Road, Harlow, Essex, CM19 5FA;

“Completion” means completion of the sale and purchase of the Shares in accordance with
clause 4;

“Completion Date” means the date upon which Completion takes place;

“Continuing Directors” means Dennis Cunning and Lynne Baker who will continue as directors
of the Company and in the case of Dennis Cunning the Subsidiaries following Completion;

“Data Room Documents” means the documents made available to the Purchaser in the online data
room hosted by Intralinks under the room index ‘Project Dazzle’, and contained on the CD-ROM
referred to in the Disclosure Letter;

“Disclosed” means fairly disclosed in the Disclosure Letter or this Agreement. For these
purposes, “fairly disclosed” in relation to any fact, matter or circumstance shall be where
the disclosure contains sufficient information to enable a reasonable assessment to be made
regarding that fact, matter or circumstance and its import or likely import;

“Directors” means in relation to the Company or any of the Subsidiaries, its directors;

“Disclosure Letter” means the letter dated the date hereof written and delivered by or on
behalf of the Vendor to the Purchaser immediately before the signing of this Agreement;

“Disposal” means a sale, transfer, gift, assignment or disposal of any interest in the
Relevant Assets or entering into a legally binding agreement to do any of such acts or
things;

“Disposal Costs” means in aggregate the sum of:

	 	(A)	 	any Tax incurred by the Company or any of the Subsidiaries on a Disposal
(ignoring for these purposes the effect of any Buyer’s Relief, as defined in the Tax
Deed);
	 
	 	(B)	 	the actual costs incurred by the Company or any of the Subsidiaries in
relocating the assets of the Company located on the Relevant Assets;
	 
	 	(C)	 	the actual cost incurred by the Company or any of the Subsidiaries in
terminating any full or part time employees or independent contractors of the Company
or any of the Subsidiaries whose place of work was at the Relevant Assets or who were
employed or engaged in a part of the business carried on at the Relevant Assets
regardless of whether such full or part time employees or independent contractors were
situated at the Relevant Assets or not;
	 
	 	(D)	 	any reasonable advisors costs incurred by the Company or any of the
Subsidiaries in the disposal of the Relevant Assets including but not limited to legal
costs, survey costs and real estate brokers fees; and
	 
	 	(E)	 	any actual costs incurred by the Company for asbestos remediation work required
by the buyer of the Relevant Asset to be undertaken by the Company;

“Disposal Costs Retainer” means an amount of £1,000,000;

“Domain Names” means those domain names listed in schedule 8;

2

 

“Employee” means a director or officer (whether or not employed by a Group Company) and
employee of each Group Company;

“Encumbrance” includes any interest or equity of any person (including any right to acquire,
option or right of pre-emption); any mortgage, charge, pledge, lien, assignment,
hypothecation, security interest (including any created by law), title retention or other
security agreement or arrangement; and any rental, hire purchase, credit or conditional sale
or other agreement for payment on deferred terms;

“Environment” means all or any of the following media, namely air (including, without
limitation, the air within buildings or other natural or man made structures above or below
ground), water (including, without limitation, coastal and inland waters, surface or ground
water, water in pipe, drainage or sewerage systems), or land (including, without limitation,
surface land, sub-surface strata, sea bed and river bed under water and natural and man-made
structures);

“Environmental Laws” means all international, European Union, national, state, federal,
regional or local laws (including common law, statute law, civil, criminal and
administrative law), together with all subordinate legislation and regulatory codes of
practice, including without limitation guidance notes, circulars, decisions, regulations and
judgments, together with any judicial or administrative interpretation of each of the
foregoing in force and binding at the Completion Date which has as a purpose or effect the
protection of and prevention of harm to the Environment or relates in any way to: any
Hazardous Substance or packaging, noise, vibration, radiation or interference with use or
enjoyment of land or the erection, occupation or use of man-made or natural structures above
or below ground;

“Environmental Matters” means:

	 	(A)	 	pollution or contamination of the Environment; and/or
	 
	 	(B)	 	the generation, manufacture, processing, handling, storage, distribution, use,
treatment, removal, transport, disposal, emission, release, spillage, deposit or
discharge of Hazardous Substances to the extent that they are regulated by
Environmental Law; and/or
	 
	 	(C)	 	the exposure of any person (including employees) to Hazardous Substances;

“Environmental Consents” means all or any permit, licence, authorisation, approval, consent,
permission, certificate or registration including any condition thereof issued, required by
any Subsidiary under or in relation to Environmental Laws relating to either the carrying on
of its business or the use of, or any activities or operations carried out at, the Premises;

“Final Consideration” means the aggregate consideration payable by the Purchaser to the
Vendor pursuant to this Agreement for the Shares as finally determined, including without
limitation the Initial Consideration, the Additional Consideration (if any), the adjustments
(if any) to be made in accordance with schedule 6 and the payments (if any) to be made in
accordance with schedule 7;

“GAAP” means generally accepted accounting principles in the United Kingdom;

“Group” means the Company and all of the Subsidiaries and “Group Company” means any one of
them;

“Gross Proceeds” means the total consideration received by any member of the Purchaser’s
Group for the Disposal;

“Hazardous Substance” means any natural or artificial substance or combination of substances
(whether in solid or liquid form or in the form of a gas or vapour) capable of causing harm
to the Environment including but not limited to waste of any nature and any hazardous, toxic
or dangerous substance or article;

3

 

“Indemnity Claim” means any claim under the indemnity contained in clause 8.1;

“ICTA” means the Income and Corporation Taxes Act 1988;

“Initial Consideration” means the consideration for the Shares stated in clause 3;

“Intellectual Property” means:

	 	(A)	 	patents, utility models, trade marks, design rights, copyright, database
rights, topography rights, plant variety rights, confidential information and knowledge
(including know how, inventions, secret formulae and processes, market information, and
lists of customers and suppliers), and rights protecting goodwill and reputation;
	 
	 	(B)	 	all other forms of protection having a similar nature or effect anywhere in the
world to any of the rights described in (A) above; and
	 
	 	(C)	 	applications for or registrations of any of the rights described in (A) or (B)
above.

“IT Systems” means any and all computer and telecommunications and network equipment, and
any and all computer programs used in connection with the business of the Group and which
are material to the business of the Group as a whole;

“Law” or “Laws” includes all applicable legislation, statutes, directives, regulations,
judgments, decisions, decrees, orders, instruments, by-laws, and other legislative measures
or decisions having the force of law, treaties, conventions and other agreements between
states, or between states and the European Union or other supranational bodies, rules of
common law, customary law and equity and all civil or other codes and all other laws of, or
having effect in, any jurisdiction from time to time and whether before or after the date of
this Agreement;

“Management Accounts” means the consolidated management accounts of the Company and the
Subsidiaries for the period from the Balance Sheet Date to 30 September 2006 true copies of
which are contained within the Data Room and Documents and referred to in the Disclosure
Letter;

“Material Adverse Effect” means an event which has or is likely to have a material and
adverse effect on the assets, liabilities, regulatory position, business, condition
(financial or otherwise) or operations (including financial results of operations) of the
Group as a whole;

“Material Contract” means an agreement or arrangement to which the Company or any of the
Subsidiaries is a party or is bound by and which is either of material importance to the
business, assets, liabilities, income or expenditure of any of the Group Companies or the
Group taken as a whole or equal to or greater than £50,000 in value per annum of sales or
purchases by any Group Company or the Group;

“Net Proceeds” means the Gross Proceeds less the Disposal Costs;

“Pension Scheme” means The Flexible Lamps Limited Retirement Benefits Scheme;

“Phase 1 Report” means the phase 1 environment site assessment report prepared by MLM
forming part of the Data Room Documents;

“Premises” means the land and premises particulars of which are set out in schedule 5;

“Proceedings” has the meaning given in clause 25;

“Purchaser’s Group” means the Purchaser and each of its Affiliates and, following
Completion, the Company and the Subsidiaries;

4

 

“Relevant Benefits” means any pension (including an annuity), lump sum, gratuity or other
like benefit given or to be given on retirement or on death, or by virtue of a pension
sharing order or provision, or in anticipation of retirement, or, in connection with past
service, after retirement or death, or to be given on or in anticipation of or in connection
with any change in the nature of the service of the employee in question. For the purpose
of this definition “employee” includes (a) any officer of the company, any director of the
company and any other person taking part in the management of the affairs of the company,
and (b) a person who is to be or has been an employee; and the terms “service” and
“retirement” are to be construed accordingly;

“Relevant Assets” means all the freehold land known as 4, Rookwood Way, Haverhill CB9 8PB
and registered at the Land Registry under title number SK163268;

“Representatives” means, in relation to a party, its respective Affiliates and the
directors, officers, employees, agents, external legal advisers, accountants, consultants
and financial advisers of that party and/or any of its respective Affiliates;

“Shares” means the shares comprising the entire issued share capital of the Company, being
2,415,000 ordinary shares of £0.50 each;

“Subsidiary” means at any relevant time any the subsidiary of the Company, basic information
concerning each current subsidiary of the Company being set out in schedule 1;

“Tax” or “Taxation” means all forms of taxation, duties, levies and imposts whether of the
United Kingdom or any other jurisdiction including, (without limitation), corporation tax
(and any instalment payments in respect of corporation tax), advance corporation tax, income
tax, capital gains tax, value added tax, customs and other import duties, stamp duty, stamp
duty reserve tax, capital duties, national insurance contributions, local authority council
taxes and duties, and any payment which the Company or any member of the Group may be or
become bound to make to any person as a result of the operation of any enactment relating to
any such taxes or duties, and all penalties, charges and interest relating to any of the
foregoing or resulting from a failure to comply with the provisions of any enactment
relating to any of the foregoing;

“Tax Deed” means the deed in Agreed Form relating to taxation, to be executed and delivered
at Completion;

“Transaction Documents” means this Agreement, the Tax Deed, the Disclosure Letter and any
other document entered into between the Vendor and the Purchaser in connection with the
transactions contemplated hereby;

“VATA” means the Value Added Tax Act 1994;

“Vendor Group” means the Vendor, the Vendor Guarantor and each of their subsidiaries
immediately after Completion excluding, for the avoidance of doubt, any Group Company and
any holder (whether directly or indirectly) of any shares or securities of the Vendor
Guarantor; and

“Warranties” means the warranties set out in schedule 3.

	1.2	 	Construction of certain references
	 
	 	 	In this Agreement, where the context admits:

	 	(A)	 	words and phrases the definitions of which are contained or referred to in the
Companies Act shall be construed as having the meanings thereby attributed to them;
	 
	 	(B)	 	every reference to a particular statutory provision or other Law shall be
construed also as a reference to all other Laws made under the Law referred to and to
all such Laws as amended, re-enacted, consolidated or replaced or as their application
or interpretation is affected by

5

 

	 	 	 	other Laws from time to time and whether before or after Completion provided that, as
between the parties, no such amendment or modification shall apply for the purposes
of this Agreement to the extent that it would impose any new or extended obligation,
liability or restriction on, or otherwise adversely affect the rights of, any party;

	 	(C)	 	where any statement is to the effect that the Vendor is not aware of any matter
or circumstance, or is a statement qualified by the expression “so far as the Vendor is
aware” or “to the best of the Vendor’s knowledge and belief” or any similar expression,
that statement shall be deemed to include an additional statement that it has been made
after due and careful enquiry of Dennis Cunning, Lynne Baker, Phillip Halliwell, and
Neil Stocks only, and of no other person and the Vendor shall not be required to have
made any additional enquiries;
	 
	 	(D)	 	references to:

	 	(1)	 	clauses and schedules are references to clauses of and schedules
to this Agreement, references to paragraphs are, unless otherwise stated,
references to paragraphs of the schedule in which the reference appears, and
references to this Agreement include the schedules;
	 
	 	(2)	 	the singular shall include the plural and vice versa and
references to one gender include any other gender;
	 
	 	(3)	 	any party includes its successors in title and permitted assigns;
	 
	 	(4)	 	a “person” includes any individual, partnership, body corporate,
corporation sole or aggregate, state or agency of a state, and any
unincorporated association or organisation, in each case whether or not having
separate legal personality;
	 
	 	(5)	 	a “company” includes any company, corporation or other body
corporate wherever and however incorporated or established;
	 
	 	(6)	 	times of the day are to London time unless otherwise stated;
	 
	 	(7)	 	writing shall include any modes of reproducing words in a legible
and non-transitory form; and
	 
	 	(8)	 	any English legal term for any action, remedy, method of judicial
proceeding, legal document, legal status, court official or any other legal
concept or thing shall in respect of any jurisdiction other than England be
deemed to include what most nearly approximates in that jurisdiction to the
English legal term;

	 	(E)	 	words introduced by the word “other” shall not be given a restrictive meaning
because they are preceded by words referring to a particular class of acts, matters or
things; and
	 
	 	(F)	 	general words shall not be given a restrictive meaning because they are
followed by words which are particular examples of the acts, matters or things covered
by the general words and the word “including” shall be construed without limitation.

	1.3	 	Headings
	 
	 	 	The headings and sub-headings are inserted for convenience only and shall not affect the
construction of this Agreement.
	 
	1.4	 	Schedules
	 
	 	 	Each of the schedules shall have effect as set out in this Agreement.

6

 

	2.	 	Sale of Shares
	 
	2.1	 	Sale and Purchase
	 
	 	 	Subject to the terms of this Agreement, the Vendor shall sell with full title guarantee and
the Purchaser shall purchase, free from all Encumbrances and together with all rights now or
hereafter attaching thereto the entire issued share capital of the Company comprising
2,415,000 ordinary shares of £0.50 each.
	 
	2.2	 	No sale of part only
	 
	 	 	Neither the Vendor nor the Purchaser shall be obliged to complete the sale and purchase of
any of the Shares unless the sale and purchase of all the Shares is completed
simultaneously.
	 
	3.	 	Consideration
	 
	3.1	 	Initial Consideration
	 
	 	 	The Initial Consideration for the sale of the Shares shall be the payment by the Purchaser
of the sum of £20,100,000 subject to adjustment as set out in this Agreement (including
without limitation schedule 6 and schedule 7) and in the Tax Deed.
	 
	3.2	 	Anti-embarrassment
	 
	 	 	The Purchaser hereby covenants with the Vendor that the Purchaser shall pay to the Vendor a
sum equal to the whole of the Net Proceeds (the “Additional Consideration”) by way of
additional consideration for the Shares, if a Disposal is made within 18 months of the
Completion Date. The provisions of this clause 3.2 are subject to clauses 3.3 to 3.6
(inclusive).
	 
	3.3	 	The Purchaser hereby covenants with the Vendor that it shall ensure that:

	 	(A)	 	any Disposal falling within clause 3.2 above, shall be made by way of an
agreement in writing, such agreement to provide for completion of such Disposal to take
place at a specified time and place on a specified date;
	 
	 	(B)	 	in respect of any Disposal falling within clause 3.2 above, the Purchaser shall
pay to the Vendor within 5 Business Days of receiving the cash proceeds of such
Disposal (or, if it receives non-cash consideration, within 5 Business Days of such
non-cash consideration being determined in accordance with clause 3.3(D) below) an
amount equal to the Gross Proceeds less the Disposal Costs Retainer;
	 
	 	(C)	 	at the time payment is made to the Vendor pursuant to clause 3.3(B) the
Purchaser shall deposit the Disposal Costs Retainer into an interest bearing account
until the Disposal Costs have been ascertained in accordance with clause 3.4; and
	 
	 	(D)	 	if any part of the consideration for any Disposal falling within clause 3.2
above is in non-cash form, the fair market value of such non-cash consideration shall
be determined by such independent chartered accountant as shall be appointed by
agreement between the parties, and failing such appointment, such person as shall be
appointed by the President for the time being of the Institute of Chartered Accountants
for England and Wales (on application made by either the Purchaser or the Vendor), who
shall act as expert not arbitrator, and the Purchaser shall make cash funds available
to pay such additional consideration to the Vendor within 5 Business Days following
such determination.

	3.4	 	The Disposal Costs shall be ascertained by the Purchaser by the later of the first
anniversary of the date of completion of the Disposal and the date of determination by the
independent chartered accountant of the non-cash consideration pursuant to clause 3.3(D). The
balance (if any) of the

7

 

	 	 	Disposal Costs Retainer less the ascertained Disposal Costs shall be paid by the Purchaser
to the Vendor within 10 Business Days of the ascertainment by the Purchaser of the Disposal
Costs together with a pro-rata share of any interest accrued on the Disposal Costs Retainer.

	3.5	 	The Purchaser shall notify the Vendor within 20 Business Days of entering into an agreement
in respect of any conditional or unconditional Disposal falling within clause 3.2 above, such
notification to include the consideration payable to the Purchaser in respect of such
Disposal.
	 
	3.6	 	Any payments of Additional Consideration to be made to the Vendor pursuant to this clause 3
shall be made in pounds sterling by way of electronic transfer into the account the Vendor
shall have notified in advance to the Purchaser.
	 
	3.7	 	The Purchaser shall procure that the Vendor is permitted access at reasonable times to all
relevant documents reasonably required by the Vendor to verify the compliance with the terms
of this clause 3.
	 
	3.8	 	The Vendor hereby covenants with the Purchaser that the Vendor shall deliver to the Purchaser
on the Completion Date any other relevant documents in the possession of the Vendor relating
to the Relevant Assets including without limitation contractual negotiations, legal advice or
legal opinion, title reports and any other documents.
	 
	4.	 	Completion
	 
	4.1	 	Completion shall take place at the offices of Latham & Watkins immediately following the
signing of this Agreement. At Completion:

	 	(A)	 	the Vendor shall do or procure the carrying out of all those things listed in
paragraph 1 of schedule 2; and
	 
	 	(B)	 	the Purchaser shall do or procure the carrying out of all those things listed
in paragraph 2 of schedule 2.

	4.2	 	Where the obligations of the Vendor or the Purchaser under this clause 4 and schedule 2 are
not complied with or waived on or prior to the Completion Date the Purchaser, in the case of
non-compliance by the Vendor, or the Vendor, in the case of non-compliance by the Purchaser,
may (in addition to and without prejudice to all other rights and remedies) by written notice
served on the other party on such date:

	 	(A)	 	defer Completion to a new date being not more than 20 Business Days following
the Completion Date (so that the provisions of this clause 4 shall apply to Completion
so deferred) provided that such deferral may only occur once;
	 
	 	(B)	 	proceed to Completion as far as practicable (without limiting its rights under
this Agreement); or
	 
	 	(C)	 	terminate this Agreement (other than clause 1 (Interpretation), clause 11
(Confidentiality), clause 12 (Announcements), clause 14 (Entire Agreement), clause 17
(Remedies), clause 20 (Assignment), clause 22 (Interest), clause 23 (Notices), clause
24 (Costs), clause 25 (Governing Law and Jurisdiction) and clause 27 (Process Agent)),
without liability on the part of the terminating party.

	5.	 	Stamping and share rights
	 
	5.1	 	As soon as reasonably practicable, and in any event within 3 months following Completion, the
Purchaser shall procure delivery of the stock transfer forms in respect of the Shares to the
stamp office for stamping and following their return, procure the registration of the
Purchaser as the legal holder of all of the Shares transferred to it under this Agreement.

8

 

	5.2	 	The Vendor declares that for as long as it remains the registered holder of any of the Shares
after Completion (and without prejudice to the Vendor’s right in respect of the Consideration)
it will:

	 	(A)	 	hold such Shares and the dividends and any other moneys paid or distributed in
respect of them after Completion and all rights arising out of or in connection with
them in trust for the Purchaser; and
	 
	 	(B)	 	deal with such Shares and all such dividends, distributions and rights as the
Purchaser may direct for the period between Completion and the day on which the
Purchaser or its nominee is entered in the register of members of the Company as the
holder of such Shares.

	5.3	 	With effect from Completion the Vendor irrevocably appoints the Purchaser as its attorney for
the purpose of exercising any rights, privileges or duties attaching to the Shares including
receiving notices of and attending and voting at all meetings of the members of the Company
from Completion to the day on which the Purchaser or its nominee is entered in the register of
members of the Company as the holder of such Shares.
	 
	5.4	 	For the purpose of clause 5.3, the Vendor authorises:

	 	(A)	 	the Company to send any notices in respect of its Shares to the Purchaser; and
	 
	 	(B)	 	the Purchaser to complete and return proxy cards, consents to short notice and
any other document required to be signed by the Vendors as a member of the Company.

	6.	 	Vendor Warranties
	 
	6.1	 	General

	 	(A)	 	The Vendor hereby warrants to the Purchaser in the terms of the Warranties
subject to the provisions of this Agreement and in particular the exclusions and
limitations in schedule 4.
	 
	 	(B)	 	Any sum payable by the Vendor in respect of any breach of the Warranties shall
be treated as a reduction in the Initial Consideration.
	 
	 	(C)	 	The Vendor acknowledges that the Purchaser is entering into this Agreement in
express reliance on the Warranties given by the Vendor.

	6.2	 	Disclosure
	 
	 	 	The Warranties are given subject to matters fairly disclosed (with sufficient details to
identify the nature and scope of the matter disclosed) in the Disclosure Letter and the
Purchaser shall have no claim in respect of any of the Warranties in relation to any fact or
matter so disclosed.
	 
	6.3	 	Warranties given on the date of this Agreement
	 
	 	 	The Warranties are given on the date of this Agreement and the Vendor is under no obligation
to disclose to the Purchaser anything which is or may constitute a breach of or be
inconsistent with any of the Warranties of which it may become aware after the date of this
Agreement.
	 
	6.4	 	Warranties Independent
	 
	 	 	Each of the Warranties shall be construed as a separate and independent Warranty and shall
not be restricted or limited by reference to any other Warranty or any term of this
Agreement.
	 
	6.5	 	Purchaser’s Remedies

	 	(A)	 	The Purchaser acknowledges that it has not been induced to enter into this
Agreement by, and that it does not in connection with this Agreement or its subject
matter rely on, any

9

 

	 	 	 	representation, warranty, promise or assurance by the Vendor or any other person save
for those contained in this Agreement. The Purchaser agrees that, subject only to
clause 6.5(B), it shall have no right or remedy in respect of, and shall not in
connection with any claim arising in relation to this Agreement or the Tax Deed or
their respective subject matters plead or assert the making or existence of, any
representation, warranty, promise or assurance save for those therein contained in
respect of which, the Purchaser shall have no right to rescind or terminate this
Agreement and the only remedy of the Purchaser shall be damages for breach of this
Agreement and such other remedies as are available under the Tax Deed.
	 
	 	(B)	 	Nothing in the Transaction Documents shall restrict, exclude or affect any
right or remedy available to the Purchaser in respect of fraud.

	6.6	 	Waiver of claims
	 
	 	 	The Vendor and the Purchaser waive and shall procure that all members of their respective
Groups shall waive any rights, remedies they may have against any employee, director, agent
or officer of the Vendor Group, the Company and any Subsidiary with respect to claims
arising out of any information, opinion or advice supplied or given (or omitted to be
supplied or given) in connection with the proposed entering into of this Agreement or the
other Transaction Documents and the sale of the Shares, other than in the case of fraud.
The rights of the said persons are intended to be enforceable under the Contracts (Rights of
Third Parties) Act 1999 and the parties to this Agreement may rescind or vary this Agreement
without the consent of any of such persons.
	 
	6.7	 	Purchaser Warranties
	 
	 	 	The Purchaser and the Purchaser Guarantor jointly and severally warrant to the Vendor as
follows:

	 	(A)	 	the Purchaser and the Purchaser Guarantor have the requisite power and
authority to enter into and perform this Agreement and any other agreement referred to
herein to which they are or have agreed to become a party (the “Purchaser Documents”);
	 
	 	(B)	 	this Agreement constitutes and the Purchaser Documents will, when executed,
constitute binding obligations of the Purchaser and/or the Purchaser Guarantor in
accordance with their respective terms;
	 
	 	(C)	 	no order has been made and no resolution has been passed for the winding up of
the Purchaser or the Purchaser Guarantor or for a provisional liquidator to be
appointed in respect of it and no petition has been presented and no meeting has been
convened for the purposes of winding up the Purchaser or the Purchaser Guarantor;
	 
	 	(D)	 	no administration order has been made and no petition for such an order has
been presented in respect of the Purchaser or the Purchaser Guarantor;
	 
	 	(E)	 	no receiver (which expression shall include an administrative receiver) has
been appointed in respect of the Purchaser or the Purchaser Guarantor;
	 
	 	(F)	 	neither the Purchaser nor the Purchaser Guarantor is insolvent or unable to pay
its debts within the meaning of s.123 Insolvency Act 1986 or has stopped paying its
debts as they fall due;
	 
	 	(G)	 	no voluntary arrangement has been proposed under s.1 of the Insolvency Act 1986
or any equivalent provision in a foreign jurisdiction in respect of the Purchaser or
the Purchaser Guarantor;
	 
	 	(H)	 	no event analogous to any of the foregoing has occurred in or outside England
with respect to the Purchaser or the Purchaser Guarantor;

10

 

	 	(I)	 	the Purchaser and the Purchaser Guarantor have obtained all necessary
shareholder and board approvals in respect of the entry into of this Agreement and the
Purchaser Documents; and
	 
	 	(J)	 	the execution and delivery of, and the performance by the Purchaser and the
Purchaser Guarantor of their obligations under, this Agreement and the Purchaser
Documents will not:

	 	(1)	 	be or result in a breach of any provision of the memorandum or
articles of association of the Purchaser or the Purchaser Guarantor;
	 
	 	(2)	 	be or result in a breach of, or constitute a default under, any
instrument to which the Purchaser or the Purchaser Guarantor is a party or by
which the Purchaser or the Purchaser Guarantor is bound and which is material in
the context of the transactions contemplated by this Agreement;
	 
	 	(3)	 	be or result in a breach of any order, judgment or decree of any
court or governmental agency to which the Purchaser or the Purchaser Guarantor
is a party or by which the Purchaser or the Purchaser Guarantor is bound and
which is material in the context of the transactions contemplated by this
Agreement; or
	 
	 	(4)	 	require the Purchaser or the Purchaser Guarantor to obtain any
consent or approval of, or give any notice to or make any registration with, any
governmental or other authority which has not been obtained or made at the date
hereof both on an unconditional basis and on a basis which cannot be revoked
(save pursuant to any legal or regulatory entitlement to revoke the same other
than by reason of any misrepresentation or misstatement); and

	 	(K)	 	the Purchaser and the Purchaser Guarantor have immediately available on an
unconditional basis (subject only to Completion) the necessary cash resources to meet
their obligations under this Agreement and the Purchaser Documents.

	6.8	 	Vendor Warranties
	 
	 	 	The Vendor and the Vendor Guarantor jointly and severally warrant to the Purchaser as
follows:

	 	(A)	 	the Vendor and the Vendor Guarantor have the requisite power and authority to
enter into and perform this Agreement and any other document referred to herein to
which they are or have agreed to become a party;
	 
	 	(B)	 	this Agreement constitutes and the other documents referred to herein will,
when executed, constitute binding obligations of the Vendor and/or the Vendor Guarantor
in accordance with their respective terms;
	 
	 	(C)	 	no order has been made and no resolution has been passed for the winding up of
the Vendor or the Vendor Guarantor or for a provisional liquidator to be appointed in
respect of it and no petition has been presented and no meeting has been convened for
the purposes of winding up the Vendor or the Vendor Guarantor;
	 
	 	(D)	 	no administration order has been made and no petition for such an order has
been presented in respect of the Vendor or the Vendor Guarantor;
	 
	 	(E)	 	no receiver (which expression shall include an administrative receiver) has
been appointed in respect of the Vendor or the Vendor Guarantor;
	 
	 	(F)	 	neither the Vendor nor the Vendor Guarantor is insolvent or unable to pay its
debts within the meaning of s.123 Insolvency Act 1986 or has stopped paying its debts
as they fall due;

11

 

	 	(G)	 	no voluntary arrangement has been proposed under s.1 of the Insolvency Act 1986
or any equivalent provision in a foreign jurisdiction in respect of the Vendor or the
Vendor Guarantor;
	 
	 	(H)	 	no event analogous to any of the foregoing has occurred in or outside England
with respect to the Vendor or the Vendor Guarantor;
	 
	 	(I)	 	the Vendor and the Vendor Guarantor have obtained all necessary shareholder and
board approvals in respect of the entry into of this Agreement and the Vendor
Documents; and
	 
	 	(J)	 	the execution and delivery of, and the performance by the Vendor and the Vendor
Guarantor of their obligations under, this Agreement and any other document referred to
herein will not:

	 	(1)	 	be or result in a breach of any provision of the memorandum or
articles of association of the Vendor or the Vendor Guarantor;
	 
	 	(2)	 	be or result in a breach of, or constitute a default under, any
instrument to which the Vendor or the Vendor Guarantor is a party or by which
the Vendor or the Vendor Guarantor is bound and which is material in the context
of the transactions contemplated by this Agreement;
	 
	 	(3)	 	be or result in a breach of any order, judgment or decree of any
court or governmental agency to which the Vendor or the Vendor Guarantor is a
party or by which the Vendor or the Vendor Guarantor is bound and which is
material in the context of the transactions contemplated by this Agreement; or
	 
	 	(4)	 	require the Vendor or the Vendor Guarantor to obtain any consent
or approval of, or give any notice to or make any registration with, any
governmental or other authority which has not been obtained or made at the date
hereof both on an unconditional basis and on a basis which cannot be revoked
(save pursuant to any legal or regulatory entitlement to revoke the same other
than by reason of any misrepresentation or misstatement).

	7.	 	Restrictive Covenants
	 
	7.1	 	Restricted Business
	 
	 	 	In this clause 7, “Restricted Business” means the business of the manufacture of commercial
vehicle exterior lighting systems carried on within the European Union and which directly or
indirectly competes with the business of the Company or any of the Subsidiaries carried on
at the Completion Date.
	 
	7.2	 	Undertakings
	 
	 	 	The Vendor undertakes (for the benefit of the Purchaser, the Company and the Subsidiaries)
that the Vendor will not and that it will procure that none of the members of the Vendor’s
Group will:

	 	(A)	 	for the period of 60 months after the Completion Date, either on its own
account or in conjunction with or on behalf of any person, firm or company, carry on or
be engaged, concerned or interested (directly or indirectly and whether as principal,
shareholder, director, employee, agent, consultant, partner or otherwise) in carrying
on any Restricted Business, other than as a holder for investment purposes only (which
shall exclude a management function or any material influence) of any shares,
debentures or other participation and a holding of not more than 5 per cent of any
class of shares or debentures shall be deemed to be for such purposes unless the
contrary is shown;

12

 

	 	(B)	 	for the period of 18 months after the Completion Date, either on its own
account or in conjunction with or on behalf of any person, firm or company, solicit or
endeavour to entice away from the Company or any of the Subsidiaries any person who at
the Completion Date is (or who within a period of one year prior to the Completion Date
has been) an officer or employee of, or an independent contractor supplying his/her
labour or services to, the Company or any of the Subsidiaries whether or not such
person would commit a breach of contract by reason of leaving service or office; and
	 
	 	(C)	 	for the period of 18 months after the Completion Date, in connection with any
Restricted Business, either on its own account or in conjunction with or on behalf of
any person, firm or company, solicit the custom of or endeavour to entice away from the
Company or any of the Subsidiaries any person who at the Completion Date is (or who
within a period of one year prior to the Completion Date has been) a client or customer
of the Company or any of the Subsidiaries whether or not such person would commit a
breach of contract by reason of transferring business.

	7.3	 	Separate undertakings
	 
	 	 	Each of the undertakings in clause 7.2 shall be construed as a separate and independent
undertaking and if one or more of the undertakings is held to be void or unenforceable, the
validity of the remaining undertakings shall not be affected.
	 
	7.4	 	Reasonableness
	 
	 	 	The Vendor agrees that each of the restrictions and undertakings contained in clauses 7.2
are reasonable and necessary for the protection of the Purchaser’s legitimate interests in
the goodwill of the Company and the Subsidiaries, but if any such restriction or undertaking
shall be found to be void or voidable but would be valid and enforceable if some part or
parts of the restriction or undertaking were deleted, such restriction or undertaking shall
apply with such modification as may be necessary to make it valid and enforceable.
	 
	7.5	 	Void or unenforceable restrictions
	 
	 	 	Without prejudice to clause 7.4, if any restriction or undertaking is found by any court or
other competent authority to be void or unenforceable the parties shall negotiate in good
faith to replace such void or unenforceable restriction or undertaking with a valid
provision which, as far as possible, has the same commercial effect as that which it
replaces.
	 
	8.	 	Specific Indemnity
	 
	8.1	 	Indemnity by Vendor
	 
	 	 	Subject to the limitations in clause 8.3, the Vendor indemnifies and holds harmless the
Purchaser in respect of any liability of a Group Company to pay any VAT (or equivalent tax)
in Germany which arose prior to Completion in connection with any supplies made to or by any
company within the Daimler Chrysler group including, for the avoidance of doubt, any related
fines, interest or penalties arising in connection with such supplies (unless such amount is
already recovered by the Purchaser under the Tax Deed or has been provided for in the
Completion Accounts).
	 
	8.2	 	Set-off Right
	 
	 	 	The Purchaser is entitled to set-off any amounts that are due and payable pursuant to clause
8.1 against any amounts that are due and payable by the Purchaser to the Vendor under this
Agreement, in particular, any payment to be made by the Purchaser to the Vendor under
schedule 6, schedule 7 or clause 3.2 of this Agreement.

13

 

	8.3	 	Limitations on Liability
	 
	 	 	The following limitations contained in schedule 4 apply to an Indemnity Claim:

	 	(A)	 	paragraph 4 (Matters reflected in accounts);
	 
	 	(B)	 	paragraph 8 (Recovery from third parties)
	 
	 	(C)	 	paragraph 9 (Non quantifiable liabilities)
	 
	 	(D)	 	paragraph 10 (Mitigation)
	 
	 	(E)	 	paragraph 11 (No duplication of recovery)

For the avoidance of doubt, all other provisions contained in schedule 4 do not apply to an
Indemnity Claim.

	8.4	 	No disclosures
	 
	 	 	For the avoidance of doubt, an Indemnity Claim is not subject to any disclosures contained
in the Disclosure Letter, and Indemnity Claims exist irrespective of any facts or matters
being known to the Purchaser.
	 
	8.5	 	Reduction in Consideration
	 
	 	 	Any sum payable by the Vendor in respect of an Indemnity Claim (including by way of set-off)
shall be treated as a reduction in the Initial Consideration.
	 
	9.	 	Post Completion Obligations
	 
	9.1	 	Books and Records
	 
	 	 	The Purchaser shall procure that:

	 	(A)	 	the Company and the Subsidiaries shall preserve until the seventh anniversary
of Completion all books, records and documents of the Company and the Subsidiaries
relating to taxation or claims under the Warranties or the Tax Deed which are at
Completion in the possession under the control of each of them or insofar as the same
record matters occurring on or before Completion; and
	 
	 	(B)	 	until the seventh anniversary of Completion (or in the event of any claim being
made by the Purchaser under the Warranties or the Tax Deed until such later time as the
same is determined) the Vendor and its agents, accountants, solicitors and other
professional advisers shall be allowed the right to inspect and, at the Vendor’s
expense, take copies of the books, records and documents referred to in clause 9.1(A))
(but only in relation to matters recorded therein which occurred on or before
Completion) at all reasonable times upon the Vendor giving reasonable notice of such
requirement to the Company or the relevant Subsidiary.

	10.	 	Parent Guarantors
	 
	10.1	 	Vendor Guarantor

	 	(A)	 	The Vendor Guarantor irrevocably and unconditionally guarantees to the
Purchaser the due and punctual performance of all the obligations of the Vendor
contained in this Agreement and the Transaction Documents and shall pay to the
Purchaser from time to time on demand any sum of money which the Vendor shall at any
time be liable to pay to the Purchaser under or pursuant to this Agreement and the
Transaction Documents and which has not been paid at the time the demand is made. The
obligations of the Vendor Guarantor in this clause

14

 

	 	 	 	10.1(A) are primary obligations and not a mere surety and shall not be affected by
any of the obligations of Vendor being void, voidable or unenforceable for any reason
and in such event the Vendor Guarantor shall perform the obligations of the Vendor as
if it were primarily liable for the performance.
	 
	 	(B)	 	The obligations of the Vendor Guarantor pursuant to clause 10.1(A) shall be
continuing obligations and shall not be satisfied, discharged or affected by any
intermediate payment or settlement of account or any change in the constitution or
control of, or the insolvency of, or any bankruptcy, winding up or analogous
proceedings relating to, the Vendor.
	 
	 	(C)	 	The liability of the Vendor Guarantor pursuant to clause 10.1(A) shall not be
affected by any arrangement which the Purchaser may make with the Vendor or with any
other person which (but for this clause 10.1(C)) might operate to diminish or discharge
the liability of or otherwise provide a defence to a surety. Without prejudice to the
generality of the foregoing, the Purchaser is to be at liberty at any time and without
reference to the Vendor Guarantor to grant any time for payment or grant any other
indulgence or agree to any amendment, variation, waiver or release in respect of any of
the obligations of the Vendor under this Agreement or the Transaction Documents and to
give up, deal with, vary, exchange or abstain from perfecting or enforcing any other
securities or guarantees held by the Purchaser at any time and to discharge any party
to such securities or guarantees and to realise such securities or guarantees or any of
them, as the Purchaser thinks fit, and to compound with, accept compositions from and
make any other arrangements with the Vendor or any person or persons liable on other
securities or guarantees held or to be held by the Purchaser without affecting the
liability of the Vendor Guarantor under clause 10.1(A).
	 
	 	(D)	 	So long as the Vendor remains under any actual or contingent obligation under
this Agreement or the Transaction Documents the Vendor Guarantor shall not exercise any
rights which it may at any time have by reason of the performance of its obligations
under clause 10.1(A) to be indemnified by the Vendor, to claim any contribution from
any other surety of the obligations of the Vendor or to take the benefit (in whole or
in part and whether by way of subrogation or otherwise) of any of the rights of the
Purchaser under this Agreement or the Transaction Documents or of any other security
taken by the Purchaser pursuant to or in connection with this Agreement or the
Transaction Documents.
	 
	 	(E)	 	The liability of the Vendor Guarantor pursuant to clause 10.1(A) shall not be
affected by the avoidance of any assurance, security or payment or any release,
settlement or discharge which may have been given or made on the faith of any
assurance, security or payment, in either case, under any enactment relating to
bankruptcy or insolvency.

	10.2	 	Purchaser Guarantor

	 	(A)	 	The Purchaser Guarantor irrevocably and unconditionally guarantees to the
Vendor the due and punctual performance of all the obligations of the Purchaser
contained in this Agreement and the Purchaser Documents and shall pay to the Vendor
from time to time on demand any sum of money which the Purchaser shall at any time be
liable to pay to the Vendor under or pursuant to this Agreement and the Purchaser
Documents and which has not been paid at the time the demand is made. The obligations
of the Purchaser Guarantor in this clause 10.2(A) are primary obligations and not a
mere surety and shall not be affected by any of the obligations of Purchaser being
void, voidable or unenforceable for any reason and in such event the Purchaser
Guarantor shall perform the obligations of the Purchaser as if it were primarily liable
for the performance.
	 
	 	(B)	 	The obligations of the Purchaser Guarantor pursuant to clause 10.2(A) shall be
continuing obligations and shall not be satisfied, discharged or affected by any
intermediate payment or settlement of account or any change in the constitution or
control of, or the insolvency of, or any bankruptcy, winding up or analogous
proceedings relating to, the Purchaser.

15

 

	 	(C)	 	The liability of the Purchaser Guarantor pursuant to clause 10.2(A) shall not
be affected by any arrangement which the Purchaser may make with the Vendor or with any
other person which (but for this clause 10.2(C)) might operate to diminish or discharge
the liability of or otherwise provide a defence to a surety. Without prejudice to the
generality of the foregoing, the Vendor is to be at liberty at any time and without
reference to the Purchaser Guarantor to grant any time for payment or grant any other
indulgence or agree to any amendment, variation, waiver or release in respect of any of
the obligations of the Purchaser under this Agreement or the Purchaser Documents and to
give up, deal with, vary, exchange or abstain from perfecting or enforcing any other
securities or guarantees held by the Vendor at any time and to discharge any party to
such securities or guarantees and to realise such securities or guarantees or any of
them, as the Vendor thinks fit, and to compound with, accept compositions from and make
any other arrangements with the Purchaser or any person or persons liable on other
securities or guarantees held or to be held by the Vendor without affecting the
liability of the Purchaser Guarantor under clause 10.2(A).
	 
	 	(D)	 	So long as the Purchaser remains under any actual or contingent obligation
under this Agreement or the Purchaser Documents the Purchaser Guarantor shall not
exercise any rights which it may at any time have by reason of the performance of its
obligations under clause 10.2(A) to be indemnified by the Purchaser, to claim any
contribution from any other surety of the obligations of the Purchaser or to take the
benefit (in whole or in part and whether by way of subrogation or otherwise) of any of
the rights of the Vendor under this Agreement or the Purchaser Documents or of any
other security taken by the Vendor pursuant to or in connection with this Agreement or
the Purchaser Documents.
	 
	 	(E)	 	The liability of the Purchaser Guarantor pursuant to clause 10.2(A) shall not
be affected by the avoidance of any assurance, security or payment or any release,
settlement or discharge which may have been given or made on the faith of any
assurance, security or payment, in either case, under any enactment relating to
bankruptcy or insolvency.

	11.	 	Confidentiality
	 
	11.1	 	Confidentiality
	 
	 	 	Subject to clause 11.2 and to clause 12, each party shall treat as strictly confidential:

	 	(A)	 	the provisions of this Agreement and the process of their negotiation;
	 
	 	(B)	 	in relation to the obligations of the Vendor under this clause 11, any
information received or held by the Vendor or any of its Representatives where such
information relates to the Purchaser Group or, following Completion, any Group Company;
	 
	 	(C)	 	in relation to the obligations of the Purchaser under this clause 11 any
information received or held by the Purchaser or any of its Representatives where such
information relates to the Vendor Group or, prior to Completion, any Group Company,

together (“Confidential Information”).

Each party shall not, except with the prior written consent of the other party (which shall
not be unreasonably withheld or delayed), make use of (save for the purposes of performing
its obligations under this Agreement) or disclose to any person any Confidential
Information.

	11.2	 	Permitted disclosure or use
	 
	 	 	Clause 11.1 shall not apply if and to the extent that the party using or disclosing
Confidential Information can demonstrate that:

16

 

	 	(A)	 	such disclosure is required by Law or regulation or by any stock exchange or
any supervisory, regulatory, governmental or anti-trust body (including, for the
avoidance of doubt, any tax authority) having applicable jurisdiction; or
	 
	 	(B)	 	such disclosure is required in order to facilitate any assignment or proposed
assignment of the whole or any part of the rights or benefits under this Agreement
which is permitted by clause 20; or
	 
	 	(C)	 	the Confidential Information concerned was lawfully in its possession or the
possession of any of its Representatives (as evidenced by written records) and not
subject to any obligation of secrecy on its part prior to its being received or held as
set out in clause 11.1 (other than information held by the Vendor or its
Representatives regarding the Group Companies which is expressly excluded from the
scope of this sub-paragraph); or
	 
	 	(D)	 	the Confidential Information concerned has come into the public domain other
than through its fault (or that of its Representatives) or the fault of any person to
whom such Confidential Information has been disclosed in accordance with this clause
11.2.

	11.3	 	Disclosure to Representatives
	 
	 	 	Each of the Vendor and the Purchaser undertakes that it shall (and shall procure that its
Affiliates shall) only disclose Confidential Information to Representatives where it is
reasonably required for the purposes of exercising its rights or performing its obligations
under this Agreement or the other Transaction Documents and only where the Representatives
are informed of the confidential nature of the Confidential Information and the provisions
of this clause 11.
	 
	11.4	 	Continuance of restrictions
	 
	 	 	The restrictions contained in this clause 11 shall survive termination and/or Completion and
shall continue for a period of five years from the Completion Date.
	 
	12.	 	Announcements
	 
	12.1	 	Restrictions
	 
	 	 	Subject to clauses 12.2 and 12.4, and whether or not any restriction contained in clause 11
applies, no party to this Agreement shall make any announcement, (including any
communication to the public, to any customers or suppliers of any Group Company, or to all
or any of the employees of any Group Company) concerning the provisions or subject matter of
this Agreement or containing any information about any other party without the prior written
approval of the other (which shall not be unreasonably withheld or delayed).
	 
	12.2	 	Permitted announcements
	 
	 	 	Clause 12.1 shall not apply if, and to the extent that, an announcement is required by Law
or regulation or by any stock exchange or any supervisory, regulatory, governmental or
anti-trust body (including, for the avoidance of doubt, any tax authority) having applicable
jurisdiction and whether or not the requirement and provided that any such announcement
shall wherever possible be made only after consultation with the other parties.
	 
	12.3	 	Continuance of restrictions
	 
	 	 	The restrictions contained in this clause 12 shall survive Completion and shall continue for
a period of 30 days from the Completion Date.

17

 

	12.4	 	Announcements to customers and suppliers
	 
	 	 	As soon as practicable after Completion the Vendor and the Purchaser shall procure that a
joint announcement of the sale and purchase of the Shares is made to the customers and
suppliers of the Company and each Subsidiary in such form as they may agree.
	 
	13.	 	Further assurance
	 
	 	 	The parties hereto shall (and shall procure that their respective Affiliates shall), at
their own cost, do, execute and perform all such further deeds, documents, assurances, acts
and things as may be reasonably required to give effect to the terms of this Agreement and
to secure for the Purchaser or the Vendor (as the case may be) the full benefit of the
rights, powers and remedies conferred upon them in this Agreement.
	 
	14.	 	Entire agreement
	 
	14.1	 	This Agreement and the other Transaction Documents together set out the entire agreement
between the parties relating to the sale and purchase of the Shares and, save to the extent
expressly set out in this Agreement or any of the Transaction Documents, supersedes and
extinguishes any prior drafts, agreements, undertakings, representations, warranties,
promises, assurances and arrangements of any nature whatsoever, whether or not in writing,
relating thereto.
	 
	14.2	 	It is agreed that save to the extent expressly set out in this Agreement:

	 	(A)	 	neither party has entered into this Agreement or any other Transaction Document
in reliance upon, nor shall either party have any claim or remedy in respect of, any
statement, representation, warranty, undertaking, assurance, collateral contract or
other provision made by or on behalf of the other party which is not, expressly set out
in this Agreement or any other Transaction Document;
	 
	 	(B)	 	the only right or remedy of a party in relation to any statement,
representation, warranty, undertaking, assurance, collateral contract or other
provision set out in this Agreement or any other Transaction Document shall be for
breach of this Agreement or the relevant Transaction Document to the exclusion of all
other rights and remedies;
	 
	 	(C)	 	except for any liability which a party has under or in respect of any breach of
this Agreement or any of the other Transaction Documents neither party shall owe any
duty of care or have any liability in tort or otherwise to the other party in respect
of, arising out of, or in any way relating to the sale and purchase of the Shares.

	14.3	 	Nothing in this clause 14 shall exclude any liability for (or remedy in respect of)
fraudulent misrepresentation.
	 
	15.	 	Post Completion effect of Agreement
	 
	 	 	This Agreement shall, as regards the Warranties and any other of its provisions remaining to
be performed or capable of having or taking effect following the Completion Date, remain in
full force and effect following the Completion Date.
	 
	16.	 	Waiver and variation
	 
	16.1	 	No delay or omission by any party hereto at any time to require performance of any provision
of this Agreement shall not affect its right to enforce such provision at a later time. No
waiver by any party hereto of any condition or the breach of any term, covenant,
representation or warranty contained in this Agreement whether by conduct or otherwise in any
one or more instances shall be deemed to be, or construed as, a further or continuing waiver
of any such condition or breach or a waiver of any
other condition or be deemed to be or construed as the breach or a waiver, of any other
term, covenant, representation or warranty contained in this Agreement.

18

 

	16.2	 	No amendment, variation or waiver of this Agreement shall be valid unless it is in writing
and duly executed by or on behalf of all of the parties to this Agreement for the time being.
	 
	16.3	 	Unless expressly agreed, no variation shall constitute a general waiver of any provision of
this Agreement, nor shall it affect any rights or obligations under or pursuant to this
Agreement which have already accrued up to the date of variation and the rights and
obligations under or pursuant to this Agreement shall remain in full force and effect except
and only to the extent that they are varied.
	 
	17.	 	Remedies
	 
	 	 	So far as permitted by Law and except in the case of fraud, each party agrees and
acknowledges that its only right and remedy in relation to any representation, warranty or
undertaking made or given in connection with this agreement shall be for breach of the terms
of this agreement to the exclusion of all other rights and remedies (including those in tort
or arising under statute).
	 
	18.	 	Invalidity
	 
	 	 	Where any provision of this Agreement is or becomes illegal, invalid or unenforceable in any
respect under the laws of any jurisdiction then such provision shall be deemed to be severed
from this Agreement and, if possible, replaced with a lawful provision which, as closely as
possible, gives effect to the intention of the parties under this Agreement and, where
permissible, that shall not affect or impair the legality, validity or enforceability in
that, or any other, jurisdiction of any other provision of this Agreement.
	 
	19.	 	Time of the essence
	 
	 	 	Except as otherwise stated in this Agreement, time is of the essence of each provision of
this Agreement.
	 
	20.	 	Assignment
	 
	 	 	This Agreement is personal to the parties to it. Accordingly, no party shall be entitled to
assign, hold on trust or otherwise transfer the benefit of any provisions of this Agreement
or any benefit arising under or out of this Agreement without the prior written consent of
the other party.
	 
	21.	 	Counterparts
	 
	 	 	This Agreement may be executed in any number of counterparts but shall not be effective
until each party has executed at least the counterpart. Each counterpart shall constitute
an original of this Agreement but all the counterparts together shall constitute but one and
the same instrument.
	 
	22.	 	Interest
	 
	 	 	Where the Vendor or the Purchaser default in the payment when due of any damages or other
sum payable by virtue of this Agreement any other Transaction Documents the liability of the
Vendor or the Purchaser (as the case may be) shall be increased to include interest on such
sum from the date when payment is due to the date of actual payment (both before and after
judgment) at that annual rate which is 3% above the base rate of Royal Bank of Scotland PLC
from time to time in effect during such period. Such interest shall accrue from day to day
and shall be payable without prejudice to any other remedy available to the Vendor or the
Purchaser (as the case may be) in respect of such default.

19

 

	23.	 	Notices
	 
	23.1	 	Any notice (which term shall include any other communication) required to be given under this
Agreement or in connection with the matters contemplated herein shall, except where otherwise
specifically provided, be in writing, in the English language.
	 
	23.2	 	Any such notice or other communication shall be addressed as provided in clause 23.3 and may
be:

	 	(A)	 	personally delivered in which case it shall be deemed to have been given upon
delivery of the relevant address; or
	 
	 	(B)	 	if within the United Kingdom, sent by first class pre-paid post, in which case
it shall be deemed to have been given two Business Days after the date of posting;
	 
	 	(C)	 	if from or to any place outside the United Kingdom, sent by air courier, in
which case it shall be deemed to have been given two Business Days after its delivery
to a representative of the courier;
	 
	 	(D)	 	if from or to any place outside the United Kingdom, sent by pre-paid airmail,
in which case it shall be deemed to have been given five Business Days after the date
of posting; or
	 
	 	(E)	 	sent by facsimile (with a copy by post), in which case it shall be deemed to
have been given when despatched subject to confirmation of uninterrupted transmission
by a transmission report

Provided that in the case of clause 23.2(E) any notice despatched after 17:00 hours (at the
place where such notice is to be received) on any day shall be deemed to have been received
at 09:00 hours on the next Business Day.

	23.3	 	Notices under this Agreement shall be sent to a party at its address subject to clause 23.4 below:

	 	 	 	 	 
	 

	 	For the Vendor:	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	UIS Industries Limited
	 

	 	For the attention of:
	 	Keith Zar
	 

	 	Address:
	 	14601 Highway 41 North, Evansville, IN 47725, USA
	 

	 	Fax Number:
	 	+1 812 867 4157
	 
	 	 	 	 
	 

	 	For the Vendor Guarantor:	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	United Components, Inc.
	 

	 	For the attention of:
	 	Keith Zar
	 

	 	Address:
	 	14601 Highway 41 North, Evansville, IN 47725, USA
	 

	 	Fax Number:
	 	+1 812 867 4157
	 
	 	 	 	 
	 

	 	For the Purchaser:	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Truck-Lite Co. Limited
	 

	 	For the attention of:
	 	Brian Kupchella
	 

	 	Address:
	 	Waterfall Lane, Cradley Heath, West Midlands B64 6QB
	 

	 	Fax Number:
	 	+44 (0)121 561 7001

20

 

	 	 	 	 	 
	 

	 	with a copy to:	 	 
	 
	 

	 	Name:
	 	Penske Corporation
	 

	 	For the attention of:
	 	Pat Conroy
	 

	 	Address:
	 	2555 Telegraph Road, Bloomfield Hills, MI 48302, USA
	 

	 	Fax Number:
	 	+1 248 648 2005
	 
	 	 	 	 
	 

	 	and with a further copy to:	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Pinsent Masons
	 

	 	For the attention of:
	 	Jay Birch
	 

	 	Address:
	 	City Point, 1 Ropemaker Street, London EC2Y 9AH
	 

	 	Fax Number:
	 	+44 (0) 20 7418 7050
	 
	 	 	 	 
	 

	 	For the Purchaser Guarantor:	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Truck-Lite Co., Inc.
	 

	 	For the attention of:
	 	Brian Kupchella
	 

	 	Address:
	 	c/o Truck-Lite Co. Limited, Waterfall Lane, Cradley Heath, West Midlands B64 6QB
	 

	 	Fax Number:
	 	+1 248 648 2005
	 
	 	 	 	 
	 

	 	with a copy to:	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Pinsent Masons
	 

	 	For the attention of:
	 	Jay Birch
	 

	 	Address:
	 	City Point, 1 Ropemaker Street, London EC2Y 9AH
	 

	 	Fax Number:
	 	+44 (0) 20 7418 7050

	23.4	 	Any party to this Agreement may notify the other parties of any change to its address or
other details specified in clause 23.3 provided that such notification shall only be effective
on the date specified in such notice or five Business Days after the notice is given,
whichever is later.
	 
	24.	 	Costs
	 
	 	 	Except as otherwise stated in this Agreement, each party shall bear their own costs arising
out of or in connection with the preparation, negotiation and implementation of this
Agreement and all other Transaction Documents.
	 
	25.	 	Governing law and jurisdiction
	 
	25.1	 	This Agreement shall be governed by, and construed in accordance with, English Law.
	 
	25.2	 	In relation to any legal action or proceedings to enforce this Agreement or arising out of or
in connection with this Agreement (“Proceedings”) each of the parties irrevocably submits to
the exclusive jurisdiction of the English courts and waives any objection to Proceedings in
such courts on the grounds of venue or on the grounds that the Proceedings have been brought
in an inappropriate forum.
	 
	26.	 	Contracts (Rights Of Third Parties) Act 1999 
	 
	 	 	Save as otherwise provided, no person who is not a party to this Agreement shall have any
right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
Agreement.
	 
	27.	 	Process agents
	 
	26.1	 	Process agent of Vendor Guarantor

21

 

	 	 	The Vendor Guarantor irrevocably appoints the Vendor as its process agent to receive on its
behalf service of process in any Proceedings in England, service upon whom shall be good
service upon the Vendor Guarantor whether or not forwarded to or received by the Vendor
Guarantor. Where, for any reason the process agent ceases to be able to act as process
agent, or no longer has an address in England, the Vendor Guarantor irrevocably agrees to
appoint a substitute process agent with an address in England acceptable to the Purchaser
and to deliver to the Purchaser a copy of the substitute process agent’s acceptance of that
appointment within 20 Business Days. In the event that the Vendor Guarantor fails to
appoint a substitute process agent, it shall be effective service for the Purchaser to serve
the process upon the last known address in England of the last known process agent for the
Vendor Guarantor notified to the Purchaser, notwithstanding that such process agent is no
longer found at such address or has ceased to act.
	 
	26.1	 	Process agent of Purchaser Guarantor
	 
	 	 	The Purchaser Guarantor irrevocably appoints the Purchaser as its process agent to receive
on its behalf service of process in any Proceedings in England, service upon whom shall be
good service upon the Purchaser Guarantor whether or not forwarded to or received by the
Purchaser Guarantor. Where, for any reason the process agent ceases to be able to act as
process agent, or no longer has an address in England, the Purchaser Guarantor irrevocably
agrees to appoint a substitute process agent with an address in England acceptable to the
Vendor and to deliver to the Vendor a copy of the substitute process agent’s acceptance of
that appointment within 20 Business Days. In the event that the Purchaser Guarantor fails
to appoint a substitute process agent, it shall be effective service for the Vendor to serve
the process upon the last known address in England of the last known process agent for the
Purchaser Guarantor notified to the Vendor, notwithstanding that such process agent is no
longer found at such address or has ceased to act.
	 
	 	 	IN WITNESS whereof this Agreement has been duly executed as a deed on the date written
above.

22

 

SCHEDULE 1: PARTICULARS OF GROUP COMPANIES

PART 1: DETAILS OF THE COMPANY

	 	 	 
	Company Name
	 	Flexible Lamps Limited
	 
	 	 
	Registered Number
	 	195431
	 
	 	 
	Registered Office
	 	Barrows Road, Harlow, Essex CM19 5FA
	 
	 	 
	Date and Place of Incorporation
	 	England and Wales, 31 January 1924
	 
	 	 
	Directors
	 	Bruce Zorich, Charles Dickson, Dennis Cunning and Lynne Baker
	 
	 	 
	Secretary
	 	Philip Halliwell
	 
	 	 
	Authorised Share Capital
	 	2,415,000 ordinary shares of £0.50 each
	 
	 	 
	Issued Share Capital
	 	2,415,000 ordinary shares of £0.50 each
	 
	 	 
	Shareholders and Shares Held
	 	UIS Industries Limited, 2,415,000 shares
	 
	 	 
	Accounting Reference Date
	 	31 December
	 
	 	 
	Auditors
	 	Grant Thornton UK LLP
	 
	 	 
	Tax Residence
	 	United Kingdom
	 
	 	 
	Subsidiaries
	 	Rubbolite Industries Limited, T.H Quinton Limited, G.Weil Limited, Flexible Lamps EURL and Flexible Lamps (WUXI) CV Parts Co Ltd

PART 2: DETAILS OF THE SUBSIDIARIES

	 	 	 
	Company Name
	 	Rubbolite Industries Limited
	 
	 	 
	Registered Number
	 	249823
	 
	 	 
	Registered Office
	 	Barrows Road, Harlow, Essex CM19 5FA
	 
	 	 
	Date and Place of
Incorporation
	 	England and Wales, 30 July 1930
	 
	 	 
	Directors
	 	Bruce Zorich, Charles Dickson, Dennis Cunning
	 
	 	 
	Secretary
	 	Philip Halliwell
	 
	 	 
	Authorised Share Capital
	 	20,000 ordinary shares of £1 each
	 
	 	 
	Issued Share Capital
	 	20,000 ordinary shares of £1 each
	 
	 	 
	Shareholders and Shares Held
	 	Flexible Lamps Limited, 20,0000 ordinary shares
	 
	 	 
	Accounting Reference Date
	 	31 December

23

 

	 	 	 
	Auditors
	 	Grant Thornton LLP
	 
	 	 
	Tax Residence
	 	United Kingdom
	 
	 	 
	Subsidiaries
	 	None
	 
	 	 
	Company Name
	 	T.H.Quinton Limited
	 
	 	 
	Registered Number
	 	546440
	 
	 	 
	Registered Office
	 	Barrows Road, Harlow, Essex CM19 5FA
	 
	 	 
	Date and Place of
Incorporation
	 	England and Wales, 24 March 1955
	 
	 	 
	Directors
	 	Bruce Zorich, Charles Dickson, Dennis Cunning
	 
	 	 
	Secretary
	 	Philip Halliwell
	 
	 	 
	Authorised Share Capital
	 	5,000 ordinary shares of £1 each
	 
	 	 
	 
	 	5,000 3% non-cumulative preference shares
	 
	 	 
	Issued Share Capital
	 	5,000 ordinary shares of £1 each
	 
	 	 
	 
	 	5,000 3% non-cumulative preference shares
	 
	 	 
	Shareholders and Shares Held
	 	Flexible Lamps Limited, 5,000 ordinary shares of £1 each, 5,000 £1 3% non-cumulative preference shares
	 
	 	 
	Accounting Reference Date
	 	31 December
	 
	 	 
	Auditors
	 	Grant Thornton LLP
	 
	 	 
	Tax Residence
	 	United Kingdom
	 
	 	 
	Subsidiaries
	 	None
	 
	 	 
	Company Name
	 	G. Weil Limited
	 
	 	 
	Registered Number
	 	1462132
	 
	 	 
	Registered Office
	 	Barrows Road, Harlow, Essex CM19 5FA
	 
	 	 
	Date and Place of
Incorporation
	 	England and Wales, 20 November 1979
	 
	 	 
	Directors
	 	Bruce Zorich, Charles Dickson, Dennis Cunning
	 
	 	 
	Secretary
	 	Philip Halliwell
	 
	 	 
	Authorised Share Capital
	 	100 ordinary shares of £1 each
	 
	 	 
	Issued Share Capital
	 	100 ordinary shares of £1 each

24

 

	 	 	 
	Shareholders and Shares Held
	 	Flexible Lamps Limited, 100 ordinary shares of £1 each
	 
	 	 
	Accounting Reference Date
	 	31 December
	 
	 	 
	Auditors
	 	Grant Thornton LLP
	 
	 	 
	Tax Residence
	 	United Kingdom
	 
	 	 
	Subsidiaries
	 	None
	 
	 	 
	Company Name
	 	Flexible Lamps France EURL
	 
	 	 
	Registered Number
	 	382 920 031 RCS Evry
	 
	 	 
	Registered Office
	 	3 Rue Eugenie Cordeau, 91140 Villebon Sur Yvette, France
	 
	 	 
	Date and Place of
Incorporation
	 	30 August 1991, France
	 
	 	 
	Directors
	 	Dennis Cunning
	 
	 	 
	Secretary
	 	NA
	 
	 	 
	Authorised Share Capital
	 	€70,000
	 
	 	 
	Issued Share Capital
	 	700 ordinary shares of €100 each
	 
	 	 
	Shareholders and Shares Held
	 	Flexible Lamps limited, 700 shares of €100 each
	 
	 	 
	Accounting Reference Date
	 	31 December
	 
	 	 
	Auditors
	 	NA
	 
	 	 
	Tax Residence
	 	France
	 
	 	 
	Subsidiaries
	 	None
	 
	 	 
	Company Name
	 	Flexible Lamps (WUXI) CV Parts Co Ltd
	 
	 	 
	Registered Number
	 	Qi Du SuXi Zong Fu Zi, No. 008038
	 
	 	 
	Registered Office
	 	Unit 11, Xiangnan Road, Shuofang Town, New District, Wuxi, PRC
	 
	 	 
	Date and Place of
Incorporation
	 	17 July 2006, PRC
	 
	 	 
	Directors
	 	Dennis Cunning, Lynne Baker, Philip Halliwell
	 
	 	 
	Secretary
	 	N.A.
	 
	 	 
	Registered Capital
	 	USD500,000
	 
	 	 
	Paid-in Capital
	 	USD 329,000

25

 

	 	 	 
	Shareholders and Shares Held
	 	Flexible Lamps Limited
	 
	 	 
	Accounting Reference Date
	 	31 December
	 
	 	 
	Auditors
	 	WUXI Dazhong Certified Public Accountants Co. Ltd
	 
	 	 
	Tax Residence
	 	China
	 
	 	 
	Subsidiaries
	 	None

26

 

SCHEDULE 2: COMPLETION ARRANGEMENTS

	1.	 	Vendor’s obligations
	 
	1.1	 	At Completion the Vendor shall deliver to the Purchaser:

	 	(A)	 	transfers of the Shares duly executed by the registered holders thereof in
favour of the Purchaser or its nominees together with the relevant share certificates
(or an express indemnity in a form satisfactory to the Purchaser in the case of any
missing certificate);
	 
	 	(B)	 	such waivers or consents as the Purchaser may require to enable the Purchaser
or its nominees to be registered as holders of the Shares;
	 
	 	(C)	 	letters of resignation in Agreed Form duly executed by each Director, other
than the Continuing Directors, in respect of their directorships of each Group Company
as set out in schedule 1;
	 
	 	(D)	 	a certified copy of a board resolution of the Vendor approving the execution
and entering into by the Vendor of the Transaction Documents.

	1.2	 	At Completion, and to the extent they are not already held by or to the order of the Company,
the Vendor shall deliver to the Purchaser as agent for the Company and the Subsidiaries:

	 	(A)	 	all the statutory and other books (duly written up to date) of the Company and
each of the Subsidiaries;
	 
	 	(B)	 	certificates in respect of all issued shares in the capital of each of the
Subsidiaries and transfers of all shares in any Subsidiary not registered in the name
of the Company or another Subsidiary in favour of such persons as the Purchaser shall
direct; and
	 
	 	(C)	 	the title deeds to the Premises other than in respect to those Premises which
are disclosed in the Disclosure Letter as being charged and the title deeds as being
held by the chargee.

	1.3	 	At Completion the Vendor shall procure that the Tax Deed and the Disclosure Letter is
executed and delivered to the Purchaser by the Vendor.

	1.4	 	At Completion the Vendor shall deliver to the Purchaser minutes of board meetings of the
Company and of each of the Subsidiaries, to:

	 	(A)	 	pass a resolution to approve, in the case of the Company, the transfers of the
Shares and, and (subject only to due stamping) to register, in the register of members,
each transferee as the holder of the shares concerned;
	 
	 	(B)	 	appoint as directors and/or secretary such persons as the Purchaser may
nominate, such appointments to take effect at the close of the meeting;
	 
	 	(C)	 	tender and accept the resignations and acknowledgements of the directors,
company secretary and auditors referred to in paragraph 1.1 each such acceptance to
take effect at the close of the meeting; and
	 
	 	(D)	 	give authority in favour of persons nominated by the Purchaser to operate bank
accounts of each Group Company.

	1.5	 	At Completion the Vendor shall procure the discharge of all guarantees and similar
obligations or undertakings given by the Company or any of the Subsidiaries in respect of the
obligations of any other person (and including the guarantees and obligations stipulated to be
discharged at Completion in the Disclosure Letter), such discharge to be given in Agreed Form.

27

 

	2.	 	Purchaser’s obligations
	 
	2.1	 	At Completion the Purchaser shall pay the Initial Consideration for the Shares as provided in
clause 3 of this Agreement by electronic transfer of funds to credit, for same day value, the
following account:

	 	 	 	 	 	 	 	 	 
	 
	 	Bank	 	Royal Bank of Scotland	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Account Name	 	Latham & Watkins - Client account	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Account number	 	20933502	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Sort Code	 	15-10-00	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Swift/BIC Code	 	RBOS GB 2L	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	IBAN No	 	GB55 RBOS 1510 0020 9335 02	 	 	 	 

	2.2	 	At Completion the Purchaser shall deliver to the Vendor:

	 	(A)	 	a counterpart of the Tax Deed and Disclosure Letter duly executed by the
Purchaser; and
	 
	 	(B)	 	a certified copy of a board resolution of the Purchaser approving the execution
and entering into by the Purchaser of this Agreement, the Tax Deed and the transactions
contemplated therein.

28

 

SCHEDULE 3: WARRANTIES

	1.	 	Shares in the Company and the Subsidiaries
	 
	1.1	 	The Company does not have any subsidiary undertakings other than the Subsidiaries. Listed in
part 2 of schedule 1 are all the Subsidiaries of the Company at the date of this Agreement and
the details therein contain the particulars of their allotted and issued share capital.
	 
	1.2	 	The Company is the sole legal and beneficial owner of the whole allotted and issued share
capital of each of the Subsidiaries and all such shares are fully paid up.
	 
	1.3	 	The Shares and the issued shares of the Subsidiaries are free from all Encumbrances.
	 
	1.4	 	No right has been granted to any person to require the Group to issue any share capital.
	 
	2.	 	Constitutional and corporate documents 
	 
	 	 	The copies of the memorandum and articles of association or other constitutional and
corporate documents of the all Group Companies which have been Disclosed to the Purchaser
are accurate true and complete in all material respects.
	 
	3.	 	Accounts
	 
	3.1	 	The Audited Accounts:

	 	(A)	 	have been prepared in accordance with GAAP and comply with the Companies Act
1985, as amended and with accounting standards, policies, principles and practices
generally accepted in the UK;
	 
	 	(B)	 	show a true and fair view of the assets, liabilities, financial position and
state of affairs of each member of the Group as at the Balance Sheet Date and of the
profits or losses of each member of the Group for the financial year ended on the
Balance Sheet Date;
	 
	 	(C)	 	have been audited in accordance with the provisions of the Companies Act 1985,
as amended;
	 
	 	(D)	 	include full provision or reserve as required by GAAP for all Tax (and for any
contingent or deferred liability to Tax) which has been or may be assessed or for which
any Group Company may become accountable in respect of any act, omission, or event
(whether of any Group Company or any other person) up to and including the Balance
Sheet Date;
	 
	 	(E)	 	include specific identification as required by GAAP of all material
non-recurring items of expenditure or income, transactions of an unusual nature or
entered into otherwise than on normal commercial terms and any other factors rendering
any Group Company profit or loss for all or any part of such periods unusually high or
low; and
	 
	 	(F)	 	have been prepared on a consistent basis and using consistent accounting
practice for the previous three financial years ended on the Balance Sheet Date.

	3.2	 	The Management Accounts have been prepared on a consistent basis with the Audited Accounts
and reasonably reflect:

	 	(A)	 	the state of affairs of the Group and its assets and liabilities as at the date
to which they were prepared;
	 
	 	(B)	 	the Group’s results for the period to which they relate taking into account the
purpose for which they were prepared;

29

 

	 	(C)	 	any material non-recurring items of expenditure or income, transactions of an
unusual nature or entered into otherwise than on normal commercial terms and any other
factors rendering any Group Company profit or loss for all or any part of such periods
unusually high or low.

	3.3	 	The Disclosure Letter contains full details of:

	 	(A)	 	all bank accounts, borrowing facilities, letter of credit issuance facilities,
safe custody and deposit facilities of each Group Company including the credit or debit
balances of each Group Company’s bank accounts on such date as is within the period of
5 Business Days prior to Completion (other than in respect of Flexible Lamps France
EURL which shall be in the period of 15 Business Days prior to Completion);
	 
	 	(B)	 	any notice of repayment of borrowings which are outstanding as at Completion;
	 
	 	(C)	 	all guarantees or support or indemnity of, or any security provided by, a third
party to a Group Company; and
	 
	 	(D)	 	all mortgages, charges or pledges granted by any Group Company.

	3.4	 	No Group Company has created, or agreed to create, any Encumbrance or given, or agreed to
give, any guarantee, suretyship, indemnity or similar obligation or any agreement for the
postponement of its debt.
	 
	4.	 	Events since the Balance Sheet Date
	 
	4.1	 	Since the Balance Sheet Date:

	 	(A)	 	the business of the Group has been carried on in the ordinary and usual course
and substantially in the same manner (including nature and scope) as in the financial
year ended on the Balance Sheet Date and so as to maintain the business as a going
concern and there has been no material deterioration in the financial position or
turnover of the Group;
	 
	 	(B)	 	no share or loan capital or limited partnership interests of any Group Company
have been issued, redeemed, purchased or repaid;
	 
	 	(C)	 	no material asset has been acquired or disposed of by the Group, and the Group
has not agreed to acquire or dispose of a material asset, in each case, otherwise than
in the ordinary course of carrying on its business and on entirely arm’s length terms
and the Group has not assumed or incurred or agreed to assume or incur any actual or
contingent liability which is material otherwise than in the ordinary course of
carrying on its business;
	 
	 	(D)	 	there has been no declaration or payment of any dividends or other
distributions by any Group Company;
	 
	 	(E)	 	no Group Company has borrowed or raised any money or taken any form of
financial security or entered into, or agreed to enter into, any capital commitment
which is wholly or partially outstanding in excess of £20,000 and no Group Company has
acquired, invested, disposed of or realised (or agreed to acquire, invest, dispose of
or realise) any capital assets in excess of £20,000;
	 
	 	(F)	 	no management, consultancy or like charges have been incurred or agreed to by
any Group Company in favour of any member of the Vendor Group; and
	 
	 	(G)	 	no Group Company’s business has been adversely affected by the loss (whether
before or after the Balance Sheet Date) of any contract or customer or supplier or by
any other factor not affecting similar businesses to a like extent and there are no
circumstances currently in effect which are likely to give rise to any such effect on a
Group Company’s business.

30

 

	5.	 	Tax
	 
	5.1	 	All returns, notifications, computations and payments which should have been made or given by
a Group Company in respect of Tax were made or given within the requisite periods and were
made up to date, correct and on a proper basis and none of them is, nor to the best of the
Vendors’ knowledge is likely to be, the subject of a dispute with HM Revenue & Customs or any
equivalent Tax authority, in either case for a material amount.
	 
	5.2	 	Each Group Company has within the relevant time periods deducted and accounted for all
amounts which it has been obliged to deduct or pay in respect of Tax and, in particular, has
properly operated the PAYE system in all material respects by duly deducting Tax from all
payments made, or treated as made, to its employees or former employees, and accounting to HM
Revenue & Customs for all Tax deducted by it and for all Tax chargeable on benefits provided
for its employees or former employees.
	 
	5.3	 	Each Group Company has sufficient records to enable it to calculate any present or, so far as
possible, future liability for Tax of a Group Company or its entitlement to any deduction,
relief or repayment of Tax and any claims and elections it has made relating to Tax.
	 
	5.4	 	No Tax may be assessed on or required to be paid by any Group Company where the amount in
question is the primary liability of another person, and where such assessment or requirement
arises by reason of the failure by any other person to satisfy a Tax liability.
	 
	5.5	 	No circumstances exist under which a Group Company will be liable after Completion to pay
national insurance contributions or account for income tax or national insurance under the
PAYE system in respect of, or in consequence of, any event occurring in relation to, shares,
securities, options or interests in shares granted prior to Completion.
	 
	5.6	 	No Group Company is or has ever been a member of a VAT group for the purposes of Section 43
VATA.
	 
	5.7	 	No Group Company owns any assets to which Part XV of the Value Added Tax Regulations 1995
applies.
	 
	5.8	 	No Group Company has any outstanding arrangements with any other company which relate to
group relief or the payment of corporation tax.
	 
	5.9	 	No liability to tax (disregarding any statutory right to make any election, or the claim of
any allowance or relief) exists or is likely to arise to a Group Company or be increased as a
result of or in consequence of the entry into this Agreement and/or the sale of the Company
pursuant to this Agreement and/or a Group Company ceasing at any time to be a member of the
same group of companies as any other Group Company.
	 
	6.	 	Material Contracts
	 
	6.1	 	Copies of the Material Contracts have been Disclosed and no Group Company nor, so far as the
Vendor is aware, any other party to any Material Contract is in material default under any
such Material Contract and there are no circumstances in existence or contemplated by the
Target Group (including consummation of the transactions under this Agreement) which will give
rise to a default by any Group Company under any such Material Contracts.
	 
	6.2	 	No written notice avoiding, rescinding or terminating, or purporting to avoid, rescind or
terminate any Material Contract has been received or given by any Group Company nor has any
party to a Material Contract threatened to give such notice.

31

 

	6.3	 	The execution or the performance of this Agreement or any document to be executed at or
before Completion in accordance with this Agreement will not relieve any party (other than a
Group Company) to a Material Contract of its obligations or enable it to terminate such
Material Contract.
	 
	7.	 	Assets
	 
	7.1	 	The rights, properties and assets owned by each Group Company, the facilities and services to
which each Group Company has a contractual right, together with any assets held under or by
virtue of any licence, hire purchase and leasing agreements comprise all the material rights,
properties, assets, facilities and services necessary for the continuation of the Group’s
business after Completion in the places and in the manner in which it was carried on in the 12
months prior to the date of this Agreement.
	 
	7.2	 	Each Group Company is the legal and beneficial owner of, or is entitled to use and enjoy, all
material assets either (a) reflected on the balance sheet contained in the Audited Accounts or
(b) used by it in the conduct of its business other than assets which have been disposed of in
the ordinary course of business since the Balance Sheet Date.
	 
	7.3	 	No Group Company has received any sum, property or benefit, the payment or transfer of which
is liable to be avoided, or which is liable to be recovered from it under any rule of law and
does not hold any sum, property or right as trustee or constructive trustee.
	 
	7.4	 	The material items of plant and machinery, including fixed plant and machinery, and other
material equipment used in connection with the business of the Group are in reasonable repair
and condition, fair wear and tear excepted.
	 
	7.5	 	No Group Company is a party to or liable under a lease or hire, hire purchase, credit sale or
conditional sale, agreement and pursuant to which a Group Company is under an obligation of
more than £5,000 per annum.
	 
	7.6	 	Other than as part of any standard conditions of sale, or pursuant to any of the Data Room
Documents, no Group Company has given any guarantee or warranty or made any representation in
respect of goods or services supplied or contracted to be supplied by it save for any warranty
or guarantee implied by law and (save as aforesaid) has not accepted any obligation which
could give rise to any liability after any such goods or services have been supplied by it.
	 
	7.7	 	No Group Company has reason to believe that any line of products currently in stock or in the
course of production or any material proportion thereof is not or will not prove to be of
satisfactory quality and reasonable fitness for intended purpose.
	 
	7.8	 	No Group Company has received notice of any claim which remains outstanding alleging any
defect in, or lack of fitness for purpose of, any goods supplied by the Group Company, nor, so
far as the Vendor is aware, are there any circumstances which could give rise to any such
claim.
	 
	8.	 	Premises
	 
	8.1	 	The Properties comprise all of the material premises and land owned, occupied or otherwise
used in connection with the business of the Group and no Group Company has received written
notice of, and the Vendor is not aware of, any matters that adversely affect the Target
Group’s title to the Properties other than as Disclosed.
	 
	8.2	 	There is not outstanding any monetary claim or liability (contingent or otherwise) whatsoever
affecting the Relevant Assets nor is there any material expense likely in respect of the
repair of the Relevant Assets.
	 
	8.3	 	The Relevant Assets are not subject to any Encumbrance or any agreement to create the same.

32

 

	9.	 	Environmental
	 
	9.1	 	No Group Company has received notice of any civil, criminal or administrative action, claim,
complaint, notice, caution, correspondence, investigation or other proceedings or suit being
taken or made, pending or threatened in connection with the activities of any Group Company in
relation to
Environmental Matters including without limitation any liability (whether actual or
contingent) to remediate any land or to suspend cease alter or modify any activity carried
on (at any time) by any Group Company or any actual or alleged nuisance with owners or
occupiers adjoining the Premises or any property previously owned or occupied by any Group
Company . So far as the Vendor is aware, are there no facts or circumstances likely to give
rise to any of the foregoing.
	 
	9.2	 	All Environmental Consents required for carrying on the business of the Group have been
obtained and complied with and are in full force and effect and so far as the Vendor is aware
there are no existing facts or circumstances which will or are reasonably likely to result in
any Environmental Consent being terminated, revoked, suspended or modified in any material
respect, or which may prejudice its renewal.
	 
	9.3	 	Other than as set out in the Phase 1 Report, none of the activities of any Group Company at
any time have, nor has any asset or property owned or occupied by any Group Company, involved
the use of, or the release or discharge into the Environment of, or contained, any Hazardous
Substance prescribed or specified under any Environmental Laws as being prohibited or
restricted, and no release or discharge of any such substance or article by any Group Company
exceeds or has exceeded any allowable or permissible quotas or limits prescribed or specified
under any Environmental Laws or in any condition to any Environmental Permits.
	 
	9.4	 	Other than as set out in the Phase 1 Report, no land or other asset now or previously owned
or occupied by any Group Company at any time contains or has contained any storage tanks or
any Hazardous Substance whether above or below ground or (for the avoidance of doubt) has in
the past been used for the deposit, storage, treatment or disposal of Hazardous Substances.
	 
	9.5	 	Other than as set out in the Phase 1 Report or in the asbestos reports contained in the Data
Room Documents, there is no pollution or contamination of the Environment present at the
Premises in circumstances which would result in the Vendor or the Purchaser being held by the
relevant authority to be liable under Environmental Laws or in relation to which remedial
works would be required by the relevant authority to be carried out under Environmental Laws,
and there is no asbestos or asbestos containing material or underground storage tanks at the
Premises.
	 
	10.	 	Insurance
	 
	 	 	The details of the current insurance policies maintained by the Group as Disclosed are
accurate in all material respects. No claim is outstanding under any such policies where
the amount claimed is in excess of £25,000.
	 
	11.	 	Intellectual property and IT
	 
	11.1	 	The Disclosure Letter contains details of all the Intellectual Property rights, (the “IP”) in
respect of which each Group Company is the registered owner or applicant for registration.
	 
	11.2	 	The Group Companies own or are licensed (the terms of which are disclosed in the Disclosure
Letter) to use all IT Systems used by them in the operation of the business of the Group and
no Group Company has breached the terms of any licence and no notices of breach or termination
have been served on or by any Group Company in respect of any licence.
	 
	11.3	 	During the last three years, the IT Systems have not failed to function in a way that has had
a Material Adverse Effect on the business of the Group.

33

 

	11.4	 	Other than with respect to software and network equipment, the Group Companies own the IT
Systems free and clear of any Encumbrances.
	 
	11.5	 	The Company is the ‘WHOIS’ registrant of the Domain Names, and owns the copyright and other
Intellectual Property shown on the website which is accessed at those domain names.
	 
	11.6	 	No member of the Vendor’s Group currently uses any IP nor any of the names or words “Flexible
Lamps”, “FL” or “Rubbolite” or any names or words similar to or likely to be confused with
them (the “Restricted Names”) or any mark, style or logo similar to or likely to be confused
with them in any manner which is likely to or may result in confusion between or other
association with the business, goods, services or other activities of any Group Company
including by using any or all of the Restricted Names as part of a corporate name, trade name
or otherwise.
	 
	12.	 	Employees
	 
	12.1	 	The documents which have been Disclosed contain accurate particulars of the identities, dates
of commencement of employment or appointment to office, and terms of employment or appointment
of all employees and officers of each Group Company including details of all remuneration and
other benefits, such as profit sharing and bonus arrangements (whether or not contractual).
	 
	12.2	 	No Employees or directors of any Group Company are entitled, or will become entitled to
receive a bonus from any Group Company in respect of the proposed sale of the Group.
	 
	12.3	 	There have been no material disputes between any Group Company and any trade union, works
council or other employee representatives in the period of three years prior to the date of
this Deed.
	 
	13.	 	Pensions
	 
	13.1	 	No Group Company is or has ever been a party to any agreement or arrangement other than the
Pension Scheme for the provision of any Relevant Benefits for any person, and the Company is
the only participating employer in the Pension Scheme.
	 
	13.2	 	The Group Companies have no obligation to:

	 	(A)	 	contribute to any personal pension scheme (as defined in section 1 of the
Pension Schemes Act 1993); or
	 
	 	(B)	 	make available to any person a stakeholder pension scheme (as defined in
section 1 of the Welfare Reform and Pensions Act 1999).

	13.3	 	Materially complete copies of the following documents have been disclosed in the Disclosure
Letter:

	 	(A)	 	the trust deeds, rules and other documents containing the provisions currently
governing the Pension Scheme;
	 
	 	(B)	 	full particulars of the benefits and entitlements under the Pension Scheme and
the contributions payable to the Pension Scheme;
	 
	 	(C)	 	copies of all explanatory booklets and announcements that have been issued to
members of the Pension Scheme (other than individual benefit statements).

	 	 	There is no obligation to provide benefits under the Pension Scheme other than as revealed
in those documents and particulars.
	 
	13.4	 	In relation to the Pension Scheme copies of:

34

 

	 	(A)	 	all documents issued to members governing the current procedure for appointing
member-nominated trustees or trustee directors or opting out of such a procedure;
	 
	 	(B)	 	the current statement of investment principles;
	 
	 	(C)	 	all documents under which any actuary, auditor or other professional adviser is
appointed;
	 
	 	(D)	 	the current internal dispute resolution procedure;
	 
	 	(E)	 	all actuarial certificates for the purposes of section 67 of the Pensions Act
1995 or section 37 of the Pension Schemes Act 1993;
	 
	 	(F)	 	the latest three trustees’ reports and accounts (including the relevant
actuarial certificates);
	 
	 	(G)	 	the current schedule of contributions as required by the Pensions Act 1995; and
	 
	 	(H)	 	a list of all Employees who are members of the Pension Scheme together with all
particulars of them necessary to establish the benefits payable or contingently payable
to or in respect of them under the Pension Scheme, and a list of all Employees who will
become eligible to join the Pension Scheme upon the satisfaction of any conditions of
eligibility,

	 	 	are in the possession or control of the Vendor and have been delivered to the Purchaser on
or before the Completion Date.
	 
	13.5	 	In relation to the Pension Scheme, there are disclosed in the Disclosure Letter true and
complete details of:

	 	(A)	 	discretionary practices (for example, in relation to early retirement terms and
pension increases); and
	 
	 	(B)	 	any discretion exercised under the Pension Scheme to:

	 	(1)	 	augment benefits;
	 
	 	(2)	 	admit to membership any individual who would not otherwise have
been eligible for admission to membership;
	 
	 	(3)	 	transfer any member’s benefits, if the transfer payment has not
yet been made (wholly or partly);
	 
	 	(4)	 	provide a benefit which would not otherwise be provided; or
	 
	 	(5)	 	pay a contribution which would not otherwise have been paid.

	 	 	Otherwise, no power to augment benefits or provide additional or different benefits has been
exercised under the Pension Scheme and no undertaking or assurance has been given to any
person as to the continuance introduction increase or improvement of any Relevant Benefits
(whether or not there is any legal obligation to do so).
	 
	13.6	 	Details of all employers participating in the Pension Scheme and their terms of participation
have been disclosed in the Disclosure Letter. There are no arrangements outstanding in
relation to the making of any bulk transfer payment from or to the Pension Scheme.
	 
	13.7	 	The Company has been properly admitted to participation in the Pension Scheme and has duly
complied with its obligations under the Pension Scheme. All amounts due to be paid to the
Pension Scheme by or on behalf of the Company and all Employees and former Employees have been
paid. The Company may terminate its liability to contribute to the Pension Scheme without the
consent of any person and without further payment.

35

 

	13.8	 	All death in service benefits which may be payable under the Pension Scheme are insured and
all insurance premiums have been duly paid. So far as the Vendor is aware, there is no ground
on which the relevant insurance company could avoid liability under any policy of insurance
applicable to such benefits.
	 
	13.9	 	No Group Company has received notice of any civil, criminal, arbitration, administrative or
other proceedings, claims or disputes (including, without limitation, any complaints by
members, former members or prospective members under the internal disputes resolution
procedure, any complaint to
the Pensions Ombudsman or any investigation or enquiry, routine or otherwise by the
Occupational Pensions Regulatory Authority or the Pensions Regulator) by or against the
trustees, managers or administrators of the Pension Scheme or any Group Company and none are
in progress, pending or threatened and, so far as the Vendor is aware, there are no
circumstances which might give rise to any such proceedings, claims or disputes.
	 
	13.10	 	The Pension Scheme is a registered pension scheme within the meaning of section 150(2) of
the Finance Act 2004 and so far as the Vendor is aware, there is no reason why this
registration may be withdrawn.
	 
	13.11	 	The Pension Scheme is a contracted-out scheme within the meaning of Chapter I of Part III of
the Pension Schemes Act 1993. There is in force one or more contracting-out certificates and
as at the date of this Agreement, there are no circumstances which might cause the
certificate(s) to be withdrawn.
	 
	13.12	 	So far as the Vendor is aware, the Pension Scheme has at all times complied with, and been
administered in accordance with, the trusts, powers and provisions of the Pension Scheme, the
general requirements of law and the provisions of all relevant statutes, regulations and
requirements (including without limitation the requirements of the Pension Schemes Act 1993,
the Pensions Act 1995, the Pensions Act 2004 and the Finance Act 2004 and regulations made
under those Acts, and all applicable European and UK legislation relating to discrimination by
reason of sex, race, sexual orientation, part-time or temporary work, disability or religious
belief).
	 
	13.13	 	The Company has at all times complied with the provisions of all relevant statutes,
regulations and requirements in relation to the Pension Scheme. No part-time or temporary
Employees or former Employees have ever been excluded from membership of, or equal treatment
under, the Pension Scheme, and no Employees or former Employees have ever been excluded or
treated less favourably by reason of their sex, race, sexual orientation, disability or
religious belief.
	 
	13.14	 	There is no amount currently outstanding which is or might in the future be treated under
section 144 of the Pension Schemes Act 1993 or section 75 or 75A of the Pensions Act 1995,
section 43 of the Pensions Act 2004 (Financial support directions) or section 47 of the
Pensions Act 2004 (Contribution notices where non-compliance with financial support direction)
as a debt due from the Company to the trustees of any occupational pension scheme. The
Company has not entered into or proposed entering into a withdrawal arrangement (as defined in
section 2 of the Occupational Pension Schemes (Employer Debt) Regulations 2005).
	 
	13.15	 	No Group Company has been party to any act or failure to act which falls within subsection
(5) of section 38 of the Pensions Act 2004 (Contribution notices where avoidance of employer
debt) in relation to the Pension Scheme and no event which might fall within subsection (2) of
section 69 of the Pensions Act 2004 (Duty to notify the Regulator of certain events) in
relation to the Company or the Pension Scheme other than the purchase and sale of the shares
of the Company contemplated by this Agreement.
	 
	13.16	 	All of the assets of the Pension Scheme are under the possession or control of the trustees
of the Pension Scheme.

36

 

	13.17	 	There are attached to the Disclosure Letter true and complete copies of the documents
setting out the terms of the Norwich Union group life assurance policy (the “Life Assurance
Policy”). There are no claims in progress, pending or expected under the Life Assurance
Policy and there is no ground on which the relevant insurance company could avoid liability
under the Life Assurance Policy.
	 
	13.18	 	The Life Assurance Policy is still in force and all premiums payable by each Group Company
have been duly paid in accordance with the Life Assurance Policy.
	 
	13.19	 	No Group Company has made any report, and no Group Company has been notified of any report
having been made, under section 48 of the Pensions Act 1995 to the Occupational Pensions
Regulatory Authority or under section 70 of the Pensions Act 2004 to the Pensions Regulator
in respect of the Pension Scheme.
	 
	13.20	 	There are attached to the Disclosure Letter true and complete copies of the documents
setting out the terms of the permanent health insurance policy (the “PHI Policy”). There are
no claims in progress, pending or expected under the PHI Policy and there is no ground on
which the relevant insurance company could avoid liability under the PHI Policy.
	 
	13.21	 	The PHI Policy is still in force and all premiums payable by each Group Company have been
duly paid in accordance with the PHI Policy.
	 
	14.	 	Litigation and compliance with laws
	 
	14.1	 	No Group Company is engaged in any material litigation, arbitration, administrative or
criminal proceedings; there are no proceedings pending or threatened in writing, either by or
against a Group Company; and so far as the Vendor is aware there are no circumstances likely
to give rise to any such proceedings.
	 
	14.2	 	No Group Company has committed any criminal, illegal or other unlawful act or any breach of
statutory duty or any act or default which could reasonably be expected to lead to a claim or
proceedings against any Group Company or increase a liability of any Group Company in either
case which would be material to the business of the Group as a whole.
	 
	14.3	 	Each Group Company has conducted its business in all material respects in accordance with all
applicable legal and administrative requirements in its jurisdiction of operation.
	 
	15.	 	Licences
	 
	15.1	 	All necessary licences, consents, permits and authorisations have been obtained by the Group
to enable it to carry on its business as currently conducted.
	 
	15.2	 	A of the licences, consents, permits and authorisations are valid and subsisting and no Group
Company has received notice that any of them might be suspended, cancelled or revoked,
including as a result of the transactions contemplated by this Agreement.
	 
	16.	 	Insolvency
	 
	16.1	 	No order has been made, petition presented or resolution passed for the winding up of any
Group Company or for a provisional liquidator to be appointed in respect of it and no meeting
has been convened for the purposes of winding up any Group Company. No administrative
receiver, receiver or manager has been appointed of the whole or any part of the property,
assets or undertaking of any Group Company.
	 
	16.2	 	No administration order has been made and no petition for such an order has been presented in
respect of any Group Company.

37

 

	16.3	 	No Group Company is insolvent or unable to pay its debts within the meaning of s.123
Insolvency Act 1986 and no Group Company has stopped paying its debts as they fall due.
	 
	16.4	 	No voluntary arrangement has been proposed under s.1 of the Insolvency Act 1986 in respect of
any Group Company.
	 
	16.5	 	No administrator has been appointed in respect of any Group Company and no steps or actions
have been taken in connection with the appointment of an administrator in respect of any
Target Group Company.
	 
	16.6	 	No event analogous to any of the foregoing in paragraphs 17.1 to 17.5 inclusive has occurred
in or outside of England with respect to any Group Company.
	 
	16.7	 	No Group Company has at any time given any financial assistance in connection with any
acquisition of its share capital or the share capital of its holding company (as that
expression is defined in section 736 of the Companies Act 1985) as it would fall within
sections 151 to 158 (inclusive) of the Companies Act 1985.

38

 

SCHEDULE 4: LIMITATIONS ON LIABILITY

	1.	 	Interpretation
	 
	1.1	 	In this schedule where the context admits:
	 
	 	 	“Relevant Claim” means any claim in connection with any of the Warranties but shall not
include a claim in respect of the Tax Deed;
	 
	 	 	“Secondary Claim” means any claim made pursuant to clauses 2.1(c), 2.1(d) or 8.2(a) of the
Tax Deed; and
	 
	 	 	“Taxation Warranties” means the Warranties in paragraph 5 of schedule 3.
	 
	2.	 	Financial limits
	 
	2.1	 	Aggregate limit
	 
	 	 	The aggregate liability of the Vendor in respect of all Relevant Claims and claims under the
Tax Deed (excluding Secondary Claims) shall be 15% of the Final Consideration payable under
this Agreement, as finally determined. For the purposes of calculating the Vendor’s cap on
liability pursuant to this paragraph 2.1, the amount of the Final Consideration shall be
deemed to be the aggregate of the Initial Consideration (as adjusted pursuant to schedule 6
and schedule 7), the Additional Consideration (if any) and shall not be treated as reduced
by the provisions of clause 6.1(B) or clause 8.5.
	 
	2.2	 	Thresholds
	 
	 	 	The Vendor shall not be liable in respect of a Relevant Claim or claims under the Tax Deed
(excluding Secondary Claims) unless the aggregate liability of the Vendor in respect of all
Relevant Claims and claims under the Tax Deed exceeds £500,000 in which case the Vendor’s
liability shall be for the whole amount and not just the excess over £500,000.
	 
	2.3	 	Liability
	 
	 	 	For the purpose of paragraph 2.2 the liability of the Vendor in respect of a Relevant Claim
or claim under the Tax Deed shall mean the amount in respect of the Relevant Claim or claim
under the Tax Deed for which the Vendor admits liability in writing or is found to be liable
in a court of competent jurisdiction.
	 
	3.	 	Time limits
	 
	3.1	 	Notice to Vendor
	 
	 	 	The Vendor shall have no liability in respect of any Relevant Claim or claim under the Tax
Deed unless the Purchaser shall have given notice in writing to the Vendor of such claim
specifying (in reasonable detail) the matter which gives rise to the claim, the nature of
the claim and the amount claimed in respect thereof (detailing the Purchaser’s calculation
of the loss thereby alleged to have been suffered by it), such notice to be given as soon as
reasonably practicable and in any event not later than:

	 	(A)	 	the date dictated by the Tax Deed in the case of a claim in respect of the Tax
Deed; or
	 
	 	(B)	 	the date 15 months after the date of this Agreement, in any other case.

39

 

	3.2	 	Commencement of proceedings
	 
	 	 	All and any liability of the Vendor in respect of any Relevant Claim or any claim under the
Tax Deed notified to it in accordance with paragraph 3.1 shall (if such Relevant Claim has
not previously been satisfied, settled or withdrawn) be extinguished on the expiry of:

	 	(A)	 	6 months from the date of such notification of the Relevant Claim; or
	 
	 	(B)	 	24 months from the date of such notification of any claim under the Tax Deed,

	 	 	unless the Purchaser shall within such period have issued and validly served on the Vendor
proceedings in respect of such Relevant Claim.
	 
	4.	 	Matters reflected in accounts
	 
	 	 	The Vendor shall not be liable in respect of a Relevant Claim or an Indemnity Claim to the
extent that allowance, provision or reserve in respect of the matter giving rise to the
Relevant Claim was made in the Audited Accounts or is made in the Completion Accounts and
has thereby has adjusted the Initial Consideration.
	 
	5.	 	Change in law etc
	 
	 	 	The Vendor shall not be liable in respect of any Relevant Claim to the extent that it arises
or is increased as a result of any change in law (or change in the interpretation of law) or
in administrative practice of any government, governmental department, agency or regulatory
body occurring after the date of this Agreement (whether or not the change purports to be
effective retrospectively in whole or in part).
	 
	6.	 	Accounting bases etc.
	 
	 	 	The Vendor shall not be liable in respect of any Relevant Claim or any claim under the Tax
Deed to the extent that it arises or is increased as a result of any voluntary change after
Completion made by the Purchaser or the Company in the accounting bases, policies, practices
or methods applied in preparing any accounts or valuing any assets or liabilities of the
Company or any member of the Group from those used in preparing the Audited Accounts or the
Completion Accounts unless required by relevant Laws or applicable accounting standards.
	 
	7.	 	Acts of Purchaser etc.
	 
	7.1	 	The Vendor shall not be liable in respect of a Relevant Claim to the extent that the Relevant
Claim is attributable (in whole or in part) to:

	 	(A)	 	any voluntary act, omission or transaction carried out by or at the request of
or with the consent of the Purchaser or any member of the Purchaser’s Group or any of
their successors in title or assigns on or after Completion other than any such act,
omission or transaction carried out in the ordinary and proper course of business; or
	 
	 	(B)	 	anything expressly provided to be done or omitted to be done pursuant to this
Agreement or the Tax Deed.

	8.	 	Recovery from third parties
	 
	 	 	If the Vendor pays to or for the benefit of any member of the Purchaser’s Group any amount
in respect of any Relevant Claim, any claim under the Tax Deed or an Indemnity Claim and any
member of the Purchaser’s Group subsequently receives from any
other person any payment or
benefit in respect of the matter giving rise to the Relevant Claim, any claim under the Tax
Deed or an Indemnity Claim, the Purchaser shall thereupon pay to the Vendor an amount equal
to the

40

 

	 	 	 payment or benefit received (except to any extent that the liability of the Vendor in
respect of the
Relevant Claim, any claim under the Tax Deed or an Indemnity Claim was reduced to take
account of such payment or benefit).
	 
	9.	 	Non-quantifiable liabilities
	 
	 	 	The Vendor shall not be liable in respect of any Relevant Claim, claim under the Tax Deed or
an Indemnity Claim to the extent that it relates to a liability which is not capable of
being quantified unless and until the liability becomes capable of being quantified either
precisely or by determining a lower an upper range.
	 
	10.	 	Mitigation
	 
	 	 	Nothing in this Agreement shall limit or restrict the Purchaser’s obligation under English
law to mitigate any loss.
	 
	11.	 	No duplication of recovery
	 
	11.1	 	Loss otherwise compensated
	 
	 	 	The Vendor shall not be liable in respect of any Relevant Claim, any claim under the Tax
Deed or an Indemnity Claim to the extent that the subject of the claim has been or is made
good or is otherwise compensated for without cost to the Purchaser or the relevant member of
the Purchaser’s Group.
	 
	11.2	 	No double recovery
	 
	 	 	The Purchaser shall not be entitled to recover damages or otherwise obtain reimbursement or
restitution more than once in respect of the same loss.
	 
	11.3	 	Claims under Warranties or Tax Deed
	 
	 	 	In the event that the Purchaser is entitled to an Indemnity Claim or a claim under the Tax
Deed or under the Warranties in respect of the same subject matter, the Purchaser may claim
under either or all but payments under the Tax Deed shall pro tanto satisfy and discharge
any Indemnity Claim or claim which is capable of being under the Warranties in respect of
the same subject matter and vice versa.
	 
	12.	 	Paramount provisions
	 
	 	 	Subject to clause 8.3 and 8.4, the provisions of this schedule shall apply notwithstanding
anything else in this Agreement, the Tax Deed or any other Transaction Document to the
contrary.
	 
	13.	 	Exceptions to limitations
	 
	 	 	The limitations on liability set out in this schedule 4 shall not apply in the case of any
breach or alleged breach of any of the warranties contained in clause 6.8 and those of the
Warranties set out in paragraph 1 of schedule 3.

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SCHEDULE 5: PROPERTIES

PART 1 : FREEHOLD PREMISES WITH REGISTERED TITLES

	 	 	 	 	 	 	 	 	 
	Premises	 	 	 	 	 	 	 	Details of any tenancy to which the Premises is subject (or any
	Description	 	Registered Proprietor	 	Title Number	 	Current use	 	agreement for such tenancy)
	 
	International 

House, Horsecroft 

Road, The 

Pinnacles, Harlow

	 	Flexible Lamps

Limited
	 	EX389314
	 	Warehousing,
operations and car
parking
	 	1. Lease of Electricity Sub Station dated 7 April 1961 for 99
years (less 10 days) from 1 September 1960 registered under
title number EX776565 made between (1) The Educational Supply
Association Ltd and (2) The Eastern Electricity Board, current
tenant being EDF Energy Networks (EPN) Plc.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	2. Personal licence for use of car park as a Market on Sundays
granted to Keith Boulton t/a Countryside Promotions (minimum
licence fee of £300 per week) to continue until one party
gives 1 month’s notice of intention to terminate.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	3. Lease (undated) to PPE Limited of the warehouse offices and
yard being Unit 3 International House, Horsecroft Rd, for 5
year term commencing 1 July 2002 (rent of £82,000 pa), with a
mutual option to determine upon giving 3 months’ written
notice.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	4. Occupancy Agreement (undated) of part of International
House, Horsecroft Rd, known as Ivory Graphics, for the storage
and maintenance of sporting cars in favour of Niall Campbell,
termination upon 3 months’ notice by either party, rent of
£1.50 per sq. ft. pa.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	5. Licence (undated) in favour of Bareway Industrial (Harlow)
Limited to erect and maintain an estate sign upon the property
being Industrial House, Horsecroft Rd for a period of 2 years
and to continue thereafter until determined by the Licensor
(Flexible Lamps Limited) by 3 months’ written notice.
	 
	 	 	 	 	 	 	 	 
	4, Rookwood Way, 

Haverhill CB9 8PB

	 	Flexible Lamps

Limited
	 	SK163268
	 	Manufacturing,
offices and storage	 	 

42

 

	 	 	 	 	 	 	 	 	 
	Premises	 	 	 	 	 	 	 	Details of any tenancy to which the Premises is subject (or any
	Description	 	Registered Proprietor	 	Title Number	 	Current use	 	agreement for such tenancy)
	 
	Land and buildings
to the south of
Roydon Road, Harlow
(known as “Barrows
Road”)

	 	Flexible Lamps

Limited
	 	EX529395
	 	Manufacturing,
office, storage and
car parking
	 	1. Lease dated 10 March 2004 of the car parking area (200
spaces) at Barrows Rd, Harlow for a term of 5 years, made
between (1) Flexible Lamps Ltd and (2) Raytheon Systems
Limited, with initial rent of £75,000 pa, (with effect from 1
January 2007 a rent of £46,875 pa for 100 spaces only) for the
parking of private motor vehicles of the directors, employees
and visitors of Raytheon Systems Ltd.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	2. Personal licence for use of car park as a Market on Sundays
granted to Keith Boulton t/a Countryside Promotions (minimum
licence fee of £300 per week) to continue until one party
gives 1 month’s notice of intention to terminate.

PART 2 : LEASEHOLD PREMISES WITH REGISTERED TITLES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Details of any
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	tenancy to which
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	the Premises is
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	subject (or any
	Demised	 	Registered	 	 	 	Date of and	 	 	 	Current principal	 	 	 	agreement for
	Premises	 	Proprietor	 	Title Number	 	parties to lease	 	Term	 	yearly rent	 	Current use	 	such tenancy)
	 
	Unit 20, The Mead 

Industrial Park, 

Riverway

	 	Flexible Lamps

Limited
	 	EX418915
	 	6 November 1989

made between 

(1) Shell 

Pensions
Trust 

Limited and

(2) Flexible 

Lamps
Limited
	 	25 years from 25
June 1989
terminating on 24
June 2014
	 	 	 	 	 	Lease dated 24
November 2004
terminating on 24
June 2014 (less 3
days) made between
(1) Flexible Lamps
Limited and (2)
ESAB Group (UK)
Limited at a rent
of £339,000 per
year

43

 

SCHEDULE 6: COMPLETION ACCOUNTS

	1.	 	Interpretation
	 
	 	 	In this Schedule, where the context admits:
	 
	 	 	“Completion Accounts” means the consolidated accounts of the Group prepared and audited in
accordance with paragraph 2 and agreed or determined in accordance with paragraph 4;
	 
	 	 	“FRS” means a Financial Reporting Standard published by the Accounting Standards Board and
in force at the date of this Agreement;
	 
	 	 	“Net Current Assets” means the aggregate value of all current assets minus the aggregate
value of all current liabilities and provisions (in accordance with paragraph 89 of schedule
4 of the Companies Act 1985) all as shown in or derived from the Completion Accounts;
	 
	 	 	“Purchaser’s Accountants” means such firm of accountants as the Purchaser may nominate from
time to time; and
	 
	 	 	“SORP” means a Statement of Recommended Practice published by bodies recognised by the
Accounting Standards Board and in force at the date of this Agreement;
	 
	 	 	“SSAP” means a Statement of Standard Accounting Practice originally published by the
Accounting Standards Committee and not since superseded and in force at the date of this
Agreement;
	 
	 	 	“Vendor’s Accountants” means such firm of accountants as the Vendor may nominate from time
to time.
	 
	2.	 	Completion Accounts
	 
	2.1	 	Preparation
	 
	 	 	The Purchaser shall as soon as practicable, and in any event within 120 Business Days after
Completion, procure that accounts for the Company and the Subsidiaries shall be prepared and
audited in accordance with this schedule and the parties shall use their best endeavours to
secure compliance with this schedule by their respective accountants. The Purchaser shall
promptly supply all such information and provide access to all such records and personnel as
the Vendor, its accountants and any independent firm of accountants appointed under
paragraph 4.3 shall reasonably require in order to comply with their rights and obligations
under this schedule. The Vendor, if so required by the Purchaser or such independent firm,
shall use all reasonable endeavours with the reasonable assistance of the Purchaser
(including the provision by the Purchaser of an indemnity to the auditors) to obtain for the
Purchaser or such independent firm access to the working papers of the Company’s auditors
prepared in relation to the audit of the Audited Accounts.
	 
	2.2	 	Description
	 
	 	 	The Completion Accounts shall consist of a consolidated balance sheet of the Company and the
Subsidiaries as at the close of business on the date of Completion and shall be
substantially in the form of the Audited Accounts.
	 
	2.3	 	General requirements
	 
	 	 	The Completion Accounts shall:

	 	(A)	 	be prepared under the historic cost convention and in accordance with the
requirements of all relevant Laws and generally accepted accounting policies, bases,
methods, practices and procedures and with all applicable SSAPs, FRSs, and SORPS;

44

 

	 	(B)	 	subject to paragraph 2.3(A), apply and adopt the same policies, bases, methods,
practices and procedures of accounting as applied or adopted by the Company for the
purposes of the Audited Accounts; and
	 
	 	(C)	 	be audited by the Purchaser’s Accountants.

	2.4	 	Specific requirements
	 
	 	 	In preparing the Completion Accounts:

	 	(A)	 	no provision shall be made for any liability arising as a result of the entry
into this Agreement or any change of control of the Company occurring on or after the
date of this Agreement;
	 
	 	(B)	 	no provision shall be made against any receivable to the extent that the same
has been realised at the time the Completion Accounts are finally agreed;
	 
	 	(C)	 	no provision shall be made in the Completion Accounts to the extent that the
matter to which the provision relates has been shown to have been overprovided for or
has otherwise been cancelled or reduced before the Completion Accounts are finally
agreed and provided that cancellation or reduction of the respective liability has been
achieved at no cost to the relevant Group Company or the Purchaser;
	 
	 	(D)	 	no provision shall be made under FRS17 in respect of pension liabilities;
	 
	 	(E)	 	no provision shall be made in respect of audit fees for the preparation and
audit of the Completion Accounts;
	 
	 	(F)	 	no provision shall be made in respect of employee holiday pay; and
	 
	 	(G)	 	no provision for obsolete stock of the Company following the notice to
terminate the customer contract with General Motors may be made to the extent the same
is taken into account in the valuation of any stock carried out under paragraph 3.

	3.	 	Stock Valuation
	 
	 	 	For the purposes of the preparation of the Completion Accounts, the value of stock shall be
ascertained in accordance with the provisions of this paragraph 3.

	 	(A)	 	the Vendor and the Purchaser shall cause a stocktaking to be made on or after
the Completion Date (but in any event within 10 Business Days of the Completion Date)
of all the stock insofar as it then belongs to the Company and the Subsidiaries;
	 
	 	(B)	 	unless otherwise agreed by the parties such stocktaking shall consist of a
physical check of the amount, quality and condition of all such stock situated on the
Premises at the Completion Date and an inspection of the books and records and
contractual documentation (of the Company and the Subsidiaries) for all such stock not
so situated together with confirmation from the person or persons having physical
possession of such stock of the extent of any interest in or Encumbrance claimed over
such stock (if any); and
	 
	 	(C)	 	when such stocktaking has been completed the stock shall be valued by the
Purchaser in accordance with paragraph 2.3(B); and
	 
	 	(D)	 	the value of the stock as determined above shall be manually adjusted to
represent the value of the stock (calculated in accordance with this paragraph 3) as at
the date of the Completion Accounts, and that adjusted figure shall be used as the
value of stock in the Completion Accounts.

45

 

	4.	 	Procedure
	 
	4.1	 	Submission of draft

	 	(A)	 	As soon as the draft Completion Accounts shall have been prepared, the
Purchaser shall send a copy to the Vendor together with such working papers used in
connection with the preparation of the same as it considers necessary or appropriate to
understand and agree the Completion Accounts and shall in addition, at the same time,
send to the Vendor its calculation of the Net Current Assets.
	 
	 	(B)	 	Unless the Vendor shall within 90 Business Days after receipt of the draft
Completion Accounts (and associated papers and calculation as provided in paragraph
4.1(A)) serve a notice in writing on the Purchaser that it objects to the draft
Completion Accounts (identifying the reason for any objection and the amount(s) or
item(s) in the draft Completion Accounts and/or calculation which is/are in dispute)
(such notification being, for the purposes of this paragraph 4.1(B), an “Objection
Notice”) the Vendor shall be deemed to have irrevocably agreed to the draft Completion
Accounts and the Purchaser’s calculation of the Net Current Assets for all purposes of
this Agreement.

	4.2	 	Agreement of draft
	 
	 	 	If, within the period referred to in paragraph 4.1(B) the Vendor shall serve upon the
Purchaser an Objection Notice then the Purchaser and the Vendor shall use their reasonable
endeavours to reach agreement upon adjustments to the draft Completion Accounts and the
value of Net Current Assets. Neither the Vendor nor the Purchaser shall be entitled to
propose any adjustments to the draft Completion Accounts except: (i) in the case of the
Vendor, an adjustment relating to any asset or liability referred to in its Objection Notice
and (ii) in the case of either of them, an adjustment by way of counter-proposal to an
adjustment proposed by the other of them, being in each case, a revision of an adjustment
referred to in the Objection Notice.
	 
	4.3	 	Independent accountant
	 
	 	 	If the Vendor and the Purchaser are unable to reach agreement within 20 Business Days
following service of the Objection Notice, either the Vendor or the Purchaser shall be
entitled to refer the matter or matters in dispute to an independent firm of chartered
accountants (the “Firm”) agreed upon between them or (failing agreement) to be selected (at
the instance of either party) by the President for the time being of the Institute of
Chartered Accountants in England and Wales. The Firm shall act as experts not as
arbitrators and shall determine the matter or matters in dispute (which may include any
dispute concerning the interpretation of any provision of this Agreement affecting the
Completion Accounts or their jurisdiction to determine the dispute or the content or
interpretation of their terms of reference) and their decision shall be final and binding.
The Firm may so far as is reasonable instruct valuers, solicitors and other professional
advisers to the extent they consider necessary to reach their determination. The fees and
expenses of the Firm (including the fees of any professional advisers appointed by them as
aforesaid) shall be borne by the Vendor and the Purchaser equally or in such other
proportions as the Firm shall direct.
	 
	4.4	 	Accounts final and binding
	 
	 	 	If within the period referred to in paragraph 4.1(B) the Vendor shall not have served an
Objection Notice on the Purchaser, or if such notice is served and the Purchaser and the
Vendor shall subsequently agree the draft Completion Accounts or the matters in dispute are
referred to the Firm under paragraph 4.3, the draft Completion Accounts, as adjusted (where
applicable) so as to be in accordance with the agreement of the Purchaser and the Vendor or
the determination of the Firm shall be the Completion Accounts for the purposes of this
Agreement and shall be final and binding on the parties.

46

 

	4.5	 	Information and explanations
	 
	 	 	The Purchaser and the Purchaser’s Accountants shall provide such information and
explanations relating to the draft Completion Accounts and their preparation as the Vendor’s
Accountants, or the Firm shall reasonably require.
	 
	5.	 	Adjustment of Consideration
	 
	5.1	 	Increase or reduction
	 
	 	 	When the Completion Accounts have become final and binding, the Initial Consideration shall
forthwith:

	 	(A)	 	be increased by the amount (if any) by which the Net Current Assets of the
Company and the Subsidiaries as at the date of Completion as shown by the Completion
Accounts are greater than £6,784,000; or
	 
	 	(B)	 	be reduced by the amount (if any) by which the Net Current Assets of the
Company and the Subsidiaries as at the date of Completion as shown by the Completion
Accounts are less than £6,784,000.

	5.2	 	Payment
	 
	 	 	Any increase or reduction in the Initial Consideration shall be paid by the Purchaser or the
Vendor (as appropriate) within 10 Business Days after the Completion Accounts have become
final and binding as aforesaid and any amount not paid when due/the amount to be so paid
shall carry interest as set out in clause 22.

	6.	 	Assignment of receivables
	 
	6.1	 	If any provision is included in the agreed Completion Accounts in respect of bad or doubtful
debt, the Purchaser shall, following notice from the Vendor, at the Purchaser’s election
either:

	 	(A)	 	procure that the Company assigns such debts as are the subject of such
provision in the Completion Accounts together with all rights of recovery thereunder to
the Vendor for the sum of £1;
	 
	 	(B)	 	pay the Vendor the amount of such provision as contained in the Completion
Accounts as an adjustment to the Initial Consideration; or
	 
	 	(C)	 	a combination of 6.1(A) and 6.1(B) totalling the amount of the provisions made
in the Completion Accounts.

47

 

SCHEDULE 7: PENSIONS

	1.	 	Definitions
	 
	 	 	In this schedule, the following words shall have the following meanings:
	 
	 	 	“Actuarial Assumptions” means the actuarial assumptions agreed between the Purchaser’s
Actuary and the Vendor’s Actuary as set out in paragraph 7;
	 
	 	 	“Completion Pension Scheme Liabilities” means the Pension Scheme Liabilities as at the
Completion Date;
	 
	 	 	“Liability Movement Value” means the Completion Pension Scheme Liabilities minus the
Longstop Pension Scheme Liabilities, provided that such number shall not be less than zero
and to the extent that such reduction is caused by Structural Changes;
	 
	 	 	“Longstop Date” means the date 15 months after the Completion Date;
	 
	 	 	“Longstop Pension Scheme Liabilities” means the Pension Scheme Liabilities as at the
Longstop Date;
	 
	 	 	“Pension Scheme Liabilities” means the value of the past service liabilities on the
projected accrued benefit method of the Pension Scheme as calculated in accordance with
FRS17 and the Actuarial Assumptions and agreed between the Purchaser’s Actuary and the
Vendor’s Actuary;
	 
	 	 	“Pension Scheme” means The Flexible Lamps Limited Retirement Benefits Scheme;
	 
	 	 	“Purchaser’s Actuary” means Chris Hurry, Samer Hafiz or any other actuary employed by Hymans
Robertson LLP of One London Wall, London EC2Y 5EA (or any other office of that firm) or such
other person who is a member of the Institute of Actuaries or the Faculty of Actuaries in
Scotland as the Purchaser may retain for the purposes of this Schedule and notify to the
Vendor;
	 
	 	 	“Structural Changes” means any changes to the Pension Scheme, implemented prior to the
Longstop Date, made by or at the direction of the Purchaser, the Company or by the trustees
of the Pension Scheme (provided they are with the approval, or at the request, of the
Purchaser) by means of a deed of amendment or as otherwise permitted under the rules of the
Pension Scheme, or the exercise of a power under the provisions of the Pension Scheme
affecting members’ entitlement to benefits relating to pensionable service before or after
the Completion Date which has the effect of reducing Pension Scheme Liabilities including
without limitation the closing of the Pension Scheme, the closing of the Pension Scheme to
new members, the termination of employment of employees of any Group Company by way of
redundancy or induced voluntary resignation or voluntary redundancy in connection with the
sale of the Relevant Asset, a change of benefits under the Pension Scheme away from final
salary to career average earnings, or a change in commutation factors, but excluding any
changes made as required by Law or as required by Law following any change in the
requirements of Law, any termination of employment or resignation of employees of any Group
Company in the ordinary course of business of such Group Company, or the withdrawal from
service of any member between the Completion Date and the Longstop Date, whether voluntary
or compulsory, other than in connection with the sale of the Relevant Asset; and
	 
	 	 	“Vendor’s Actuary” means Andy Staddon or any other actuary employed by Mercer Human Resource
Consulting Limited of One Tower Place West, Tower Place, London EC3R 5BU or such other
person who is a member of the Institute of Actuaries or the Faculty of Actuaries in Scotland
as the Vendor may retain for the purposes of this schedule and notify to the Purchaser.

48

 

	2.	 	Structural Changes
	 
	2.1	 	The Vendor may within 40 Business Days after the Longstop Date notify the Purchaser that it
wishes to review whether any Structural Changes have caused a Liability Movement Value, and
requires the Purchaser to comply with the provisions of paragraphs 2.2 and 3 of this schedule.
	 
	2.2	 	The Purchaser is under no obligation to make any Structural Changes to the Pension Scheme,
but if required by the Vendor under paragraph 2.1 it will make available to the Vendor such
information as is necessary for the Vendor and the Vendor’s Actuary to ascertain the nature of
any Structural Changes and whether such Structural Changes have caused a Liability Movement
Value.
	 
	3.	 	Actuarial Calculation
	 
	3.1	 	Having been notified by the Vendor under paragraph 2.1, the Purchaser will procure that the
Purchaser’s Actuary calculates the Completion Pension Scheme Liabilities and the Longstop
Pension Scheme Liabilities and sends its calculation, in draft of such Pension Scheme
Liabilities and its calculation of the Liability Movement Value (if any) and all calculation
methodology and supporting documentation (the “Pension Pack”) to the Vendor within 60 Business
Days of having been so notified (or such other date as may be agreed between the Vendor and
the Purchaser).
	 
	3.2	 	The Vendor and the Vendor’s Actuary shall have 60 Business Days following receipt of the
Pension Pack pursuant to paragraph 3.1 to review such materials. The Purchaser shall procure
that the Purchaser’s Actuary, the Company and the Pension Scheme provide all information
reasonably requested by the Vendor or the Vendor’s Actuary to enable the Vendor’s Actuary to
check and confirm its agreement (or not) to the contents of the Pension Pack. If the
Purchaser fails to provide such information within such period (and any extension agreed by
the Vendor and the Purchaser) the matter shall be treated as a dispute and shall be resolved
under paragraph 6 below.
	 
	3.3	 	Unless the Vendor shall within 60 Business Days of receipt of the Pension Pack (as provided
in paragraph 3.1) serve a notice in writing on the Purchaser that it objects to the
calculation of the draft Pension Scheme Liabilities and/or of the draft Liability Movement
Value (identifying the reason for any objection and the amount(s) or item(s) and/or
calculation which is/are in dispute) (such notification being, for the purposes of this
paragraph 3.3, an “Objection Notice”) the Vendor shall be deemed to have irrevocably agreed to
the draft Pension Scheme Liabilities and the Purchaser’s calculation of the Liability Movement
Value.
	 
	3.4	 	If, within the period referred to in paragraph 3.3 the Vendor shall serve upon the Purchaser
an Objection Notice then the Vendor and the Purchaser shall use their reasonable endeavours to
reach agreement upon adjustments to the Pension Pack. Neither the Vendor nor the Purchaser
shall be entitled to propose any adjustments to the Pension Scheme Liabilities and the
Liability Movement Value as provided in paragraph 3.1, except: (i) in the case of the Vendor,
an adjustment relating to any item referred to in its Objection Notice and (ii) in the case of
either of them, an adjustment by way of counter-proposal to an adjustment proposed by the
other of them, being in each case, a revision of an adjustment referred to in the Objection
Notice.
	 
	3.5	 	If the Vendor and the Purchaser are unable to reach agreement within 20 Business Days
following service of the Objection Notice, the provisions of paragraph 6 shall apply.
	 
	4.	 	Payment
	 
	 	 	Within 10 Business Days of the agreement or finalisation of the Liability Movement Value in
accordance with this schedule, the Purchaser shall pay to the Vendor (by way of an increase
in the Initial Consideration) an amount equal to the Liability Movement Value, up to a
maximum of £1,200,000, such payment to be in full and final satisfaction of all liability of
the Purchaser to the Vendor under this schedule in respect of the Pension Scheme.

49

 

	5.	 	Undertakings
	 
	 	 	The Vendor and the Purchaser undertake to each other that they will use all reasonable
endeavours to expedite calculation of the Completion Pension Scheme Liabilities, Longstop
Pension Scheme Liabilities and the Liability Movement Value.
	 
	6.	 	Independent Actuary
	 
	 	 	Any dispute between the Vendor’s Actuary and the Purchaser’s Actuary concerning the amount
of the Completion Pension Scheme Liabilities, Longstop Pension Scheme Liabilities, the
Liability Movement Value or any other matter to be certified or agreed between them in
accordance with this schedule may, upon expiry of the appropriate time-limit (if any) by
which such matter is to be certified or agreed in accordance with this schedule and at the
option of either the Vendor or the Purchaser, be referred to an independent actuary to be
appointed by agreement between the Vendor and the Purchaser or, in default of agreement
within 14 days from the first nomination of an actuary by one party to the other, by the
President for the time being of the Institute of Actuaries on the application of either the
Vendor or the Purchaser. The independent actuary shall reach his decision on the basis of
the provisions of this schedule and shall act as an expert and not as an arbitrator. His
decision shall, in the absence of manifest error, be final and binding on the Vendor and
Purchaser and his costs shall be borne by the Vendor and the Purchaser in such proportions
as directed by the independent actuary.
	 
	7.	 	Actuarial Assumptions
	 
	 	 	The Actuarial Assumptions agreed between the Purchaser’s Actuary and the Vendor’s Actuary
for the purposes of calculating the Completion Pension Scheme Liabilities, the Longstop
Pension Scheme Liabilities and the Liability Movement Value are as set out below:
	 
	7.1	 	General assumptions
	 
	 	 	For members in service:

	 	(1)	 	No account shall be taken of lump sum death in service benefits other than
refund of contributions.
	 
	 	(2)	 	No account shall be taken of service beyond the Completion Date in valuing
ill-health pensions and widow(er)s’ pensions on death before retirement. Such
liabilities will be valued using the method in FRS17.

	7.2	 	Financial assumptions

	 	 	 
	Discount rate:
	 	5.00% p.a.
	Salary increases:
	 	3.50% p.a.
	Price inflation:
	 	3.00% p.a.
	Pension increases on LPI pensions:
	 	3.00% p.a.
	Increases to pensions in deferment (non- GMP):
	 	3.00% p.a.

50

 

	7.3	 	Demographic assumptions

	 	 	 
	Mortality before retirement:

	 	AM92/AF92 tables.

	 	 	 
	Mortality after retirement:

	 	PMA92/PFA92 tables based on
the calendar year 2025
	 
	 	 
	Ill health retirement:

	 	No allowance has been made.
	 
	 	 
	Early retirement:

	 	No allowance has been made for retirement
before normal retirement age.
	 
	 	 
	Withdrawals:

	 	Allowance has been made for withdrawals from
service as set out in Lane Clark and
Peacock’s FRS17 report dated 13 January 2006.
	 
	 	 
	Family Details:

	 	90% of men and women are assumed to be
married on retirement or earlier death.
Husbands are assumed to be 3 years older than
their wives.
	 
	 	 
	Commutation:

	 	Allowance has been made for members to
exchange part of their pensions for cash, on
the terms available at the Completion Date
when assessing the Completion Pension Scheme
Liabilities and on the terms available at the
Longstop Date when assessing the Longstop
Pension Scheme Liabilities. It will be
assumed that members commute 3/80ths of their
final pensionable salary for each year of
pensionable service (and proportionately for
additional completed months of pensionable
service).
	 
	 	 
	Membership:

	 	When assessing the Completion Pension Scheme
Liabilities, membership status (i.e. active,
deferred or pensioner) will be the actual
status at Completion Date. When assessing
the Longstop Pension Scheme Liabilities,
membership status will change only for those
members whose status changes as a result of
Structural Changes.

51

 

SCHEDULE 8: DOMAIN NAMES

http://www.flexible-lamps.co.uk/

http://www.flexible-lamps.com/

http://www.flexiblelamps.co.uk/

http://www.phasa.co.uk/

http://www.rubbolite.co.uk/

http://www.rubbolite.com/

52

 

	 	 	 	 	 	 	 	 	 
	Executed as a deed by

	 	 	)	 	 	 	 	 
	UIS INDUSTRIES LIMITED

	 	 	)	 	 	 	 	 
	Acting through its duly authorised

	 	 	)	 	 	 	 	 
	Attorney

	 	 	)	 	 	 /s/ Keith Zar	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Executed as a deed by

	 	 	)	 	 	 	 	 
	TRUCK-LITE CO. LIMITED

	 	 	)	 	 	 	 	 
	Acting through its duly authorised

	 	 	)	 	 	 	 	 
	Attorney

	 	 	)	 	 	 /s/ Jay Birch            /s/ Thi Hanh Jelf	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Executed as a deed by

	 	 	)	 	 	 	 	 
	UNITED COMPONENTS, INC.

	 	 	)	 	 	 	 	 
	By its duly authorised signatory

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 /s/ Keith Zar	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	Executed as a deed by

	 	 	)	 	 	 	 	 
	TRUCK-LITE CO., INC.

	 	 	)	 	 	 	 	 
	By its duly authorised attorney

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 /s/ Jay Birch	 	 
	 

	 	 	 	 	 	 	 	 

53exv10w17

 

Exhibit 10.17

EXECUTION COPY

UNITED COMPONENTS, INC.,

As Issuer

$230,000,000

9 3/8%  SENIOR SUBORDINATED NOTES DUE 2013

INDENTURE

Dated as of June 20, 2003

Wells Fargo Bank Minnesota, National Association,

As Trustee

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 
	ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	1	 
	 	SECTION 1.01      DEFINITIONS
	 	 	1	 
	 	SECTION 1.02      OTHER DEFINITIONS
	 	 	20	 
	 	SECTION 1.03      INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
	 	 	20	 
	 	SECTION 1.04      RULES OF CONSTRUCTION
	 	 	21	 
	ARTICLE 2. THE NOTES
	 	 	21	 
	 	SECTION 2.01      FORM AND DATING
	 	 	21	 
	 	SECTION 2.02      EXECUTION AND AUTHENTICATION
	 	 	23	 
	 	SECTION 2.03      REGISTRAR AND PAYING AGENT
	 	 	23	 
	 	SECTION 2.04      PAYING AGENT TO HOLD MONEY IN TRUST
	 	 	24	 
	 	SECTION 2.05      HOLDER LISTS
	 	 	24	 
	 	SECTION 2.06      TRANSFER AND EXCHANGE
	 	 	24	 
	 	SECTION 2.07      REPLACEMENT NOTES
	 	 	31	 
	 	SECTION 2.08      OUTSTANDING NOTES
	 	 	32	 
	 	SECTION 2.09      TREASURY NOTES
	 	 	32	 
	 	SECTION 2.10      TEMPORARY NOTES
	 	 	32	 
	 	SECTION 2.11      CANCELLATION
	 	 	32	 
	 	SECTION 2.12      DEFAULTED INTEREST
	 	 	33	 
	 	SECTION 2.13      CUSIP NUMBERS
	 	 	33	 
	 	SECTION 2.14      ISSUANCE OF ADDITIONAL NOTES
	 	 	33	 
	ARTICLE 3. REDEMPTION AND PREPAYMENT
	 	 	34	 
	 	SECTION 3.01      NOTICES TO TRUSTEE
	 	 	34	 
	 	SECTION 3.02      SELECTION OF NOTES TO BE REDEEMED OR PURCHASED
	 	 	34	 
	 	SECTION 3.03      NOTICE OF REDEMPTION
	 	 	34	 
	 	SECTION 3.04      EFFECT OF NOTICE OF REDEMPTION
	 	 	35	 
	 	SECTION 3.05      DEPOSIT OF REDEMPTION OR PURCHASE PRICE
	 	 	35	 
	 	SECTION 3.06      NOTES REDEEMED OR PURCHASED IN PART
	 	 	36	 
	 	SECTION 3.07      OPTIONAL REDEMPTION
	 	 	36	 
	 	SECTION 3.08      MANDATORY REDEMPTION
	 	 	37	 
	 	SECTION 3.09      OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS
	 	 	37	 
	ARTICLE 4. COVENANTS
	 	 	39	 
	 	SECTION 4.01      PAYMENT OF NOTES
	 	 	39	 
	 	SECTION 4.02      MAINTENANCE OF OFFICE OR AGENCY
	 	 	39	 
	 	SECTION 4.03      REPORTS
	 	 	40	 
	 	SECTION 4.04      COMPLIANCE CERTIFICATE
	 	 	40	 
	 	SECTION 4.05      TAXES
	 	 	41	 
	 	SECTION 4.06      STAY, EXTENSION AND USURY LAWS
	 	 	41	 
	 	SECTION 4.07      RESTRICTED PAYMENTS
	 	 	41	 
	 	SECTION 4.08      DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES
	 	 	44	 
	 	SECTION 4.09      INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
	 	 	46	 
	 	SECTION 4.10      ASSET SALES
	 	 	48	 
	 	SECTION 4.11      TRANSACTIONS WITH AFFILIATES
	 	 	50	 
	 	SECTION 4.12      LIENS
	 	 	51	 

i

 

	 	 	 	 	 	 
	 	Section 4.13      BUSINESS ACTIVITIES
	 	 	52	 
	 	Section 4.14      CORPORATE EXISTENCE
	 	 	52	 
	 	Section 4.15      OFFER TO REPURCHASE UPON CHANGE OF CONTROL
	 	 	52	 
	 	Section 4.16      NO SENIOR SUBORDINATED DEBT
	 	 	54	 
	 	Section 4.17      PAYMENTS FOR CONSENT
	 	 	54	 
	 	Section 4.18      ADDITIONAL SUBSIDIARY GUARANTEES
	 	 	54	 
	 	Section 4.19      DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
	 	 	54	 
	ARTICLE 5. SUCCESSORS
	 	 	55	 
	 	Section 5.01      MERGER, CONSOLIDATION OR SALE OF ASSETS
	 	 	55	 
	 	Section 5.02      SUCCESSOR CORPORATION SUBSTITUTED
	 	 	56	 
	ARTICLE 6. DEFAULTS AND REMEDIES
	 	 	56	 
	 	Section 6.01      EVENTS OF DEFAULT
	 	 	56	 
	 	Section 6.02      ACCELERATION
	 	 	58	 
	 	Section 6.03      OTHER REMEDIES
	 	 	58	 
	 	Section 6.04      WAIVER OF PAST DEFAULTS
	 	 	59	 
	 	Section 6.05      CONTROL BY MAJORITY
	 	 	59	 
	 	Section 6.06      LIMITATION ON SUITS
	 	 	59	 
	 	Section 6.07      RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT
	 	 	60	 
	 	Section 6.08      COLLECTION SUIT BY TRUSTEE
	 	 	60	 
	 	Section 6.09      TRUSTEE MAY FILE PROOFS OF CLAIM
	 	 	60	 
	 	Section 6.10      PRIORITIES
	 	 	60	 
	 	Section 6.11      UNDERTAKING FOR COSTS
	 	 	61	 
	ARTICLE 7. TRUSTEE
	 	 	61	 
	 	Section 7.01      DUTIES OF TRUSTEE
	 	 	61	 
	 	Section 7.02      RIGHTS OF TRUSTEE
	 	 	62	 
	 	Section 7.03      INDIVIDUAL RIGHTS OF TRUSTEE
	 	 	63	 
	 	Section 7.04      TRUSTEE’S DISCLAIMERS
	 	 	63	 
	 	Section 7.05      NOTICE OF DEFAULTS
	 	 	64	 
	 	Section 7.06      REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES
	 	 	64	 
	 	Section 7.07      COMPENSATION AND INDEMNITY
	 	 	64	 
	 	Section 7.08      REPLACEMENT OF TRUSTEE
	 	 	65	 
	 	Section 7.09      SUCCESSOR TRUSTEE BY MERGER, ETC.
	 	 	66	 
	 	Section 7.10      ELIGIBILITY; DISQUALIFICATION
	 	 	66	 
	 	Section 7.11      PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
	 	 	66	 
	ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
	 	 	66	 
	 	Section 8.01      OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE
	 	 	66	 
	 	Section 8.02      LEGAL DEFEASANCE AND DISCHARGE
	 	 	67	 
	 	Section 8.03      COVENANT DEFEASANCE
	 	 	67	 
	 	Section 8.04      CONDITIONS TO LEGAL OR COVENANT DEFEASANCE
	 	 	68	 
	 	Section 8.05      DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
Trust; Other Miscellaneous Provisions
	 	 	69	 
	 	Section 8.06      REPAYMENT TO COMPANY
	 	 	70	 
	 	Section 8.07      REINSTATEMENT
	 	 	70	 

ii

 

	 	 	 	 	 	 
	ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER
	 	 	70	 
	 	SECTION 9.01       WITHOUT CONSENT OF HOLDERS OF NOTES
	 	 	70	 
	 	SECTION 9.02       WITH CONSENT OF HOLDERS OF NOTES
	 	 	71	 
	 	SECTION 9.03       COMPLIANCE WITH TRUST INDENTURE ACT
	 	 	73	 
	 	SECTION 9.04       REVOCATION AND EFFECT OF CONSENTS
	 	 	73	 
	 	SECTION 9.05       NOTATION ON OR EXCHANGE OF NOTES
	 	 	74	 
	 	SECTION 9.06       TRUSTEE TO SIGN AMENDMENTS, ETC.
	 	 	74	 
	ARTICLE 10. SUBSIDIARY GUARANTEES
	 	 	74	 
	 	SECTION 10.01      AGREEMENT TO GUARANTEE
	 	 	74	 
	 	SECTION 10.02      EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES
	 	 	75	 
	 	SECTION 10.03      GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS
	 	 	76	 
	 	SECTION 10.04      RELEASES
	 	 	77	 
	ARTICLE 11. SUBORDINATION
	 	 	78	 
	 	SECTION 11.01      AGREEMENT TO SUBORDINATE
	 	 	78	 
	 	SECTION 11.02      LIQUIDATION; DISSOLUTION; BANKRUPTCY
	 	 	78	 
	 	SECTION 11.03      DEFAULT ON DESIGNATED SENIOR DEBT
	 	 	78	 
	 	SECTION 11.04      ACCELERATION OF SECURITIES
	 	 	79	 
	 	SECTION 11.05      WHEN DISTRIBUTION MUST BE PAID OVER
	 	 	79	 
	 	SECTION 11.06      NOTICE BY COMPANY
	 	 	80	 
	 	SECTION 11.07      SUBROGATION
	 	 	80	 
	 	SECTION 11.08      RELATIVE RIGHTS
	 	 	80	 
	 	SECTION 11.09      SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY
	 	 	81	 
	 	SECTION 11.10      DISTRIBUTION OR NOTICE TO REPRESENTATIVE
	 	 	81	 
	 	SECTION 11.11      RIGHTS OF TRUSTEE AND PAYING AGENT
	 	 	81	 
	 	SECTION 11.12      AUTHORIZATION TO EFFECT SUBORDINATION
	 	 	82	 
	 	SECTION 11.13      AMENDMENTS
	 	 	82	 
	ARTICLE 12. SATISFACTION AND DISCHARGE
	 	 	82	 
	 	SECTION 12.01      SATISFACTION AND DISCHARGE
	 	 	82	 
	 	SECTION 12.02      APPLICATION OF TRUST MONEY
	 	 	83	 
	ARTICLE 13. MISCELLANEOUS
	 	 	84	 
	 	SECTION 13.01      TRUST INDENTURE ACT CONTROLS
	 	 	84	 
	 	SECTION 13.02      NOTICES
	 	 	84	 
	 	SECTION 13.03      COMMUNICATIONS BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES
	 	 	85	 
	 	SECTION 13.04      CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
	 	 	85	 
	 	SECTION 13.05      STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
	 	 	85	 
	 	SECTION 13.06      RULES BY TRUSTEE AND AGENTS
	 	 	86	 
	 	SECTION 13.07      NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
	 	 	86	 
	 	SECTION 13.08      GOVERNING LAW
	 	 	86	 
	 	SECTION 13.09      NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
	 	 	86	 
	 	SECTION 13.10      SUCCESSORS
	 	 	86	 
	 	SECTION 13.11      SEVERABILITY
	 	 	86	 
	 	SECTION 13.12      COUNTERPART ORIGINALS
	 	 	86	 
	 	SECTION 13.13       TABLE OF CONTENTS, HEADINGS, ETC.
	 	 	87	 

iii

 

	 	 	 
	EXHIBITS:	 	 
	
	 	 
	EXHIBIT A	 	
FORM OF NOTE
	EXHIBIT B	 	
FORM OF SUPPLEMENTAL INDENTURE
	EXHIBIT C	 	
FORM OF NOTATION ON SENIOR SUBORDINATED NOTE RELATING TO SUBSIDIARY GUARANTEE

iv

 

Cross-Reference Table*

	 	 	 	 	 	 	 
	Trust Indenture	 	 	Indenture	 
	Act Section	 	 	Section	 
	310	 	
(a)(1)
	 	 	7.10	 
	 	 	
(a)(2)
	 	 	7.10	 
	 	 	
(a)(3)
	 	 	N.A.	 
	 	 	
(a)(4)
	 	 	N.A.	 
	 	 	
(a)(5)
	 	 	7.10	 
	 	 	
(b)
	 	 	7.10	 
	 	 	
(c)
	 	 	N.A.	 
	311	 	
(a)
	 	 	7.11	 
	 	 	
(b)
	 	 	7.11	 
	 	 	
(c)
	 	 	N.A.	 
	312	 	
(a)
	 	 	2.05	 
	 	 	
(b)
	 	 	13.03	 
	 	 	
(c)
	 	 	13.03	 
	313	 	
(a)
	 	 	7.06	 
	 	 	
(b)(1)
	 	 	N.A.	 
	 	 	
(b)(2)
	 	 	7.06; 7.07	 
	 	 	
(c)
	 	 	7.06; 13.02	 
	 	 	
(d)
	 	 	7.06	 
	314	 	
(a)
	 	 	4.03; 13.02; 13.05	 
	 	 	
(b)
	 	 	N.A.	 
	 	 	
(c)(1)
	 	 	13.04	 
	 	 	
(c)(2)
	 	 	13.04	 
	 	 	
(c)(3)
	 	 	N.A.	 
	 	 	
(d)
	 	 	N.A.	 
	 	 	
(e)
	 	 	13.05	 
	 	 	
(f)
	 	 	N.A.	 
	315	 	
(a)
	 	 	7.01	 
	 	 	
(b)
	 	 	7.05, 13.02	 
	 	 	
(c)
	 	 	7.01	 
	 	 	
(d)
	 	 	7.01	 
	 	 	
(e)
	 	 	6.11	 
	316	 	
(a)(last sentence)
	 	 	2.09	 
	 	 	
(a)(1)(A)
	 	 	6.05	 
	 	 	
(a)(1)(B)
	 	 	6.04	 
	 	 	
(a)(2)
	 	 	N.A.	 
	 	 	
(b)
	 	 	6.07	 
	 	 	
(c)
	 	 	2.12	 
	317	 	
(a)(1)
	 	 	6.08	 

	 	 	* This Cross-Reference Table is not part of the Indenture.

v

 

	 	 	 	 	 	 	 
	 	 	
(a)(2)
	 	 	6.09	 
	 	 	
(b)
	 	 	2.04	 
	318	 	
(a)
	 	 	13.01	 
	 	 	
(b)
	 	 	N.A.	 
	 	 	
(c)
	 	 	13.01	 

     N.A. means not applicable.

     *This Cross-Reference Table is not part of the Indenture.

vi

 

          This INDENTURE dated as of June 20, 2003, among United Components, Inc., a
Delaware corporation (the “Company”), Mid-South Mfg., Inc., an Arkansas
corporation, Airtex Products, LLC, a Delaware limited liability company,
Champion Laboratories, Inc., a Delaware corporation, UCI-Airtex Holdings, Inc.,
a Delaware corporation, UCI Investments, L.L.C., a Delaware limited liability
company, Airtex Products, Inc., an Illinois corporation, Chefford Master
Manufacturing Co., an Illinois corporation, Pee Cee Manufacturing Co., Inc., an
Illinois corporation, Fuel Filter Technologies, Inc., a Michigan corporation,
Pioneer, Inc., a Mississippi corporation, Neapco Inc., a Pennsylvania
corporation and Wells Manufacturing Corp., a Wisconsin corporation, and Wells
Fargo Bank Minnesota, National Association, as Trustee.

          The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 9 3/8%  Senior
Subordinated Notes due 2013 (the “Initial Notes”) and the 9 3/8%  Senior
Subordinated Notes due 2013 (the “Exchange Notes” and, together with the
Initial Notes, the “Notes”):

ARTICLE 1.
 DEFINITIONS AND
INCORPORATION
 BY REFERENCE

Section 1.01 Definitions.

          “144A
Global Note” means the global note in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with and registered in the name of the Depositary or its nominee that will be
issued in a denomination equal to the outstanding principal amount of the Notes
sold in reliance on Rule 144A.

          “Acquired
Debt” means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured
by a Lien encumbering any asset acquired by such specified Person.

          “Acquisition” means the Company’s acquisition, in accordance with the
purchase agreement, dated as of April 25, 2003, among United Components, Inc.,
UIS, Inc. and UIS Industries Inc., of the vehicle parts businesses of UIS,
Inc., consisting of all of the issued and outstanding common stock or other
equity interests of Champion Laboratories, Inc., Wells Manufacturing
Corporation, Neapco Inc., Pioneer, Inc. Wells Manufacturing Canada Limited, UIS
Industries Ltd. (which is the owner of 100% of the capital stock of Flexible
Lamps, Ltd. and Airtex Products Ltd.), Mid-South Mfg. Inc., Airtex Products
S.A., Airtex Products, Inc., Talleres Mecanicos Montserrat S.A. de C.V.,
Brummer Seal de Mexico, S.A. de C.V., Brummer Mexicana en Puebla, S.A., de
C.V., Automotive Accessory Co. Ltd. and Airtex Products, LLC, a newly formed
limited liability company that will own the domestic assets of the Airtex
Products business of UIS, Inc.

 

 

          
“Additional Notes” means any notes (other than the Initial Notes), if any,
issued under this Indenture in accordance with Sections 2.02, 2.14 and 4.09
hereof.

          “Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling”, “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 Stock, by agreement or otherwise; provided that beneficial
ownership of 10% or more of the Voting Stock of a Person shall be deemed to be
control.

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

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

          “Asset Sale” means (i) the sale, lease, conveyance or other disposition of
any assets or rights; provided that the sale, conveyance or other disposition
of all or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by the covenant contained in
Section 4.15 and/or the covenant contained in Section 5.01 and not by the
covenant contained in Section 4.10; and (ii) the issuance of Equity Interests
in any of the Company’s Restricted Subsidiaries or the sale of Equity Interests
in any of its Restricted Subsidiaries. Notwithstanding the preceding, none of
the following items shall be deemed to be an Asset Sale: (i) any single
transaction or series of related transactions that involves assets having a
fair market value of less than $2.0 million; (ii) a transfer of assets between
or among the Company and its Restricted Subsidiaries; (iii) an issuance of
Equity Interests by a Restricted Subsidiary to the Company or to another
Restricted Subsidiary; (iv) the sale or lease of products, services, equipment,
inventory, accounts receivable or other assets in the ordinary course of
business or other disposition of damaged, worn-out or obsolete assets in the
ordinary course of business; (v) the sale or other disposition of cash or Cash
Equivalents; (vi) the license of patents, trademarks, copyrights and know-how
to third Persons in the ordinary course of business; (vii) the creation of
Liens; and (viii) a Restricted Payment that does not violate or Permitted
Investment that is permitted by Section 4.07 hereof.

          “Attributable Debt” in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).

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

2

 

          
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular “person” (as that term is used in Section 13(d)(3)
of the Exchange Act), such “person” will be deemed to have beneficial ownership
of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
“Beneficially Owns” and “Beneficially Owned” have correlative meanings.

          “Board of Directors” means (i) with respect to a corporation, the board of
directors of the corporation, (ii) with respect to a partnership, the board of
directors of the general partner of the partnership, and (iii) with respect to
any other Person, the board or committee of such Person serving a similar
function.

          “Broker-Dealer” has the meaning set forth in the Registration Rights
Agreement.

          “Business
Day ” means any day other than a Legal Holiday.

          “Capital Lease Obligation” means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.

          “Capital Stock” means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.

          “Cash Equivalents” means (i) United States dollars and any other currency
that is convertible into United States dollars without legal restrictions and
which is utilized by the Company or any of its Restricted Subsidiaries in the
ordinary course of its business, (ii) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support of those securities) having maturities of not more
than one year from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers’ acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with any lender party to the Credit
Agreement or with any domestic commercial bank having capital and surplus in
excess of $500.0 million and a Thomson Bank Watch Rating of “B” or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above, (v) commercial paper having one of the two highest ratings
obtainable from Moody’s or S&P and in each case maturing within one year after
the date of acquisition and (vi) money market funds at least 95% of the assets
of which constitute Cash Equivalents of the kinds described in clauses (i)-(v)
above.

3

 

           “Change of Control” means the occurrence of any of the following: (i)
prior to the occurrence of the first public offering of common stock of the
Company, the Permitted Holders cease to be the Beneficial Owners, directly or
indirectly, of a majority of the Voting Stock of the Company, measured by
voting power rather than number of shares, whether as a result of issuance of
securities of the Company, any merger, consolidation, liquidation or
dissolution of the Company, any direct or indirect transfer of securities by
the Permitted Holders or otherwise, (ii) the sale, lease, transfer, conveyance
or other disposition (other than by way of merger or consolidation), in one or
a series of related transactions, of all or substantially all of the assets of
the Company and its Restricted Subsidiaries taken as a whole to any “person”
(as such term is used in Section 13(d)(3) of the Exchange Act) other than a
Permitted Holder or a Related Party of a Permitted Holder, (iii) the adoption
of a plan relating to the liquidation or dissolution of the Company, (iv) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” (as such term is used
in Section 13(d)(3) of the Exchange Act), other than the Permitted Holders and
their Related Parties, becomes the “Beneficial Owner”, directly or indirectly,
of more than 50% of the Voting Stock of the Company, measured by voting power
rather than number of shares, (v) the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors
or (vi) the Company consolidates with, or merges with or into, any Person, or
any Person consolidates with, or merges with or into, the Company, in any such
event pursuant to a transaction in which any of the outstanding Voting Stock of
the Company or such other Person is converted into or exchanged for cash,
securities or other property, other than any such transaction where (A) the
surviving transferee Person is controlled by the Permitted H
olders or (B) the
Voting Stock of the Company outstanding immediately prior to such transaction
is converted into or exchanged for Voting Stock (other than Disqualified Stock)
of the surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance).

          “Clearstream” means Clearstream Banking, S.A., or any successor securities
clearing agency.

          “Consolidated Cash Flow” means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period, plus
(i) an amount equal to any extraordinary loss plus any net loss realized by
such Person or any of its Restricted Subsidiaries in connection with an Asset
Sale (to the extent such losses were deducted in computing such Consolidated
Net Income), plus (ii) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers’ acceptance financings), and net of
the effect of all payments made or received pursuant to Hedging Obligations, to
the extent that any such expense was deducted in computing such Consolidated
Net Income, plus (iv) depreciation, amortization (including amortization of
intangibles but excluding amortization of other prepaid cash expenses that were
paid in a prior

4

 

period) and other non-cash expenses (excluding any such non-cash expense
to the extent that it represents an accrual of or reserve for cash expenses in
any future period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Subsidiaries for such period to the extent
that such depreciation, amortization and other non-cash expenses were deducted
in computing such Consolidated Net Income, plus (v) unrealized non-cash losses
resulting from foreign currency balance sheet adjustments required by GAAP to
the extent such losses were deducted in computing such Consolidated Net Income,
plus (vi) any non-recurring fees, charges or other expenses (including bonus
and retention payments and severance expenses, restructuring costs and
acquisition integration costs and fees) made or incurred in connection with the
Acquisition within one year of the closing of the offering of the Initial
Notes; plus (vii) all other extraordinary, unusual or non-recurring items of
gain or loss, or revenue or expense, minus (viii) non-cash items increasing
such Consolidated Net Income for such period, other than the accrual of revenue
in the ordinary course of business, in each case, on a consolidated basis and
determined in accordance with GAAP.

          “Consolidated Net Income” means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (or loss) of any Person that is not
a Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary will be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the cumulative effect of a change in accounting principles
will be excluded and (iv) any impairment loss of such Person or its Restricted
Subsidiaries relating to goodwill or other non-amortizing intangible asset will
be excluded.

          “Continuing Directors” means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of this Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.

          “Corporate Trust Office of the Trustee” will be at the principal address
of the Trustee specified in Section 13.02 hereof or such other address as to
which the Trustee may give notice to the Company.

          “Credit Agreement” means that certain Credit Agreement, dated as of the
closing date of the Acquisition, among the Company, the lenders parties
thereto, Lehman Brothers Inc. and J.P. Morgan Securities Inc., as joint lead
arrangers, JPMorgan Chase Bank, as syndication agent, ABN AMRO Bank N.V.,
Credit Lyonnais, New York Branch, General Electric Capital Corporation and
Fleet National Bank, as co-documentation agents, and Lehman Commercial Paper
Inc., as administrative agent, providing for up to $350.0 million of term loan
borrowings

5

 

and $75.0 million of revolving credit borrowings, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced (whether upon or after termination or otherwise) or refinanced
(including by means of sales of debt securities to institutional investors)
from time to time.

          “Credit Facilities” means one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced (including by
means of sales of debt securities to institutional investors) in whole or in
part from time to time.

          “Default” means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

          “Definitive Note” means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Article 2 hereof, substantially in
the form of Exhibit A hereto, except that such Note will not bear the Global
Note Legend and will not have the “Schedule of Exchanges of Interests in the
Global Note” attached thereto.

          “Depositary” means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, “Depositary” shall mean or include such successor.

          “Designated Senior Debt” means (i) any Indebtedness outstanding under the
Credit Agreement and (ii) any other Senior Debt permitted under this Indenture
the principal amount of which is $25.0 million or more and that has been
designated by the Company as “Designated Senior Debt”.

          “Disqualified Stock” means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the Holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale will not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07 hereof.

          “Distribution Compliance Period”, with respect to any Notes, means the
period of 40 consecutive days beginning on and including the later of (i) the
day on which such Notes are

6

 

first offered to Persons other than distributors (as defined in Regulation
S) in reliance on Regulation S and (ii) the Issue Date with respect to such
Notes.

          “Domestic Subsidiary” means any Restricted Subsidiary of the Company that
was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.

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

          “Equity Offering” means any public or private sale of Capital Stock (other
than Disqualified Stock) made for cash on a primary basis by the Company after
the date of this Indenture.

          “Euroclear ”means Euroclear Bank S.A./N.V., as operator of the Euroclear
system, or any successor securities clearing agency.

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

          “Exchange Notes” means (i) the 9 3/8%  Senior Subordinated Notes due 2013,
registered under the Securities Act, issued pursuant to this Indenture in
connection with an Exchange Offer pursuant to a Registration Rights Agreement
and (ii) additional notes, if any, issued pursuant to a registration statement
filed with the SEC under the Securities Act.

          “Exchange Offer” means the exchange and issuance by the Company, pursuant
to a Registration Rights Agreement, of a principal amount of Exchange Notes
(which will be registered pursuant to the Exchange Offer Registration
Statement) equal to the outstanding principal amount of Initial Notes or
Additional Notes, as the case may be, tendered by Holders thereof in connection
with such exchange and issuance.

          “Exchange Offer Registration Statement” has the meaning set forth in the
Registration Rights Agreement.

          “Existing
Indebtedness” means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement and
the Notes) in existence on the date of this Indenture, until such amounts are
repaid.

          “Fixed Charges” means, with respect to any specified Person for any
period, the sum, without duplication, of (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers’ acceptance financings), and net of
the effect of all payments made or received pursuant to Hedging Obligations,
plus (ii) the consolidated interest of such Person and its Restricted

7

 

Subsidiaries that was capitalized during such period, plus (iii) any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such
Guarantee or Lien is called upon), plus (iv) the product of (A) all dividends,
whether paid or accrued and whether or not in cash, on any series of preferred
stock of such Person or any of its Restricted Subsidiaries, other than dividend
payments on Equity Interests payable solely in Equity Interests of the Company
(other than Disqualified Stock), times (B) a fraction, the numerator of which
is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.

          “Fixed Charge Coverage Ratio” means with respect to any specified Person
for any four-quarter reference period, the ratio of the Consolidated Cash Flow
of such Person and its Restricted Subsidiaries for such period to the Fixed
Charges of such Person and its Restricted Subsidiaries for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases or redeems any Indebtedness (other
than ordinary working capital borrowings) or issues, repurchases or redeems
preferred stock subsequent to the commencement of the applicable four-quarter
reference period for which the Fixed Charge Coverage Ratio is being calculated
and on or prior to the date on which the event for which the calculation of the
Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed
Charge Coverage Ratio will be calculated giving pro forma effect to such
incurrence, assumption, Guarantee, repayment, repurchase or redemption of
Indebtedness, or such issuance, repurchase or redemption of preferred stock,
and the use of proceeds therefrom, as if the same had occurred at the beginning
of the applicable four-quarter reference period. In addition, for purposes of
calculating the Fixed Charge Coverage Ratio, (i) acquisitions that have been
made by the specified Person or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, subsequent to the commencement of the applicable four-quarter
reference period and on or prior to the Calculation Date will be given pro
forma effect as if they had occurred on the first day of the four-quarter
reference period including any Consolidated Cash Flow and any pro forma expense
and cost reductions that have occurred or are reasonably expected to occur, in
the reasonable judgment of the chief financial officer of the specified Person
(regardless of whether those cost savings or operating improvements could then
be reflected in pro forma financial statements in accordance with Regulation
S-X promulgated under the Securities Act or any other regulation or policy of
the SEC related thereto), (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, will be excluded,
(iii) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, will be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the specified
Person or any of its Restricted Subsidiaries following the Calculation Date,
(iv) any Person that is a Restricted Subsidiary on the Calculation Date will be
deemed to have been a Restricted Subsidiary at all times during the applicable
four-quarter reference period, (v) any Person that is not a Restricted
Subsidiary on such Calculation Date will be deemed not to have been a
Restricted Subsidiary at any time during the applicable four-quarter reference
period and (vi) if any Indebtedness bears a floating rate of interest, the
interest expense on such Indebtedness will be calculated as if the rate in
effect on the Calculation Date had been the applicable rate for the entire
applicable four-quarter

8

 

reference period (taking into account any Hedging Obligation applicable to
such Indebtedness if such Hedging Obligation has a remaining term as at the
Calculation Date in excess of 12 months).

          “Foreign
Cash Equivalents” means (i) certificates of deposit or bankers
acceptances of, and bank deposits with, any bank organized under the laws of
any country that is a member of the European Economic Community, whose
short-term commercial paper rating from Standard & Poor’s Rating Services is at
least A-1 or the equivalent thereof or from Moody’s Investors Service, Inc. is
at least P-1 or the equivalent thereof, in each case with maturities of not
more than six months from the date of acquisition; (ii) commercial paper
maturing not more than one year from the date of creation thereof and, at the
time of acquisition, having the highest rating obtainable from either Standard
& Poor’s Rating Services or Moody’s Investors Service, Inc. or (iii) shares of
any money market mutual fund that has its assets invested continuously in the
types of investments referred to in clauses (i) and (ii) above.

          “Foreign
Subsidiary” means any Restricted Subsidiary of the Company that
was not formed under the laws of the United States or any state of the United
States or the District of Columbia.

          “GAAP” means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which were in effect on the date of this Indenture.

          “Global Notes” means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Article 2 hereof.

          “Global Note Legend” means the legend set forth in Section 2.06(e)(i) to
be placed on all Global Notes issued under this Indenture.

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

          “Guarantee” means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.

          “Guarantors” means each of the Company’s Domestic Subsidiaries in
existence on the date of this Indenture and each other Subsidiary of the
Company that executes a Subsidiary Guarantee in accordance with the provisions
of this Indenture, and their respective successors and assigns.

          “Hedging Obligations” means, with respect to any specified Person, the
obligations of such Person incurred in the normal course of business and
consistent with past

9

 

practices and not for speculative purposes under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements
entered into with one or more financial institutions and designed to protect
the Person or entity entering into the agreement against fluctuations in
interest rates with respect to Indebtedness incurred and not for purposes of
speculation, (ii) foreign exchange contracts and currency protection agreements
entered into with one or more financial institutions and designed to protect
the Person or entity entering into the agreement against fluctuations in
currency exchange rates with respect to Indebtedness incurred and not for
purposes of speculation, (iii) any commodity futures contract, commodity option
or other similar agreement or arrangement designed to protect against
fluctuations in the price of commodities used by such Person at the time and
(iv) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates or currency exchange rates.

          “Holder” means a Person in whose name a Note is registered.

          “Indebtedness” means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent, (i) in respect of borrowed money, (ii) evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof), (iii) in respect of banker’s
acceptances, (iv) representing Capital Lease Obligations, (v) representing the
balance deferred and unpaid of the purchase price of any property due more than
six months after such property is acquired, or (vi) representing the loss value
of any Hedging Obligations, if and to the extent any of the preceding items
(other than letters of credit and Hedging Obligations) would appear as a
liability upon a balance sheet of the specified Person prepared in accordance
with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of
others secured by a Lien on any asset of the specified Person (whether or not
such Indebtedness is assumed by the specified Person) and, to the extent not
otherwise included, the Guarantee by the specified Person of any Indebtedness
of any other Person. The amount of any Indebtedness outstanding as of any date
will be (i) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount and (ii) the principal amount
of the Indebtedness, together with any interest thereon that is more than 30
days past due, in the case of any other Indebtedness.

          In addition, for the purpose of avoiding duplication in calculating the
outstanding principal amount of Indebtedness for purposes of the covenant
described in Section 4.09 hereof, Indebtedness arising solely by reason of the
existence of a Lien to secure other Indebtedness permitted to be incurred under
the covenant described in Section 4.09 hereof will not be considered
incremental Indebtedness.

          Indebtedness will not include the obligations of any Person (A) resulting
from the endorsement of negotiable instruments for collection in the ordinary
course of business, (B) under stand-by letters of credit to the extent
collateralized by cash or Cash Equivalents and (C) resulting from
representations, warranties, covenants and indemnities given by such Person
that are reasonably customary for sellers or transferors in an accounts
receivable securitization transaction.

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

10

 

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

          “Initial Notes” means $230.0 million in aggregate principal amount of
9-3/8% Senior Subordinated Notes due 2013 issued under this Indenture on the
Issue Date.

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

          “Investments” means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company will be deemed to
have made an Investment on the date of any such sale or disposition equal to
the fair market value of the Equity Interests of such Restricted Subsidiary not
sold or disposed of in an amount determined as provided in the final paragraph
of Section 4.07 hereof. The acquisition by the Company or any Restricted
Subsidiary of the Company of a Person that holds an Investment in a third
Person will be deemed to be an Investment by the Company or such Restricted
Subsidiary in such third Person in an amount equal to the fair market value of
the Investment held by the acquired Person in such third Person on the date of
any such acquisition in an amount determined as provided in the final paragraph
of Section 4.07 hereof.

          “Issue Date” means June 20, 2003.

          “Legal Holiday” means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. 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 will accrue
for the intervening period.

          “Letter
of Transmittal” means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Initial Notes and Additional Notes
for use by such Holders in connection with the Exchange Offer.

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

11

 

           “Liquidated Damages” means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.

          “Moody’s” means Moody’s Investors Services, Inc.

          “Net
Income” means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (or loss), together with any related provision for taxes thereon, realized
in connection with (A) any Asset Sale or (B) the disposition of any securities
by such Person or any of its Restricted Subsidiaries or the extinguishment of
any Indebtedness of such Person or any of its Restricted Subsidiaries and (ii)
any extraordinary gain (or loss), together with any related provision for taxes
on such extraordinary gain (or loss).

          “Net Proceeds” means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions, recording fees, title
transfer fees, appraiser fees, costs of preparation of assets for sale) and any
relocation expenses incurred as a result of such Asset Sale, taxes paid or
payable as a result of such Asset Sale (in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements),
amounts required to be applied to the repayment of Indebtedness, other than
Senior Debt, secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.

          “Non-Recourse Debt” means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (A) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (B) is directly or indirectly liable (as a guarantor or
otherwise) or (C) is the lender, (ii) no default with respect to which
(including any rights that the holders of the Indebtedness may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes) of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity and (iii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock (other than stock of an Unrestricted Subsidiary pledged by the
Company or any of its Restricted Subsidiaries) or assets of the Company or any
of its Restricted Subsidiaries.

          “Non-U.S. Person” means a Person who is not a U.S. Person.

          “Note Custodian” means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.

          “Notes” has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this

12

 

Indenture, and unless the context otherwise requires, all references to
the Notes shall include the Initial Notes and any Additional Notes.

          “Obligations” means any principal, premium and Liquidated Damages, if any,
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization, whether or not a claim for post-filing
interest is allowed in such proceeding), penalties, fees, charges, expenses,
indemnifications, reimbursement obligations, damages, guarantees and other
liabilities or amounts payable under the documentation governing any
Indebtedness or in respect thereto.

          “Officer” means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice-President of
such Person.

          “Officer’s Certificate” means a certificate signed on behalf of the
Company by one Officer of the Company, who must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 13.05
hereof.

          “Opinion of Counsel” means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 13.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.

          “Parent” means UCI Acquisition Holdings, Inc., a Delaware corporation.

          “Participant” means, with respect to DTC, Euroclear or Clearstream, a
Person who has an account with DTC, Euroclear or Clearstream, respectively
(and, with respect to DTC, shall include Euroclear and Clearstream).

          “Permitted Business” means the lines of business conducted by the Company
and its Restricted Subsidiaries on the date of this Indenture and any business
incidental or reasonably related thereto or which is a reasonable extension
thereof as determined in good faith by the Board of Directors of the Company
and set forth in an Officer’s Certificate delivered to the Trustee.

          “Permitted Holders” means (i) TC Group L.L.C. (which operates under the
trade name “The Carlyle Group”), a Delaware limited liability company, and (ii)
Carlyle Partners III, L.P. and its Related Parties or any other investment fund
controlled by TC Group L.L.C. For purposes of this definition, “control” shall
have the meaning given such term in the definition of the term “Affiliate”.

          “Permitted Investment” means (i) any Investment in the Company or in a
Restricted Subsidiary of the Company; (ii) any Investment in Cash Equivalents
or Foreign Cash Equivalents; (iii) any Investment by the Company or any
Subsidiary of the Company in a Person, if as a result of such Investment (A)
such Person becomes a Restricted Subsidiary of the Company or (B) such Person
is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted

13

 

Subsidiary of the Company; (iv) any Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.10 hereof; (v) any Investment solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Company or made with the proceeds of a substantially concurrent sale of
such Equity Interests (other than Disqualified Stock); (vi) any Investments
received in compromise or resolution of obligations of (A) trade creditors or
customers that were incurred in the ordinary course of business, including
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer or (B) litigation,
arbitration or other disputes; (vii) Hedging Obligations permitted to be
incurred under Section 4.09 hereof; (viii) repurchase of the Notes; (ix) loans
and advances to officers, directors and employees in an aggregate amount not to
exceed $500,000 extended during any one fiscal year or $2.0 million outstanding
at any time; (x) Investments of any Person (other than Indebtedness of such
Person) in existence at the time such Person becomes a Subsidiary of the
Company; provided such Investment was not made in connection with or
anticipation of such Person becoming a Subsidiary of the Company; (xi)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers’ compensation, performance and other similar
deposits; (xii) any Investment consisting of a guarantee permitted under
Section 4.09 hereof; (xiii) Investments consisting of non-cash consideration
received in the form of securities, notes or similar obligations in connection
with dispositions of obsolete or worn out assets permitted pursuant to this
Indenture; (xiv) advances, loans or extensions of credit to suppliers in the
ordinary course of business by the Company or any of its Restricted
Subsidiaries; (xv) Investments in any Person to the extent such Investment
existed on the date of this Indenture and any Investment that replaces,
refinances or refunds such an Investment, provided, that the new Investment is
in an amount that does not exceed that amount replaced, refinanced or refunded
and is made in the same Person as the Investment replaced, refinanced or
refunded; (xvi) Investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business; and (xvii) other
Investments in any Person having an aggregate fair market value (measured on
the date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (xvii) since the date of this Indenture that remain outstanding,
not to exceed $25.0 million.

          “Permitted Junior Securities” means Equity Interests in the Company or
debt securities that are subordinated to all Senior Debt (and any debt
securities issued in exchange for Senior Debt) to substantially the same extent
as, or to a greater extent than, the Notes and the Subsidiary Guarantees are
subordinated to Senior Debt pursuant to Article 11 of this Indenture.

          “Permitted Liens” means (i) Liens on assets of the Company or any of its
Restricted Subsidiaries securing Senior Debt that was permitted by the terms of
this Indenture to be incurred; (ii) Liens in favor of the Company or any
Guarantor; (iii) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any Subsidiary of
the Company, provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company or
the Subsidiary; (iv) Liens on property existing at the time of acquisition
thereof by the Company or any Restricted Subsidiary of the Company, provided
that such Liens were in existence prior to the contemplation of such

14

 

acquisition; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vi) Liens to secure Indebtedness
(including Capital Lease Obligations) permitted by clause (iv) of the second
paragraph of Section 4.09 hereof covering only the assets acquired or financed
by such Indebtedness; (vii) Liens existing on the date of this Indenture;
(viii) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded,  provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP has been made therefor; (ix) Liens on assets of Unrestricted Subsidiaries
that secure Non-Recourse Debt of Unrestricted Subsidiaries; (x) Liens imposed
by law, such as carriers’, warehousemen’s, landlord’s and mechanics’ Liens, in
each case, incurred in the ordinary course of business; (xi) survey exceptions,
easements or reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real property that
were not incurred in connection with Indebtedness and that do not in the
aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such Person;
(xii) Liens created for the benefit of (or to secure) the Notes (or Guarantees
of the Notes); (xiii) Liens to secure any Permitted Refinancing Indebtedness
permitted to be incurred under this Indenture;  provided, however, that: (A) the
new Lien shall be limited to all or part of the same property and assets that
secured or, under the written agreements pursuant to which the original Lien
arose, could secure the original Lien (plus improvements and accessions to,
such property or proceeds or distributions thereof); and (B) the Indebtedness
secured by the new Lien is not increased to any amount greater than the sum of
(x) the outstanding principal amount or, if greater, committed amount, of the
Permitted Referencing Indebtedness and (y) an amount necessary to pay any fees
and expenses, including premiums, related to such refinancings, refunding,
extension, renewal or replacement; (xiv) Liens arising from Uniform Commercial
Code financing statement filings by lessors regarding operating leases entered
into by such lessors and the Company and its Restricted Subsidiaries in the
ordinary course of business; (xv) Liens on assets of Foreign Subsidiaries;
provided, however, that such liens only secure Indebtedness permitted by clause
(xiv) of the second paragraph of Section 4.09 of this Indenture; and (xvi)
Liens incurred in the ordinary course of business of the Company or any
Subsidiary of the Company with respect to obligations that do not exceed $5.0
million at any one time outstanding.

          “Permitted Refinancing Indebtedness” means any Indebtedness of the Company
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries (other than intercompany
Indebtedness); provided that (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable) of the Indebtedness
extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest on the Indebtedness and the amount of all expenses and premiums
incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness is subordinated
in right of payment to the Notes on terms at least as favorable to the

15

 

Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (iv) such Indebtedness is incurred either by the Company or by
the Subsidiary that is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.

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

          “Private Placement Legend” means the legend set forth in Section
2.06(e)(i) to be placed on all Notes issued under this Indenture except as
otherwise permitted by the provisions of this Indenture.

          “Purchase Agreement” means (i) with respect to the Initial Notes, the
Purchase Agreement, dated as of June 6, 2003, among the Company, the
Guarantors, Lehman Brothers Inc., J.P. Morgan Securities Inc., ABN AMRO
Incorporated and Credit Lyonnais Securities (USA) Inc. and (ii) with respect to
each issuance of Additional Notes, the purchase agreement or underwriting
agreement among the Company, the Guarantors and the Persons purchasing such
Additional Notes.

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

          “Registration Rights Agreement” means the Registration Rights Agreement,
dated as of the date hereof, by and among the Company, the Guarantors and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements among the Company,
the Guarantors and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights given
by the Company to the purchasers of Additional Notes to register such
Additional Notes under the Securities Act.

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

          “Regulation S Global Note” means a Global Note bearing the Global Note
Legend and the Private Placement Legend and deposited with or on behalf of the
Depositary and registered in the name of the Depositary or its nominee, issued
in a denomination equal to the outstanding principal amount of the Notes
initially sold in reliance on Rule 903 of Regulation S.

          “Related Party” means (i) any controlling stockholder, 80% (or more) owned
Subsidiary, or immediate family member (in the case of an individual) of any
Permitted Holder; or (ii) any trust, corporation, partnership or other entity,
the beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of any one or more
Permitted Holders and/or such other Persons referred to in the immediately
preceding clause (i).

          “Representative” means the indenture trustee or other trustee, agent or
representative for any Senior Debt.

16

 

           “Responsible Officer” when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) with direct responsibility for the
administration of this Indenture or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.

          “Restricted Global Notes” means the 144A Global Note and the Regulation S
Global Note, each of which shall bear the Private Placement Legend.

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

          “Restricted Subsidiary” means, with respect to any Person, any Subsidiary
of such Person that is not an Unrestricted Subsidiary.

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

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

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

          “Rule 903” means Rule 903 promulgated under the Securities Act.

          “Rule 904” means Rule 904 promulgated under the Securities Act.

          “SEC” means the Securities and Exchange Commission.

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

          “Senior Debt” means (i) all Indebtedness of the Company or any Guarantor
outstanding under the Credit Facilities and all Hedging Obligations with
respect thereto, (ii) any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Notes and (iii)
all Obligations with respect to the foregoing. Notwithstanding anything to the
contrary in the foregoing, Senior Debt will not include (a) any liability for
federal, state, local or other taxes owed or owing by the Company, (b) any
intercompany Indebtedness of the Company or any of its Subsidiaries to the
Company or any of its Affiliates, (c) any trade payables or (d) the portion of
any Indebtedness that is incurred in violation of this Indenture.

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

17

 

          “Significant Subsidiary” means any Subsidiary which is a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.

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

          “Subsidiary” means, with respect to any specified Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (A) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (B) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).

          “Subsidiary Guarantee” means any Guarantee by a Guarantor of the Company’s
payment Obligations under this Indenture and the Notes, executed pursuant to
the provisions of this Indenture.

          “S&P” means Standard and Poor’s Corporation.

          “TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as
in effect on the date on which this Indenture is qualified under TIA.

          “Transaction Documents” means this Indenture, the Notes, the Purchase
Agreement and the Registration Rights Agreement.

          “Transfer Restricted Securities” means securities that bear or are
required to bear the Private Placement Legend set forth in Section 2.06(e)(i)
hereof.

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

          “Unrestricted Global Note” means one or more Global Notes, substantially
in the form of Exhibit A attached hereto, that bear the Global Note Legend,
that do not and are not required to bear the Private Placement Legend and are
deposited with or on behalf of and registered in the name of the Depositary or
its nominee.

          “Unrestricted Subsidiary” means any Subsidiary of the Company (other than
the Subsidiaries of the Company on the date of this Indenture or any successor
to any of them) that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors, but only to the
extent that such Subsidiary: (i) has no Indebtedness other

18

 

than Non-Recourse Debt; (ii) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company; (iii) is a Person with respect to which neither
the Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (A) to subscribe for additional Equity Interests or (B) to maintain
or preserve such Person’s financial condition or to cause such Person to
achieve any specified levels of operating results; and (iv) has not guaranteed
or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries. Any such
designation by the Board of Directors will be evidenced to the Trustee by
filing with the Trustee a certified copy of a resolution of the Board of
Directors giving effect to such designation and an Officer’s Certificate
certifying that such designation complied with the foregoing conditions and was
permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary
would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary shall be deemed to be
incurred by a Restricted Subsidiary of the Company as of such date (and, if
such Indebtedness is not permitted to be incurred as of such date under Section
4.09 hereof, the Company will be in default of such covenant). The Board of
Directors of the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that such designation will be deemed to
be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation will only be permitted if (i) such Indebtedness is permitted under
Section 4.09 hereof, calculated on a  pro  forma basis as if such designation had
occurred at the beginning of the four-quarter reference period, and (ii) no
Default or Event of Default would be in existence following such designation.

          “U.S. Person” means a U.S. person as defined in Rule 902(k) under the
Securities Act.

          “Voting Stock” of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.

          “Weighted Average Life to Maturity” means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of such
Indebtedness, by (B) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment,
by (ii) the then outstanding principal amount of such Indebtedness.

          “Wholly Owned” means, when used with respect to any Subsidiary or
Restricted Subsidiary of a Person, a Subsidiary (or Restricted Subsidiary, as
appropriate) of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors’ qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Subsidiaries
(or Wholly Owned Restricted Subsidiaries, as appropriate) of such Person.

19

 

Section 1.02 Other Definitions.

	 	 	 	 	 
	 	 	Defined in
	Term            	 	Section
	“Affiliate Transaction”	 	 	
4.11	 
	“Asset Sale Offer”	 	 	
3.09	 
	“Change of Control Offer”	 	 	
4.15	 
	“Change of Control Payment”	 	 	
4.15	 
	“Change of Control Payment Date”	 	 	
4.15	 
	“Company”	 	 	
preamble	 
	“Covenant Defeasance”	 	 	
8.03	 
	“DTC”	 	 	
2.03	 
	“Event of Default”	 	 	
6.01	 
	“Excess Proceeds”	 	 	
4.10	 
	“incur”	 	 	
4.09	 
	“Legal Defeasance”	 	 	
8.02	 
	“Offer Amount”	 	 	
3.09	 
	“Offer Period”	 	 	
3.09	 
	“Paying Agent”	 	 	
2.03	 
	“Payment Blockage Notice”	 	 	
11.03	 
	“Payment Default”	 	 	
6.01	 
	“Permanent Regulation S Global Note”	 	 	
2.01	 
	“Permitted Debt”	 	 	
4.09	 
	“Purchase Date”	 	 	
3.09	 
	“Registrar”	 	 	
2.03	 
	“Restricted Payments”	 	 	
4.07	 
	“Rule 144A Global Note”	 	 	
2.01	 
	“Temporary Regulation S Global Note	 	 	
2.01	 

     Section 1.03 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:

          “indenture securities” means the Notes;

          “indenture security Holder” means a Holder of a Note;

          “indenture to be qualified” means this Indenture;

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

          “obligor” on the Notes means the Company and the Guarantors, respectively,
and any successor obligor on the Notes.

20

 

          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 have the meanings so assigned to them.

Section 1.04 Rules of Construction.

          Unless the context otherwise requires:

		
	 	     (i)     a term has the meaning assigned to it;
	 
	 	     (ii)     an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
	 
	 	     (iii)     “or” is not exclusive;
	 
	 	     (iv)     words in the singular include the plural, and in the plural
include the singular;
	 
	 	     (v)     provisions apply to successive events and transactions; and
	 
	 	     (vi)     references to sections of or rules under the Securities Act
will be deemed to include substitute, replacement of successor sections
or rules adopted by the SEC from time to time.

ARTICLE 2.
 THE NOTES

Section 2.01 Form and Dating.

          (a)     General. The Notes and the Trustee’s certificate of authentication
will be substantially in the form of Exhibit A hereto. The Notes may be issued
in the form of Definitive Notes or Global Notes, as specified by the Company.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note will be dated the date of its authentication.
The Notes will be in denominations of $1,000 and integral multiples thereof.

          Notes issued in global form will be substantially in the form of Exhibit A
attached hereto (including the Global Note Legend and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). Notes issued in
definitive form shall be substantially in the form of Exhibit A attached hereto
(but without the Global Note Legend and without the “Schedule of Exchanges of
Interests in the Global Note” attached thereto). Each Global Note will
represent such of the outstanding Notes as will be specified therein and each
will provide that it represents the aggregate principal amount of outstanding
Notes from time to time endorsed thereon and that the aggregate principal
amount of outstanding Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the aggregate principal amount of outstanding Notes represented thereby will
be made by the Trustee or the Note Custodian, at the direction of the Trustee,
in accordance with instructions given by the Holder thereof as required by
Section 2.06 hereof.

21

 

           The terms and provisions contained in the Notes will constitute, and are
hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture will govern and be controlling.

          (b)     Initial Notes.  The Initial Notes will be offered and sold by the
Company pursuant to a Purchase Agreement. The Initial Notes will be resold
initially only to (i) QIBs in reliance on Rule 144A and (ii) Non-U.S. Persons
in reliance on Regulation S. Initial Notes may thereafter be transferred to,
among others, QIBs and purchasers in reliance on Regulation S, subject to the
restrictions on transfer set forth herein. Initial Notes initially resold
pursuant to Rule 144A will be issued initially in the form of one or more
temporary Global Notes in definitive, fully registered form (collectively, the
“Rule 144A Global Note”) and Initial Notes initially resold pursuant to
Regulation S will be issued initially in the form of one or more temporary
Global Notes in definitive, fully registered form (collectively, the “Temporary
Regulation S Global Note”), in each case without interest coupons and with the
Global Note Legend and Private Placement Legend set forth in Exhibit A hereto,
which will be deposited on behalf of the purchasers of the Initial Notes
represented thereby with the Notes Custodian, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as provided in this Indenture. Beneficial
ownership interests in the Temporary Regulation S Global Note will not be
exchangeable for interests in the Rule 144A Global Note, a permanent global
note (the “Permanent Regulation S Global Note”) or a Definitive Note without a
legend containing restrictions on transfer of such Note prior to the expiration
of the Distribution Compliance Period and then only upon (x) certification in
form reasonably satisfactory to the Trustee that beneficial ownership interests
in such Temporary Regulation S Global Note are owned either by Non-U.S. Persons
or U.S. Persons who purchased such interests in a transaction that did not
require registration under the Securities Act and (y) in the case of an
exchange for a Definitive Note, in compliance with Section 2.01(c) hereof. The
Temporary Regulation S Global Note and the Permanent Regulation S Global Note
are collectively referred to herein as the “Regulation S Global Note”. The
aggregate principal amount of the Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and
the Depositary or its nominee as hereinafter provided.

          (c)     Book-Entry Provisions.  This Section 2.01(c) will apply only to a
Global Note deposited with or on behalf of the Depositary.

          The Company will execute and the Trustee will, in accordance with this
Section 2.01(c), authenticate and deliver initially one or more Global Notes
that (a) will be registered in the name of the Depositary for such Global Note
or Global Notes or the nominee of such Depositary and (b) will be delivered by
the Trustee to such Depositary or pursuant to such Depositary’s instructions or
held by the Trustee as custodian for the Depositary.

          Participants in the Depositary will have no rights under this Indenture
with respect to any Global Note held on their behalf by the Depositary or by
the Trustee as the custodian of the Depositary or under such Global Note, and
the Company, the Trustee and any agent of the Company or the Trustee will be
entitled to treat the Depositary as the absolute owner of such Global Note for
all purposes whatsoever. Notwithstanding the foregoing, nothing herein will

22

 

prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Participants, the operation of customary practices of such Depositary
governing the exercise of the rights of a Holder of a beneficial interest in
any Global Note.

          (d)     Certificated Notes. Except as provided in this Section 2.01 or
Section 2.03 or 2.04, owners of beneficial interests in Global Notes shall not
be entitled to receive physical delivery of Definitive Notes.

Section 2.02 Execution and Authentication.

          One Officer will sign the Notes for the Company by manual or facsimile
signature.

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

          A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.

          The Trustee will authenticate and deliver: (i) on the Issue Date, an
aggregate principal amount of $230.0 million 9 3/8% Senior Subordinated Notes
Due 2013, (ii) Additional Notes for an original issue in an aggregate principal
amount specified in the written order of the Company pursuant to this Section
2.02 and (iii) Exchange Notes for issue only in an Exchange Offer pursuant to a
Registration Rights Agreement, for a like principal amount of Initial Notes or
Additional Notes, in each case upon a written order of the Company signed by
one Officer of the Company. Such order will specify the amount of the Notes to
be authenticated and the date on which the original issue of the Notes is to be
authenticated.

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

Section 2.03 Registrar and Paying Agent.

          The Company will maintain an office or agency where Notes may be presented
for registration of transfer or for exchange (“Registrar”) and an office or
agency where Notes may be presented for payment (“Paying Agent”). The
Registrar will keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term “Registrar” includes any co-registrar and the term
“Paying Agent” includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company will
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails

23

 

to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee will act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.

          The Company initially appoints The Depository Trust Company (“DTC”) to act
as Depositary with respect to the Global Notes.

          The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.

Section 2.04 Paying Agent to Hold Money in Trust.

          The Company will require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Liquidated Damages, if any, or interest on the Notes, 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) will
have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it will segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any
bankruptcy or reorganization proceedings relating to the Company, the Trustee
will serve as Paying Agent for the Notes.

Section 2.05 Holder Lists.

          The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and will otherwise comply with TIA § 312(a). If the Trustee is not
the Registrar, the Company will furnish to the Trustee, at least five Business
Days before each interest payment date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of the Holders of Notes and
the Company will otherwise comply with TIA § 312(a).

Section 2.06 Transfer and Exchange.

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

		
	 	     (x)     to register the transfer of such Definitive Notes or
	 
	 	     (y)     to exchange such Definitive Notes for an equal principal amount
of Definitive Notes of other authorized denominations,

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

24

 

		
	 	     (i)     are duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar
or co-registrar, duly executed by the Holder thereof or its attorney duly
authorized in writing; and
	 
	 	     (ii)     if such Definitive Notes are required to bear a restricted
securities legend, they are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act, pursuant to
Section 2.06(b) hereof or pursuant to clause (A), (B) or (C) below, and
are accompanied by the following additional information and documents, as
applicable:

		
	 	     (A)     if such Definitive Notes are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect;
or
	 
	 	     (B)     if such Definitive Notes are being transferred to the
Company, a certification to that effect; or
	 
	 	     (C)     if such Definitive Notes are being transferred (x)
pursuant to an exemption from registration in accordance with Rule
144A, Regulation S or Rule 144 or (y) in reliance upon another
exemption from the requirements of the Securities Act: (1) a
certification to that effect (in the form set forth on the reverse
of the Note) and (2) if the Company so requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to
compliance with the restrictions set forth in the legend set forth
in Section 2.06(e)(i) hereof.

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

		
	 	     (i)     certification, in the form set forth on the reverse of the Note,
that such Definitive Note is either (A) being transferred to a QIB in
accordance with Rule 144A or (B) is being transferred after expiration of
the Distribution Compliance Period by a Person who initially purchased
such Note in reliance on Regulation S to a buyer who elects to hold its
interest in such Note in the form of a beneficial interest in the
Permanent Regulation S Global Security; and
	 
	 	     (ii)     written instructions directing the Trustee to make, or to
direct the Notes Custodian to make, an adjustment on its books and
records with respect to such Rule 144A Global Note (in the case of a
transfer pursuant to clause (b)(i)(A)) or Permanent Regulation S Global
Note (in the case of a transfer pursuant to clause (b)(i)(B)) to reflect
an increase in the aggregate principal amount of the Notes represented by
the Rule 144A Global Note or Permanent Regulation S Global Note, as
applicable, such instructions to contain information regarding the
Depositary account to be credited with such increase,

25

 

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

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

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

          (iii)     Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in Section 2.06(c)(v) hereof), a Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.

          (iv)     In the event that a Global Note is exchanged for Definitive Notes
pursuant to Section 2.06(c)(v) hereof, prior to the consummation of an Exchange
Offer or the effectiveness of a Shelf Registration Statement with respect to
such Notes, such Notes may be exchanged only in accordance with such procedures
as are substantially consistent with the provisions of this Section 2.06
(including the certification requirements set forth on the reverse of the
Initial Notes intended to ensure that such transfers comply with Rule 144A or
Regulation S, as the case may be) and such other procedures as may from time to
time be adopted by the Company.

26

 

           (v)     A Global Note deposited with the Depositary or with the Trustee as
Notes Custodian for the Depositary pursuant to Section 2.01 will be transferred
to the beneficial owners thereof in the form of Definitive Notes in an
aggregate principal amount equal to the principal amount of such Global Note,
in exchange for such Global Note, only if such transfer complies with Section
2.06 hereof and (A) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Note or if at any time such
Depositary ceases to be a “clearing agency” registered under the Exchange Act
and, in either case, a successor Depositary is not appointed by the Company
within 90 days of such notice, (B) an Event of Default has occurred and is
continuing or (C) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Notes under this
Indenture.

          Any Global Note that is transferable to the beneficial owners thereof
pursuant to this Section 2.06(c)(v) will be surrendered by the Depositary to
the Trustee located at its principal corporate trust office in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or from time to
time in part, without charge, and the Trustee will authenticate and deliver,
upon such transfer of each portion of such Global Note, an equal aggregate
principal amount of Definitive Notes of authorized denominations. Any portion
of a Global Note transferred pursuant to this Section 2.06(c)(v) will be
executed, authenticated and delivered only in denominations of $1,000 principal
amount and any integral multiple thereof and registered in such names as the
Depositary shall direct. Any Definitive Note delivered in exchange for an
interest in the Transfer Restricted Security will, except as otherwise provided
by Section 2.06(e) hereof, bear the restricted securities legend set forth in
Exhibit A hereto.

          (d)     Restrictions on Transfer of Temporary Regulation S Global Notes.
During the Distribution Compliance Period, beneficial ownership interests in a
Temporary Regulation S Global Note may only be sold, pledged or transferred
through Euroclear or Clearstream in accordance with the Applicable Procedures
and only (i) for interests in a Permanent Regulation S Global Note and then
only upon certification in form reasonably satisfactory to the Trustee that
beneficial ownership interests in such Temporary Regulation S Global Note are
owned either by Non-U.S. Persons or U.S. Persons who purchased such interests
in a transaction that did not require registration under the Securities Act or
(ii) for interests in a Rule 144A Global Note only if the transferor first
delivers to the Trustee a written certificate (in the form provided in this
Indenture) to the effect that the Notes are being transferred to a Person (A)
who the transferor reasonably believes to be a qualified institutional buyer
within the meaning of Rule 144A; (B) purchasing for its own account or the
account of a qualified institutional buyer in a transaction meeting the
requirements of Rule 144A; and (C) in accordance with all applicable securities
laws of the states of the United States and other jurisdictions.

          (e)      Legend.

		
	 	     (i)     Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Note certificate evidencing the Global Notes (and all Notes
issued in exchange therefor or in substitution thereof) will bear the
Private Placement Legend in substantially the following form:
	 
	 	THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),

27

 

		
	 	OR OTHER SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING ITS NOTE
IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE
WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR
OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF
THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE)
AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW
(THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A INSIDE THE UNITED STATES, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE AND THE
REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATION OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THE
NOTE IS COMPLETED AND DELIVERED BY THIS TRANSFEROR TO THE TRUSTEE. THIS
LEGEND

28

 

		
	 	WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “OFFSHORE
TRANSACTION,” “UNITED STATES” AN
D “U.S. PERSON” HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
	 
	 	     Each Global Note will also bear the Global Note Legend in
substantially the following form:
	 
	 	THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(c) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY.
	 
	 	     Each Definitive Note will also bear the following additional legend:
	 
	 	IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
	 
	 	     (ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
pursuant to Rule 144, the Registrar will permit the transferee thereof to
exchange such Transfer Restricted Security for a certificated Note that
does not bear the legend set forth above and rescind any restriction on
the transfer of such Transfer Restricted Security, if the transferor
thereof certifies in writing to the Registrar that such sale or transfer
was made in reliance on Rule 144 (such certification to be in the form
set forth on the reverse of the Note).
	 
	 	     (iii) After a transfer of any Initial Notes pursuant to and during
the period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Notes, all requirements pertaining to legends
relating to the restrictions on transfer relating to the Securities Act
on such Initial Note will cease to apply, the requirements requiring that
any such Initial Note issued to certain Holders be issued in global form
will cease to apply, and a certificated Initial Note or an Initial Note
in global form, in each case without restrictive transfer legends, will
be available to the transferee of the Holder of such Initial Notes upon
exchange of such transferring Holder’s certificated Initial Note or
appropriate directions to transfer such Holder’s interest in the Global
Note, as applicable.

29

 

		
	 	     (iv) Upon the consummation of an Exchange Offer with respect to the
Initial Notes, all requirements pertaining to such Initial Notes that
Initial Notes issued to certain Holders be issued in global form will
still apply with respect to Holders of such Initial Notes that do not
exchange their Initial Notes, and Exchange Notes in certificated or
global form, in each case without the restrictive securities legend
relating to the restrictions on transfer relating to the Securities Act
set forth in Exhibit A hereto will be available to Holders that exchange
such Initial Notes in such Exchange Offer.

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

          (g)     Obligations with Respect to Transfers and Exchanges of Securities.

		
	 	     (i)     To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee will authenticate Definitive Notes and
Global Notes at the Registrar’s or co-registrar’s request.
	 
	 	     (ii)     No service charge will be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge
payable in connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.15 and 9.05 of this
Indenture).
	 
	 	     (iii)     The Registrar or co-registrar will not be required to register
the transfer of or exchange of (a) any Definitive Note selected for
redemption in whole or in part pursuant to Article 3 of this Indenture,
except the unredeemed portion of any Definitive Note being redeemed in
part, or (b) any Note for a period beginning 15 Business Days before the
mailing of a notice of an offer to repurchase or redeem Notes or 15
Business Days before an interest payment date.
	 
	 	     (iv)     Prior to the due presentation for registration of transfer of
any Note, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Note is
registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Note and for all
other purposes whatsoever, whether or not such Note is overdue, and none
of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar will be affected by notice to the contrary.

30

 

		
	 	     (v)     All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled
to the same benefits under this Indenture as the Notes surrendered upon
such transfer or exchange.
	 
	 	     (h)     No Obligation of the Trustee.
	 
	 	     (i)     The Trustee will have no responsibility or obligation to any
beneficial owner of a Global Note, a Participant in the Depositary or
other Person with respect to the accuracy of the records of the
Depositary or its nominee or of any Participant, with respect to any
ownership interest in the Notes or with respect to the delivery to any
Participant, beneficial owner or other Person (other than the Depositary)
of any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Notes. All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Notes will be given or made only to or upon the order
of the registered Holders (which will be the Depositary or its nominee in
the case of a Global Note). The rights of beneficial owners in any
Global Note will be exercised only through the Depositary subject to the
applicable rules and procedures of the Depositary. The Trustee may rely
and will be fully protected in relying upon information furnished by the
Depositary with respect to its Participants and any beneficial owners.
	 
	 	     (ii)     The Trustee will have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or
among Participants or beneficial owners in any Global Note) other than to
require delivery of such certificates and other documentation or evidence
as are expressly required by, and to do so if and when expressly required
by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.

Section 2.07 Replacement Notes.

          If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company will issue and the Trustee, upon the written order of
the Company signed by one Officer of the Company, will authenticate a
replacement Note if the Trustee’s requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that
is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company and the Trustee may
charge for their expenses in replacing a Note.

          Every replacement Note is an additional obligation of the Company and will
be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

31

 

Section 2.08 Outstanding Notes.

          The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.

          If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.

          If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.

          If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay all principal, premium, if any, and interest payable on that date with
respect to the Notes, then on and after that date such Notes will be deemed to
be no longer outstanding and will cease to accrue interest.

Section 2.09 Treasury Notes.

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

Section 2.10 Temporary Notes.

          Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee will authenticate temporary Notes upon a written
order of the Company signed by one Officer of the Company. Temporary Notes
will be substantially in the form of Definitive Notes but may have variations
that the Company considers appropriate for temporary Notes and that are
reasonably acceptable to the Trustee. Without unreasonable delay, the Company
will prepare and the Trustee will authenticate Definitive Notes in exchange for
temporary Notes.

          Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.

Section 2.11 Cancellation.

          The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent will forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will cancel all Notes

32

 

surrendered for registration of transfer, exchange, payment, replacement
or cancellation and will destroy canceled Notes (subject to the record
retention requirement of the Exchange Act). Certification of the destruction of
all canceled Notes will be delivered to the Company. The Company may not issue
new Notes to replace Notes that it has redeemed, paid or delivered to the
Trustee for cancellation.

Section 2.12 Defaulted Interest.

          If the Company defaults in a payment of interest on the Notes, it will pay
the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
will be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or,
upon the written request of the Company, the Trustee in the name and at the
expense of the Company) will mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and the amount of
defaulted interest to be paid.

Section 2.13 CUSIP Numbers.

          The Company in issuing the Notes may use CUSIP numbers (if then generally
in use), and, if so, the Trustee will use CUSIP 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 Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption will not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.

Section 2.14 Issuance of Additional Notes.

          The Company will be entitled, subject to its compliance with Section 4.09
hereof, to issue Additional Notes under this Indenture with identical terms as
the Initial Notes issued on the Issue Date, other than with respect to the date
of issuance and issue price. The Initial Notes issued on the Issue Date, any
Additional Notes and all Exchange Notes issued in exchange therefor will be
treated as a single class for all purposes under this Indenture.

          With respect to any Additional Notes, the Company will set forth in a
resolution of the Board of Directors and an Officer’s Certificate, copies of
which will be delivered to the Trustee, the following information:

		
	 	     (i)     the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture;
	 
	 	     (ii)     the issue price, the issue date and the CUSIP number of such
Additional Notes; provided,  however, that no Additional Notes may be
issued at a price that would

33

 

		
	 	cause such Additional Notes to have “original issue discount” within
the meaning of Section 1273 of the Internal Revenue Code of 1986, as
amended; and

		
	 	     (iii)     whether such Additional Notes will be Transfer Restricted
Securities or will be issued in the form of Exchange Notes.

ARTICLE 3.

REDEMPTION AND PREPAYMENT

Section 3.01 Notices to Trustee.

          If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it will furnish to the Trustee, at least 45
days before a redemption date, an Officer’s Certificate setting forth (i) the
clause of this Indenture pursuant to which the redemption will occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed and (iv)
the redemption prices.

Section 3.02 Selection of Notes to be Redeemed or Purchased.

          If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows: (i) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed or (ii) if the Notes are not
so listed, on a pro rata basis, by lot or by such method as the Trustee deems
fair and appropriate; provided that no Notes of $1,000 or less shall be
redeemed in part.

          The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to
be redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, will be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.

Section 3.03 Notice of Redemption.

          Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company will mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the
notice is issued in connection with a defeasance of the Notes or a satisfaction
and discharge of this Indenture pursuant to Article 8 or 12 hereof. Notices of
redemption may not be conditional. Notes called for redemption become due on
the date fixed for redemption.

          The notice will identify the Notes to be redeemed (including CUSIP
Numbers, if any) and will state:

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	 	     (i)     the redemption date;

		
	 	     (ii)     the redemption price;

		
	 	     (iii)     if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;

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

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

		
	 	     (vi)     that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;

		
	 	     (vii)     the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and

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

          At the Company’s request, the Trustee will give the notice of redemption
in the Company’s name and at its expense; provided, however, that the Company
has delivered to the Trustee, at least 45 days prior to the redemption date, an
Officer’s Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.

Section 3.04 Effect of Notice of Redemption.

          Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.

Section 3.05 Deposit of Redemption or Purchase Price.

          Prior to 11:00 a.m. on the Business Day prior to the redemption date, the
Company will deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest on all Notes to
be redeemed or purchased on that date. The Trustee or the Paying Agent will
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest on, all Notes to be
redeemed or purchased.

          If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an

35

 

interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest will be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption or purchase is not so paid upon surrender for
redemption or purchase because of the failure of the Company to comply with the
preceding paragraph, interest will be paid on the unpaid principal, from the
redemption or purchase date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case at the
rate provided in the Notes and in Section 4.01 hereof.

Section 3.06 Notes Redeemed or Purchased in Part.

          Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and, upon the Company’s written request, the Trustee will
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.

Section 3.07 Optional Redemption.

          (a)     At any time prior to June 15, 2006, the Company may on any one or more
occasions redeem an aggregate of up to 35% of the aggregate principal amount of
Notes issued under this Indenture at a redemption price of 109.375% of the
principal amount, plus accrued and unpaid interest and Liquidated Damages, if
any, to the redemption date, with the net cash proceeds of one or more Equity
Offerings by the Company; provided that:

		
	 	     (i)     at least 65% of the aggregate principal amount of Notes issued
under this Indenture remains outstanding immediately after the occurrence
of such redemption (excluding Notes held by the Company and its
Subsidiaries); and

		
	 	     (ii)     the redemption occurs within 90 days of the date of the closing
of such Equity Offering.

          (b)     Except pursuant to Section 3.07(a) hereof, the Notes will not be
redeemable at the Company’s option prior to June 15, 2008.

          (c)     On and after June 15, 2008, the Company may redeem all or a part of
the Notes upon not less than 30 nor more than 60 days’ notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest and Liquidated Damages, if any, on the
Notes redeemed, to the applicable redemption date, if redeemed during the
twelve-month period beginning on June 15 of the years indicated below:

	 	 	 	 	 
	Year	 	Percentage
	2008
	 	 	104.688	%
	2009
	 	 	103.125	%
	2010
	 	 	101.563	%
	2011 and thereafter
	 	 	100.000	%

          (d)     Any redemption pursuant to this Section 3.07 will be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof.

36

 

Section 3.08 Mandatory Redemption.

          The Company is not required to make any mandatory redemption or sinking
fund payments with respect to the Notes.

Section 3.09 Offer to Purchase by Application of Excess Proceeds.

          In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an “Asset Sale
Offer”), it will follow the procedures specified below.

          The Asset Sale Offer will be made to all Holders and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets. The Asset Sale Offer will remain open
for a period of at least 20 Business Days following its commencement and not
longer than 30 Business Days, except to the extent that a longer period is
required by applicable law (the “Offer Period”). No later than five Business
Days after the termination of the Offer Period (the “Purchase Date”), the
Company will apply all Excess Proceeds (the “Offer Amount”) to the purchase of
Notes and such other pari passu Indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other Indebtedness tendered in response to the Asset Sale Offer. Payment for
any Notes so purchased will be made in the same manner as interest payments are
made.

          If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.

          Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders. The notice
will contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer will be
made to all Holders. The notice, which will govern the terms of the Asset Sale
Offer, will state:

		
	 	     (i)     that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
will remain open;

		
	 	     (ii)     the Offer Amount, the purchase price and the Purchase Date;

		
	 	     (iii)     that any Note not tendered or accepted for payment will
continue to accrue interest;

		
	 	     (iv)     that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer will cease to
accrue interest after the Purchase Date;

37

 

		
	 	     (v)     that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples
of $1,000 only;

		
	 	     (vi)     that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer will be required to surrender the Note, with the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;

		
	 	     (vii)     that Holders will be entitled to withdraw their election if
the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing its election to have such Note
purchased;

		
	 	     (viii)     that, if the aggregate principal amount of Notes and other
pari passu Indebtedness surrendered by Holders exceeds the Offer Amount,
the Company will select the Notes and other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Notes and
such other pari passu Indebtedness surrendered (with such adjustments as
may be deemed appropriate by the Company so that only Notes in
denominations of $1,000, or integral multiples thereof, will be
purchased); and

		
	 	     (ix)       that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).

          On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof and other pari passu Indebtedness tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has been
tendered, all Notes and other pari passu Indebtedness tendered, and will
deliver to the Trustee an Officer’s Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with
the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, will promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company will promptly issue a new
Note and the Trustee, upon written request from the Company, will authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal
to any unpurchased portion of the Note surrendered. Any Note not so accepted
will be promptly mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Asset Sale Offer on the
Purchase Date.

          Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 will be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

38

 

ARTICLE 4.

COVENANTS

Section 4.01 Payment of Notes.

          The Company will pay or cause to be paid the principal of, premium, if
any, interest and Liquidated Damages, if any, on the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, interest and
Liquidated Damages, if any, will be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company will pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.

          The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1.0% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it will pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
and Liquidated Damages (without regard to any applicable grace period) at the
same rate to the extent lawful.

Section 4.02 Maintenance of Office or Agency.

          The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company fails to maintain any such required office or agency or fails
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.

          The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York, 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 location of any such other office or agency.

          The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03
hereof.

39

 

Section 4.03 Reports.

          (a)     Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company will furnish to the trustee for
mailing to the Holders of Notes, within the time periods specified in the SEC’s
rules and regulations:

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

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

          If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
clause (i) above will include a reasonably detailed presentation, either on the
face of the financial statements or in the footnotes thereto, and in the
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” of the financial condition and results of operations of the
Company and its Restricted Subsidiaries separate from the financial condition
and results of operations of the Unrestricted Subsidiaries of the Company.

          (b)     Following the consummation of the Exchange Offer contemplated by the
Registration Rights Agreement, whether or not required by the SEC, the Company
will file a copy of all of the information and reports referred to in Sections
4.03(a)(i) and (ii) above with the SEC for public availability within the time
periods specified in the SEC’s rules and regulations (unless the SEC will not
accept such a filing) and make such information available to prospective
investors upon request. The Company will at all times comply with TIA §
314(a).

          (c)     The Company and the Guarantors will furnish to the Holders and to
prospective investors, upon the request of such Holders, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act
so long as the Notes are not freely transferable under the Securities Act.

Section 4.04 Compliance Certificate.

          (a)     The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) will deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officer’s 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 or her 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 of this Indenture (or, if a Default or
Event of Default has occurred, describing all such Defaults or Events of

40

 

Default of which he or she may have knowledge and what action the Company
is taking or proposes to take with respect thereto) and that to the best of his
or her knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal of or interest, if any, on the Notes
is prohibited or if such event has occurred, a description of the event and
what action the Company is taking or proposes to take with respect thereto.

          (b)     So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above will be accompanied by a
written statement of the Company’s independent public accountants (who will be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants will not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

          (c)     The Company will, so long as any of the Notes are outstanding, deliver
to the Trustee, promptly upon any Officer becoming aware of any Default or
Event of Default, an Officer’s Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.

Section 4.05 Taxes.

          The Company will pay, and will cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.

Section 4.06 Stay, Extension and Usury Laws.

          Each of the Company and the Guarantors 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,
that may affect the covenants or the performance of this Indenture; and each of
the Company and the Guarantors (to the extent that 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 4.07 Restricted Payments.

          (a)     The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company’s or any of
its Restricted Subsidiaries’ Equity Interests (including, without limitation,
any payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or

41

 

indirect holders of the Company’s or any of its Restricted Subsidiaries’
Equity Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of
the Company or to the Company or a Restricted Subsidiary of the Company); (ii)
purchase, redeem or otherwise acquire or retire for value (including without
limitation, in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company or any direct or indirect parent
of the Company; (iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value, any Indebtedness that
is subordinated to the Notes or the Subsidiary Guarantees, except a payment of
interest or principal at Stated Maturity thereof; or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i)
through (iv) above being collectively referred to as “Restricted Payments”);
unless, at the time of and after giving effect to such Restricted Payment:

		
	 	     (A)     no Default has occurred and is continuing or would occur
as a consequence of such Restricted Payment; and

		
	 	     (B)     the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.09 hereof; and

		
	 	     (C)     such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries since the Issue Date (excluding Restricted
Payments permitted by clauses (ii), (iii), (iv), (vi), (vii),
(viii), (ix) and (x) of Section 4.07(b) below), is less than the
sum, without duplication of:

		
	 	     (I)     50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the date of this Indenture to
the end of the Company’s most recently ended fiscal quarter for
which internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit), plus

		
	 	     (II)     100% of the fair market value of the aggregate net
proceeds received by the Company since the date of this Indenture
as a contribution to its common equity capital or from the issue or
sale of Equity Interests of the Company (other than Disqualified
Stock) or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable Disqualified
Stock or convertible or exchangeable debt securities of the Company
that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock or
debt securities) sold to a Subsidiary of the Company), provided
that such aggregate net proceeds are limited to assets used or
useful in a Permitted Business or Capital Stock of a Person engaged
in a Permitted Business, plus

42

 

		
	 	     (III)     to the extent that any Restricted Investment that was
made after the date of this Indenture is sold for cash or otherwise
liquidated or repaid, purchased or redeemed for cash, the lesser of
(x) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (y) the
initial amount of such Restricted Investment, plus

		
	 	     (IV)     the extent that any Unrestricted Subsidiary of the
Company is redesignated as a Restricted Subsidiary after the date
of this Indenture, the lesser of (x) the fair market value of the
Company’s Investment in such Subsidiary as of the date of such
redesignation and (y) the fair market value of the Company’s
Investment in such Subsidiary as of the date on which such
Subsidiary was originally designated as an Unrestricted Subsidiary.

          (b)     The provisions of Section 4.07(a) will not prohibit: (i) the payment
of any dividend or the consummation of any irrevocable redemption within 60
days after the date of declaration of the dividend or giving of the redemption
notice, as the case may be, if at said date of declaration or notice, such
dividend or redemption payment would have complied with the provisions of this
Indenture; (ii) the making of any Restricted Payment in exchange for, or out of
the net cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests of the Company (other than any
Disqualified Stock) or from the substantially concurrent cash contribution of
common equity capital to the Company; provided that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition will be excluded from clause
(C)(II) of Section 4.07(a) above; (iii) the defeasance, redemption, repurchase
or other acquisition of subordinated Indebtedness of the Company or any
Guarantor with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; (iv) so long as no Default or Event of Default has
occurred and is continuing, the payment of any dividend by a Restricted
Subsidiary of the Company to holders of its Equity Interests on a pro rata
basis; (v) so long as no Default or Event of Default has occurred and is
continuing, the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary of
the Company held by any current or former director, officer or employee of the
Company (or any of its Restricted Subsidiaries) pursuant to any equity
subscription agreement, stock option agreement, shareholders’ agreement or
similar agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests may not in any
calendar year exceed the lesser of (A) the sum of (x) $2.0 million and (y) the
aggregate amount of Restricted Payments permitted (but not made) pursuant to
this clause (v) in prior calendar years and (B) $7.5 million; (vi) the
repurchase of Equity Interests deemed to occur upon the exercise of stock
options to the extent such Equity Interests represent a portion of the exercise
price of those stock options; (vii) the declaration and payment of dividends to
holders of any class or series of Disqualified Stock of the Company or any
Restricted Subsidiary of the Company issued on or after the date of this
Indenture in accordance with the Fixed Charge Coverage Ratio test described in
Section 4.09(a) hereof to the extent such dividends are included in the
definition of Fixed Charges; provided that no Default or Event of Default shall
have occurred and be continuing immediately after making such Restricted
Payment; (viii) so long as no Default or Event of Default has occurred and is
continuing, the purchase by the Company of fractional shares arising out of
stock dividends, splits or combinations or business combinations; (ix)
dividends, distributions or advances to the Parent to pay the fees required to
maintain its

43

 

corporate existence and to pay for general corporate and overhead expenses
(including salaries and other compensation of employees who perform services
for both the Parent and the Company) incurred by the Parent in the ordinary
course of its business not to exceed $1.0 million in any twelve-month period;
(x) dividends, distributions or advances to the Parent to be used by the Parent
to pay Federal, state and local taxes payable by the Parent and attributable to
(or arising as a result of) the operations of the Company and its Subsidiaries;
provided, however, that the amount of such dividends will not exceed the amount
that the Company and its Subsidiaries would be required to pay in respect of
such Federal, state or local taxes were the Company to pay such taxes as a
stand-alone taxpayer; and (xi) so long as no Default or Event of Default has
occurred and is continuing, other Restricted Payments in an aggregate amount
since the date of this Indenture not to exceed $20.0 million.

          The amount of all Restricted Payments (other than cash) will be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be
valued by this Section 4.07 will be determined by the Board of Directors, whose
good faith determination will be conclusive and will be delivered to the
Trustee. The Board of Directors’ determination must be based upon an opinion
or appraisal issued by an accounting, appraisal or investment banking firm of
national standing if the fair market value exceeds $15.0 million. Not later
than the date of making any Restricted Payment, the Company will deliver to the
Trustee an Officer’s Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed, together with a copy of any fairness opinion
or appraisal required by this Indenture.

Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

          (a)     The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to:

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

		
	 	     (ii)     make loans or advances to the Company or any of its Restricted
Subsidiaries; or

		
	 	     (iii)     transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.

          (b)     The restrictions in Section 4.08(a) above will not apply to
encumbrances or restrictions existing under or by reason of:

		
	 	     (i)     agreements governing Existing Indebtedness and Credit Facilities
as in effect on the date of this Indenture and any amendments,
modifications, restatements, renewals, increases, supplements,
refundings, restructurings, replacements or

44

 

		
	 	refinancings of those agreements; provided that such amendments,
modifications, restatements, renewals, increases, supplements,
refundings, restructurings, replacements or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and payment
restrictions than those contained in those agreements on the date of this
Indenture;

		
	 	     (ii)     this Indenture, the Notes and the Subsidiary Guarantees;

		
	 	     (iii)     applicable law, rule, regulation or order;

		
	 	     (iv)     any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as
in effect at the time of such acquisition or assumed by the Company or
any of its Restricted Subsidiaries in connection with an acquisition of
all or substantially all of the assets of a Person (except to the extent
such Indebtedness was incurred or such Capital Stock was issued or
assumed in connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case
of Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;

		
	 	     (v)     customary non-assignment provisions in leases, licenses or
similar contracts entered into in the ordinary course of business and
consistent with past practices;

		
	 	     (vi)     purchase money obligations for property acquired in the
ordinary course of business and Capital Lease Obligations permitted under
this Indenture that impose restrictions of the nature described in
Section 4.08(a)(iii) above on the property purchased or leased;

		
	 	     (vii)     any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;

		
	 	     (viii)     Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness
being refinanced;

		
	 	     (ix)     Liens securing Indebtedness otherwise permitted to be incurred
under Section 4.12 hereof that limit the right of the debtor to dispose
of the assets subject to such Liens;

		
	 	     (x)     provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
sale-leaseback agreements, stock sale agreements and other similar
agreements entered into in the ordinary course of business;

45

 

		
	 	     (xi)     any such encumbrance or restriction with respect to a Foreign
Subsidiary pursuant to an agreement governing Indebtedness incurred by
such Foreign Subsidiary that was permitted by the terms of this Indenture
to be incurred; and

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

Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.

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

          (b)     The provisions of the first paragraph of this Section 4.09 will not
prohibit the incurrence of any of the following items of Indebtedness
(collectively, “Permitted Debt”):

		
	 	     (i)     the incurrence by the Company and/or any Guarantor of additional
Indebtedness and Letters of Credit under one or more Credit Facilities in
an aggregate principal amount at any one time outstanding under this
clause (i) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Subsidiaries thereunder), not to exceed $415.0 million* less the sum of
all permanent principal payments with respect to such Indebtedness
pursuant to Section 4.10 hereof;

		
	 	     (ii)     the incurrence by the Company and its Restricted Subsidiaries
of the Existing Indebtedness;

		
	 	     (iii)     the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Subsidiary
Guarantees to be issued on the date of this Indenture and the Exchange
Notes and the related Subsidiary Guarantees to be issued pursuant to the
Registration Rights Agreement;

	*	 	This amount is intentionally less than the sum of the $350.0 million of term
loan borrowings and $75.0 million of revolving credit borrowings available
under the Credit Agreement on the date of this Indenture.

46

 

		
	 	     (iv)     the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price or
cost of design, construction, installation or improvement of property,
plant or equipment used in the business of the Company or such Restricted
Subsidiary, in an aggregate principal amount, including all Permitted
Refinancing Indebtedness then outstanding incurred to refund, refinance
or replace any other Indebtedness incurred pursuant to this clause (iv),
not to exceed $10.0 million at any time outstanding;

		
	 	     (v)     the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace,
Indebtedness (other than intercompany Indebtedness) that was permitted by
this Indenture to be incurred under Section 4.09(a) hereof or clauses
(ii), (iii) or (iv) of this Section 4.09(b);

		
	 	     (vi)     the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided, however, that (A) if
the Company or any Guarantor is the obligor on such Indebtedness, such
Indebtedness must be expressly subordinated to the prior payment in full
in cash of all Obligations then due with respect to the Notes, in the
case of the Company, or the Subsidiary Guarantee, in the case of a
Guarantor, and (B)(1) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or one of its Restricted Subsidiaries and (2) any
sale or other transfer of any such Indebtedness to a Person that is not
either the Company or one of its Restricted Subsidiaries shall be deemed,
in each case, to constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (vi);

		
	 	     (vii)     the issuance by any of the Company’s Restricted Subsidiaries
to the Company or any of its Restricted Subsidiaries of shares of
preferred stock, provided that (A) any subsequent issuance or transfer of
Equity Interests that results in any such preferred stock being held by a
Person other than the Company or a Restricted Subsidiary of the Company
and (B) any sale or other transfer of any such preferred stock to a
Person that is not either the Company or a Restricted Subsidiary of the
Company will be deemed, in each case, to constitute an issuance of
preferred stock by the Company or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (vii);

		
	 	     (viii)     the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations;

		
	 	     (ix)     the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or any Guarantor that was permitted to be
incurred by another provision of this Section 4.09;

		
	 	     (x)     the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional

47

 

		
	 	Indebtedness with the same terms and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness
or an issuance of Disqualified Stock for purposes of this Section 4.09;
provided, in each such case, that the amount thereof is included in the
Fixed Charges of the Company as accrued;

		
	 	     (xi)     the incurrence by the Company’s Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event
will be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (xi);

		
	 	     (xii)     the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in respect of workers’ compensation claims,
self-insurance obligations, bankers’ acceptances, performance and surety
bonds in the ordinary course of business;

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

		
	 	     (xiv)     the incurrence by Foreign Subsidiaries of Indebtedness in an
aggregate principal amount (or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, defease, renew, extend, refinance or replace any Indebtedness
incurred pursuant to this clause (xiv), not to exceed $15.0 million; and

		
	 	     (xv)     the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (xv), not to
exceed $25.0 million.

          (c)     For purposes of determining compliance with this Section 4.09, in the
event that an item of Indebtedness (including Acquired Debt) meets the criteria
of more than one of the categories of Permitted Debt described in clauses (i)
through (xv) of Section 4.09(b) above or is entitled to be incurred pursuant to
Section 4.09(a) hereof, the Company will be permitted to divide and classify
(or later classify or reclassify) in whole or in part, in its sole discretion,
such item of Indebtedness in any manner that complies with this Section 4.09.

Section 4.10 Asset Sales.

          (a)     The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:

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

48

 

		
	 	     (ii)     the fair market value is determined by the Company’s Board of
Directors and evidenced by a resolution of the Board of Directors set
forth in an Officer’s Certificate delivered to the Trustee; and

		
	 	     (iii)     at least 75% of the consideration therefor received by the
Company or such Restricted Subsidiary, as the case may be, consists of
cash.

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

		
	 	     (A)     any liabilities, as shown on the Company’s or such
Restricted Subsidiary’s most recent consolidated balance sheet, of
the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to
the Notes or any Subsidiary Guarantee) that are assumed by the
transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary
from further liability;

		
	 	     (B)     any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are contemporaneously, subject to ordinary settlement periods,
converted by the Company or such Restricted Subsidiary into cash,
to the extent of the cash received in that conversion; and

		
	 	     (C)     any stock or assets of the kind referred to in clauses
(ii) or (iv) of Section 4.10(b) hereof.

          (b)     Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company (or the applicable Restricted Subsidiary, as the case may be)
may apply such Net Proceeds, at its option:

		
	 	     (i)     to repay Senior Debt and, if the Senior Debt repaid is revolving
Indebtedness, to correspondingly reduce commitments with respect thereto;

		
	 	     (ii)     to acquire (or enter into a binding agreement to acquire;
provided that such commitment will be subject only to customary
conditions (other than financing) and such acquisition will be
consummated within 90 days after the end of such 360-day period) all or
substantially all of the assets of, or a majority of the Voting Stock of,
another Permitted Business;

		
	 	     (iii)     to make a capital expenditure; or

		
	 	     (iv)     to acquire (or enter into a binding agreement to acquire;
provided that such commitment will be subject only to customary
conditions (other than financing) and such acquisition will be
consummated within 90 days after the end of such 360-day period) other
long-term assets that are used or useful in a Permitted Business.

49

 

          Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture.

          (c)     Any Net Proceeds from Asset Sales that are not applied or invested as
provided in Section 4.10(b) hereof will constitute “Excess Proceeds”. When the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will
make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets in accordance with Section 3.09 hereof to
purchase the maximum principal amount of Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer will be equal to 100% of principal amount plus accrued
and unpaid interest and Liquidated Damages, if any, to the date of purchase,
and will be payable in cash. If any Excess Proceeds remain after consummation
of an Asset Sale Offer, the Company may use such Excess Proceeds for any
purpose not otherwise prohibited by this Indenture. If the aggregate principal
amount of Notes and other pari passu Indebtedness tendered into such Asset Sale
Offer exceeds the amount of Excess Proceeds, the Trustee will select the Notes
and other pari passu Indebtedness to be purchased on a pro rata basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds will be
reset at zero.

Section 4.11 Transactions with Affiliates.

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

		
	 	     (i)     such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person; and

		
	 	     (ii)     the Company delivers to the Trustee:

		
	 	     (A)     with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a resolution of the Board of Directors set
forth in an Officer’s Certificate certifying that such Affiliate
Transaction complies with this Section 4.11(a) and that such
Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors; and

		
	 	     (B)     with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $15.0 million, a written opinion from an independent
investment banking, accounting or appraisal firm of nationally
recognized standing to the effect that such Affiliate

50

 

		
	 	Transaction is fair, from a financial standpoint, to the
Company and its Restricted Subsidiaries or not materially less
favorable to the Company and its Restricted Subsidiaries than could
reasonably be expected to be obtained at the time in an arm’s
length transaction with a Person who was not an Affiliate.

          (b)     The foregoing provisions will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of Section
4.11(a) hereof:

		
	 	     (i)     any employment agreements or arrangements, employee benefit plan
or arrangements, officer and director indemnification agreements or
arrangements or other similar agreements or arrangements entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course
of business;

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

		
	 	     (iii)     transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in, or controls, such
Person;

		
	 	     (iv)     payment of reasonable directors fees and indemnity provided on
behalf of officers, directors or employees of the Company or any of its
Restricted Subsidiaries;

		
	 	     (v)     any issuance or sale of Equity Interests (other than
Disqualified Stock) to Affiliates of the Company;

		
	 	     (vi)     Restricted Payments that are permitted by Section 4.07 hereof;

		
	 	     (vii)     transactions between the Company and any Person, a director of
which is also a director of the Company; provided, however, that such
director abstains from voting as a director of the Company on any matter
involving such other Person; and

		
	 	     (viii)     (A) payment of $10.0 million to be made to TC Group, L.L.C.
upon consummation of the Acquisition and (B) amounts payable to TC Group,
L.L.C. pursuant to the management agreement, as in effect on the closing
date of the Acquisition and on the terms described in the offering
memorandum dated June 6, 2003, between the Company and TC Group, L.L.C.
or pursuant to any amendment, restatement or replacement thereof to the
extent that the terms of any such amendment, restatement or replacement
are not, taken as a whole, disadvantageous to the Holders of the Notes in
any material respect, provided that any payments pursuant to this clause
(B) in excess of $2.0 million per year, plus reasonable out-of-pocket
expenses incurred by TC Group, L.L.C. in connection with its performance
of management or other services under such management agreement, shall be
subject to the first paragraph of this Section 4.11.

Section 4.12 Liens.

          The Company will not and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or otherwise cause or suffer to
exist or become effective any Lien of any kind (other than Permitted Liens)
securing Indebtedness, Attributable Debt or trade

51

 

payables upon any of their property or assets, now owned or hereafter
acquired, unless all payments due under this Indenture and the Notes are
secured on an equal and ratable basis with the Obligations so secured until
such time as such Obligations are no longer secured by a Lien.

Section 4.13 Business Activities.

          The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.

Section 4.14 Corporate Existence.

          Subject to Article 5 hereof, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company will
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors determines 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 of the Notes.

Section 4.15 Offer to Repurchase upon Change of Control.

          (a)     Upon the occurrence of a Change of Control, each Holder of Notes will
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder’s Notes pursuant to the
offer described below (the “Change of Control Offer”) at an offer price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (the
“Change of Control Payment”). Within 30 days following any Change of Control,
the Company will mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on the date specified in such notice, which date will be no earlier than
30 days and no later than 60 days from the date such notice is mailed (the
“Change of Control Payment Date”). Such notice, which will govern the terms of
the Change of Control Offer, will state: (i) that the Change of Control Offer
is being made pursuant to this Section 4.15 and that all Notes tendered will be
accepted for payment; (ii) the purchase price and the purchase date; (iii) that
any Note not tendered will continue to accrue interest; (iv) that, unless the
Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest after the Change of Control Payment Date; (v) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled “Option of Holder to
Elect Purchase” on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (vi) that Holders
will be entitled to withdraw their election if the Paying Agent receives, not
later than the

52

 

close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (vii) that Holders whose Notes are being
purchased only in part will be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple thereof.
The Company will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of Notes
as a result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of Section 3.09 or
4.15 hereof, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under
Section 3.09 hereof or this Section 4.15 by virtue of such conflict.

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

		
	 	     (i)     accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;

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

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

The Paying Agent will promptly mail to each Holder of Notes properly tendered
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.

          (c)     Prior to complying with any of the provisions of this Section 4.15,
but in any event within 90 days following a Change of Control, the Company will
either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this Section 4.15.

          (d)     Notwithstanding anything to the contrary in this Section 4.15, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the manner,
at the times and otherwise in compliance with the requirements set forth in
Section 3.09 hereof and this Section 4.15 and purchases all Notes properly
tendered and not withdrawn under the Change of Control Offer or (2) a notice of
redemption is outstanding pursuant to Section 3.07 hereof, unless and until
there is a default in payment of the applicable redemption
price.

53

 

Section 4.16 No Senior Subordinated Debt.

          The Company will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt of the Company and senior in any respect in right of
payment to the Notes. No Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate
or junior in right of payment to any Senior Debt of such Guarantor and senior
in any respect in right of payment to such Guarantor’s Subsidiary Guarantee.
No such Indebtedness will be considered to be senior by virtue of being secured
on a first or junior priority basis.

Section 4.17 Payments for Consent.

          The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver
or amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.

Section 4.18 Additional Subsidiary Guarantees.

          If the Company or any of its Restricted Subsidiaries acquires or creates
another Domestic Subsidiary after the date of this Indenture that has a book
value in excess of $1.0 million, then that newly acquired or created Subsidiary
will become a Guarantor and execute a supplemental indenture substantially in
the form of Exhibit B hereto (and the Form of Notation on Senior Subordinated
Note, attached hereto as Exhibit C) and deliver an opinion of counsel
satisfactory to the Trustee within 10 Business Days of the date on which it was
acquired or created; provided, however, that this Section 4.18 will not apply
to all Subsidiaries that have properly been designated as Unrestricted
Subsidiaries in accordance with this Indenture for so long as they continue to
constitute Unrestricted Subsidiaries.

Section 4.19 Designation of Restricted and Unrestricted Subsidiaries.

          The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default; provided
that in no event will any business currently operated by the Company’s
Subsidiaries on the date of this Indenture be transferred to or held by an
Unrestricted Subsidiary. If a Restricted Subsidiary is designated as an
Unrestricted Subsidiary, the aggregate fair market value of all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary properly designated will be deemed to be an Investment made as of
the time of the designation and will reduce the amount available for Restricted
Payments under Section 4.07 hereof or under one or more clauses of the
definition of Permitted Investments, as determined by the Company. That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation
would not cause a Default.

54

 

ARTICLE 5.

SUCCESSORS

Section 5.01 Merger, Consolidation or Sale of Assets.

          The Company will not, directly or indirectly, (a) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation) or (b) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person, unless:

		
	 	     (i)     either (A) the Company is the surviving corporation or (B) the
Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance
or other disposition has been made is a corporation organized or existing
under the laws of the United States, any state of the United States or
the District of Columbia;

		
	 	     (ii)     the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made
assumes all the obligations of the Company under the Notes, this
Indenture and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;

		
	 	     (iii)     immediately after such transaction, no Default or Event of
Default exists; and

		
	 	     (iv)     the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition has been made
will, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness under the
Fixed Charge Coverage Ratio test in Section 4.09(a) hereof.

          The Company will not, directly or indirectly, lease all or substantially
all of its properties or assets, in one or more related transactions, to any
other Person.

          Notwithstanding the foregoing:

		
	 	     (A)     the Company may merge with an Affiliate incorporated
solely for the purpose of reincorporating the Company in another
jurisdiction; and

		
	 	     (B)     any Restricted Subsidiary of the Company may consolidate
with, merge into or transfer all or part of its properties and
assets to the Company or to a Subsidiary that is a Guarantor.

55

 

Section 5.02 Successor Corporation Substituted.

          Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made will succeed to, be substituted for (so that from and after
the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the “Company” will
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company will not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company’s assets in a transaction that meets the
requirements of Section 5.01 hereof.

ARTICLE 6.

DEFAULTS AND REMEDIES

Section 6.01 Events of Default.

          An “Event of Default” occurs if:

		
	 	     (i)     the Company defaults in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Notes and such default
continues for a period of 30 days (whether or not prohibited by the
subordination provisions of this Indenture);

		
	 	     (ii)     the Company defaults in the payment when due of the principal
of or premium, if any, on the Notes (whether or not prohibited by the
subordination provisions of this Indenture);

		
	 	     (iii)     the Company or any of its Restricted Subsidiaries fails to
comply with any of the provisions of Section 4.10, 4.15 or 5.01 hereof;

		
	 	     (iv)     the Company or any of its Restricted Subsidiaries for 30 days
after notice fails to comply with any of the provisions of Section 4.07
or 4.09 hereof;

		
	 	     (v)     the Company or any of its Restricted Subsidiaries fails to
observe or perform any other covenant or other agreement in this
Indenture or the Notes for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding;

		
	 	     (vi)     a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), whether such Indebtedness
or guarantee now exists, or is created after the date of this Indenture,
which default:

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	 	     (A)     is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such
default (a “Payment Default”) or

		
	 	     (B)     results in the acceleration of such Indebtedness prior to
its Stated Maturity,

		
	 	     and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $25.0 million or more;

		
	 	     (vii)     the Company or any of its Restricted Subsidiaries is subject
to final judgments aggregating in excess of $25.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days;

		
	 	     (viii)     except as permitted by this Indenture, any Subsidiary
Guarantee is held in any judicial proceeding to be unenforceable or
invalid or ceases for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, denies or
disaffirms its obligations under its Subsidiary Guarantee;

		
	 	     (ix)     the Company or any of its Significant Subsidiaries or any group
of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:

		
	 	     (A)     commences a voluntary case,

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

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

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

		
	 	     (E)     generally is not paying its debts as they become due; or

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

		
	 	     (A)     is for relief against the Company or any of its
Significant Subsidiaries or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary
in an involuntary case;

		
	 	     (B)     appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary
or for all or substantially all of the property of

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	 	the Company or any of its Significant Subsidiaries or any
group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary; or

		
	 	     (C)     orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary;

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

Section 6.02 Acceleration.

          In the case of an Event of Default specified in clause (ix) or (x) of
Section 6.01 hereof, with respect to the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary,
all outstanding Notes will become due and payable immediately without further
action or notice. If any other Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.

          However, a Default under clause (iv) or (v) above will not constitute an
Event of Default until the trustee or the Holders of 25% in principal amount of
the outstanding notes notify the Company of the Default and the Company does
not cure such Default within the time specified after receipt of such notice.

          In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of the Company with the
intention of avoiding payment of the premium that the Company would have had to
pay if the Company then had elected to redeem the notes pursuant to Section
3.07 hereof, an equivalent premium will also become and be immediately due and
payable to the extent permitted by law upon the acceleration of the Notes. If
an Event of Default occurs prior to June 15, 2008 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Notes prior to
that date, then the premium specified in this Indenture with respect to the
first year that the Notes may be redeemed at the Company’s option will also
become immediately due and payable to the extent permitted by law upon the
acceleration of the Notes.

Section 6.03 Other Remedies.

          If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and
Liquidated Damages, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

          The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default will not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.

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Section 6.04 Waiver of Past Defaults.

          Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium or Liquidated Damages, if any, or interest
on the Notes, including in connection with an offer to purchase; provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration, if
the rescission would not conflict with any judgment and decree and if all
existing Events of Default have been cured or waived. Upon any such waiver,
such Default will cease to exist, and any Event of Default arising therefrom
will be deemed to have been cured for every purpose of this Indenture; but no
such waiver will extend to any subsequent or other Default or impair any right
consequent thereon.

Section 6.05 Control by Majority.

          Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or that may involve
the Trustee in personal liability.

Section 6.06 Limitation on Suits.

          A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:

          (a)     the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;

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

          (c)     such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;

          (d)     the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and

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

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

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Section 6.07 Rights of Holders of Notes to Receive Payment.

          Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or
to bring suit for the enforcement of any such payment on or after such
respective dates, will not be impaired or affected without the consent of such
Holder.

Section 6.08 Collection Suit by Trustee.

          If an Event of Default specified in Section 6.01(i) or (ii) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as will be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09 Trustee May File Proofs of Claim.

          The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property
and will be entitled and empowered to collect, receive and distribute any money
or other property payable or deliverable on any such claims and any custodian
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 consents to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof
out of the estate in any such proceeding, is denied for any reason, payment of
the same will be secured by a Lien on, and will be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained will be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.

Section 6.10 Priorities.

          If the Trustee collects any money pursuant to this Article 6, it will pay
out the money in the following order:

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	 	     First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;

		
	 	     Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and
Liquidated Damages, if any, and interest, respectively; and

		
	 	     Third: to the Company or to such party as a court of competent
jurisdiction directs.

          The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.

Section 6.11 Undertaking for Costs.

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

ARTICLE 7.

TRUSTEE

Section 7.01 Duties Of Trustee.

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

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

		
	 	     (i)     the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations will be read into this
Indenture against the Trustee; and

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

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          (c)     The Trustee may not be relieved from liabilities 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 Section 7.01(b)
hereof;

		
	 	     (ii)     the Trustee will 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; and

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

          (d)     Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to Section 7.01(a),
(b) and (c) hereof.

          (e)     No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.

          (f)     The Trustee will 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.

Section 7.02 Rights Of Trustee.

          (a)     The Trustee may conclusively rely 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 such document.

          (b)     Before the Trustee acts or refrains from acting, it may require an
Officer’s Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel will be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

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

          (d)     The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.

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          (e)     Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company will be sufficient if signed by
an Officer of the Company.

          (f)     The Trustee will 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 unless such Holders will have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.

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

          (h)     In the event the Trustee receives inconsistent or conflicting requests
and indemnity from two or more groups of Holders of Notes, each representing
less than a majority in aggregate principal amount of the Notes outstanding,
pursuant to the provisions of this Indenture, the Trustee, in its sole
discretion, may determine what action, if any, will be taken.

          (i)     The rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and will be enforceable by, the Trustee in connection with the
performance of its duties under this Indenture, and to each agent, custodian
and other Person employed to act hereunder.

Section 7.03 Individual Rights of Trustee.

          The Trustee or any Affiliate of the Trustee in its individual or any other
capacity may become the owner or pledgee of Notes and may otherwise deal with
the Company or any Affiliate of the Company with the same rights it would have
if it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest, it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.

Section 7.04 Trustee’s Disclaimers.

          The Trustee will not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it will not be
accountable for the Company’s use of the proceeds from the Notes or any money
paid to the Company or upon the Company’s direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee and it will not be
responsible for any statement or recital herein or any statement in the Notes
or any other document in connection with the sale of the Notes or pursuant to
this Indenture other than its certificate of authentication.

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Section 7.05 Notice of Defaults.

          If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium or
Liquidated Damages, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.

Section 7.06 Reports by Trustee to Holders of the Notes.

          (a)     Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee will mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA § 313(a) (but if no event described in
TIA § 313(a) has occurred within the 12 months preceding the reporting date, no
report need be transmitted). The Trustee also will comply with TIA §
313(b)(2). The Trustee will also transmit by mail all reports as required by
TIA § 313(c).

          (b)     A copy of each report at the time of its mailing to the Holders of
Notes will be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA § 313(d). The
Company will promptly notify the Trustee when the Notes are listed on any stock
exchange.

Section 7.07 Compensation and Indemnity.

          (a)     The Company will pay to the Trustee from time to time such
compensation as the Company and the Trustee from time to time have agreed in
writing for its acceptance of this Indenture and services hereunder. The
Trustee’s compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred
or made by it in addition to the compensation for its services. Such expenses
will include the reasonable compensation, disbursements and expenses of the
Trustee’s agents and counsel.

          (b)     The Company will indemnify the Trustee or any predecessor Trustee
against any and all losses, liabilities or expenses, including taxes (except
for taxes based upon the income of the Trustee), incurred by it arising out of
or in connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors, any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its gross negligence or
bad faith. The Trustee will notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company will
not relieve the Company or any of its Guarantors of its obligations hereunder.
The Company or such Guarantor will defend the claim and the Trustee will
cooperate in the defense. The Trustee may have separate counsel and the Company
will pay the reasonable fees and

64

 

expenses of such counsel. The Company or any of the Guarantors need not
pay for any settlement made without their consent, which consent will not be
unreasonably withheld.

          (c)     The obligations of the Company and the Guarantors under this Section
7.07 will survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee.

          (d)     To secure the Company’s payment obligations in this Section 7.07, the
Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.

          (e)     When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(ix) or (x) hereof occurs, the expenses and
the compensation for such services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.

          (f)     The Trustee will comply with the provisions of TIA § 313(b)(2) to the
extent applicable.

Section 7.08 Replacement of Trustee.

          (a)     A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.08.

          (b)     The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:

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

		
	 	     (ii)     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;

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

		
	 	     (iv)     the Trustee becomes incapable of acting.

          (c)     If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will 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 Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.

          (d)     If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the Company’s
expense), the Company, or

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the Holders of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.

          (e)     If the Trustee, after written request by any Holder of a Note who has
been a Holder for at least six months, fails to comply with Section 7.10
hereof, such Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

          (f)     A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its
succession to Holders of the Notes. The retiring Trustee will promptly transfer
all property held by it as Trustee to the successor Trustee, provided that all
sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company’s obligations under Section 7.07
hereof will continue for the benefit of the retiring Trustee.

Section 7.09 Successor Trustee by Merger, etc.

          If the Trustee consolidates, 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 will be the successor Trustee.

Section 7.10 Eligibility; Disqualification.

          There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.

          This Indenture will always have a Trustee who satisfies the requirements
of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).

Section 7.11 Preferential Collection of Claims against Company.

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

ARTICLE 8.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.

          The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officer’s Certificate, at any time, elect to have
either Section 8.02 or

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8.03 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 8.

Section 8.02 Legal Defeasance and Discharge.

          Upon the Company’s exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from its obligations with respect to all
outstanding Notes (including the Subsidiary Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).
For this purpose, Legal Defeasance means that the Company and the Guarantors
will be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Notes (including the Subsidiary Guarantees), which will
thereafter be deemed to be “outstanding” only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in clauses (i) and
(ii) below, and to have satisfied all its other obligations under such Notes,
the Subsidiary Guarantees and this Indenture (and the Trustee, on demand of and
at the expense of the Company, will execute proper instruments acknowledging
the same), except for the following provisions which will survive until
otherwise terminated or discharged hereunder:

		
	 	     (i)     the rights of Holders of outstanding Notes to receive solely
from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of,
premium and Liquidated Damages, if any, and interest on such Notes when
such payments are due;

		
	 	     (ii)     the Company’s obligations with respect to such Notes under
Sections 2.06, 2.07, 2.10 and 4.02 hereof;

		
	 	     (iii)     the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company’s and the Guarantors’ obligations in
connection therewith and

		
	 	     (iv)     this Section 8.02.

Subject to compliance with this Article 8, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.

Section 8.03 Covenant Defeasance.

          Upon the Company’s exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from its obligations under Sections 4.03, 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.18 and 4.19 and Article 5 hereof with respect
to the outstanding Notes on and after the date the conditions set forth below
are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will
thereafter be deemed not “outstanding” for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
“outstanding” for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes
and Subsidiary Guarantees, the Company and the

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Guarantors may omit to comply with and will have no liability in respect
of any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply will not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes and
Subsidiary Guarantees will be unaffected thereby. In addition, upon the
Company’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(iii) through 6.01(vii) hereof will not
constitute Events of Default.

Section 8.04 Conditions to Legal or Covenant Defeasance.

          In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:

		
	 	     (i)     the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
investment bank or firm of independent public accountants, to pay the
principal of, premium and Liquidated Damages, if any, and interest on the
outstanding Notes on the Stated Maturity or on the applicable redemption
date, as the case may be, and the Company must specify whether the Notes
are being defeased to maturity or to a particular redemption date;

		
	 	     (ii)     in the case of an election under Section 8.02 hereof, the
Company will deliver to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change
in the applicable federal income tax law; in either case to the effect
that, and based thereon such Opinion of Counsel will confirm that, the
Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;

		
	 	     (iii)     in the case of an election under Section 8.03 hereof, the
Company will deliver to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had
not occurred;

		
	 	     (iv)     no Default or Event of Default has occurred and is continuing
on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);

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	 	     (v)     such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;

		
	 	     (vi)     the Company will deliver to the Trustee an Opinion of Counsel
to the effect that, assuming, among other things, no intervening
bankruptcy of the Company between the date of deposit and the 91st day
following the deposit and assuming that no Holder is an “insider” of the
Company under applicable bankruptcy law, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally;

		
	 	     (vii)     the Company will deliver to the Trustee an Officer’s
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company; and

		
	 	     (viii)     the Company will deliver to the Trustee an Officer’s
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to Legal Defeasance or Covenant
Defeasance have been complied with.

Section 8.05 Deposited Money and Government Securities to be held in Trust;
Other Miscellaneous Provisions.

          Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
“Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds
except to the extent required by law.

          The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

          Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section

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8.04(i) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.

Section 8.06 Repayment to Company.

          Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium and
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, premium and Additional Amounts, if any, or
interest has become due and payable will be paid to the Company on its request
or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, will
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in The New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.

Section 8.07 Reinstatement.

          If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s and the Guarantors’ obligations under this
Indenture, the Notes and the Subsidiary Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if the Company makes any payment of principal of,
premium and Liquidated Damages, if any, or interest on any Note following the
reinstatement of its obligations, the Company will be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.

ARTICLE 9.

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01 Without Consent of Holders of Notes.

          Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:

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

		
	 	     (ii)     to provide for uncertificated Notes in addition to or in place
of certificated Notes;

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	 	     (iii)     to provide for the assumption of the Company’s obligations to
the Holders of the Notes in the case of a merger or consolidation or sale
of all or substantially all of the Company’s assets pursuant to Article 5
hereof;

		
	 	     (iv)     to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder of any Holder of a Note;

		
	 	     (v)     to comply with the rules of any applicable securities
depository;

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

		
	 	     (vii)     to comply with the covenant contained in Article 5 hereof;

		
	 	     (viii)     to add Guarantees with respect to the Notes or to secure the
Notes;

		
	 	     (ix)     to add to the covenants of the Company or any Guarantor for the
benefit of the Holders of the Notes or surrender any right or power
conferred upon the Company or any Guarantor; or

		
	 	     (x)     to evidence and provide for the acceptance and appointment under
this Indenture of a successor Trustee pursuant to the requirements
thereof.

          The consent of the Holders is not necessary under this Indenture to
approve the particular form of any proposed amendment. It is sufficient if
such consent approves the substance of the proposed amendment.

          After an amendment under this Indenture becomes effective, the Company is
to mail to Holders of the Notes a notice briefly describing such amendment.
However, the failure to give such notice to all Holders of the Notes, or any
defect therein, will not impair or affect the validity of the amendment.

          Upon (x) the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture and (y) receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee will join with the Company in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.

Section 9.02 With Consent of Holders of Notes.

          Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture (including, without limitation, Section
3.09, 4.10 and 4.15 hereof), the Subsidiary Guarantees and the Notes with the
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding (including consents obtained in

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connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of
the principal of, premium or Liquidated Damages, if any, or interest on the
Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture, the Subsidiary
Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes).

          Upon (x) the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, (y) the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid
and (z) receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee will join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but will not be
obligated to, enter into such amended or supplemental Indenture.

          The Company may, but will not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders of Notes on such
record date, or their duly designated proxies, and only such Persons, will be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided, that unless such consent will
have become effective by virtue of the requisite percentage having been
obtained prior to the date which is 180 days after such record date; any such
consent previously given will automatically and without further action by any
Holder be canceled and of no further effect.

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

          After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of
a majority in aggregate principal amount of the Notes then outstanding may
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Notes. However, without the consent of each Holder
affected, an amendment or waiver may not (with respect to any Notes held by a
non-consenting Holder):

		
	 	     (i)     reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;

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	 	     (ii)     reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the
redemption of the Notes except as provided above with respect to Sections
3.09, 4.10 and 4.15 hereof;

		
	 	     (iii)     reduce the rate of or change the time for payment of interest,
including default interest, on any Note;

		
	 	     (iv)     waive a Default or Event of Default in the payment of principal
of, or premium or Liquidated Damages, if any, or interest on the Notes
(except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the then outstanding
Notes and a waiver of the payment default that resulted from such
acceleration);

		
	 	     (v)      make any Note payable in currency other than that stated in the
Notes;

		
	 	     (vi)     make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium or Liquidated Damages, if any, or
interest on the Notes;

		
	 	     (vii)     waive a redemption payment with respect to any Note (other
than a payment required by Sections 3.09, 4.10 and 4.15 hereof);

		
	 	     (viii)    release any Guarantor from any of its obligations under its
Subsidiary Guarantee or this Indenture, except in accordance with the
terms of this Indenture; or

		
	 	     (ix)      make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.

          In addition, any amendment to, or waiver of, the provisions of Article 11
hereof that adversely affects the rights of the Holders of Notes will be
governed by Section 11.13 hereof.

Section 9.03 Compliance with Trust Indenture Act.

          Every amendment or supplement to this Indenture or the Notes will be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.

Section 9.04 Revocation and Effect of Consents.

          Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder’s Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.

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Section 9.05 Notation on or
Exchange of Notes.

          The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee will authenticate new Notes
that reflect the amendment, supplement or waiver.

          Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.

Section 9.06 Trustee to Sign Amendments, etc.

          The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Company may not sign an amendment or supplemental indenture until the Board of
Directors approves it. In executing any amended or supplemental indenture, the
Trustee will be entitled to receive, and (subject to Section 7.01 hereof) will
be fully protected in relying upon, an Officer’s Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.

ARTICLE 10.

SUBSIDIARY GUARANTEES

Section 10.01 Agreement to Guarantee.

          (a)     Each of the Guarantors, jointly and severally with all other
Guarantors, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
regardless of the validity and enforceability of this Indenture, the Notes or
the Obligations of the Company under this Indenture or the Notes, that:

		
	 	     (i)     the principal of, premium and Liquidated Damages, if any, and
interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of, premium and Liquidated Damages, if any, and
interest on the Notes, to the extent lawful, and all other Obligations of
the Company to the Holders or the Trustee under this Indenture or the
Notes will be promptly paid in full, all in accordance with the terms
hereof or thereof; and
	 
	 	     (ii)     in case of any extension of time for payment or renewal of any
Notes or any of such other Obligations, that the same will be promptly
paid in full when due in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.

          (b)     Notwithstanding the foregoing, in the event that this Guarantee would
constitute or result in a violation of any applicable fraudulent conveyance or
similar law of any

74

 

relevant jurisdiction, the liability of the Guarantors under this
Indenture will be reduced to the maximum amount permissible under such
fraudulent conveyance or similar law.

          (c)     Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors will be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees
that this is a guarantee of payment and not a guarantee of collection.

Section 10.02 Execution and Delivery of Subsidiary Guarantees.

          (a)     To evidence its Subsidiary Guarantee set forth in this Indenture, each
Guarantor hereby agrees that a notation of such Guarantee substantially in the
form attached as Exhibit C to this Indenture will be endorsed by an Officer of
such Guarantor on each Note authenticated and delivered by the Trustee on or
after the date hereof.

          (b)     Notwithstanding the foregoing, each Guarantor hereby agrees that its
Guarantee set forth herein will remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Guarantee.

          (c)     If an Officer whose signature is on this Indenture or on a Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Guarantee is endorsed, the Guarantee will be valid
nevertheless.

          (d)     The delivery of any Note by the Trustee, after the authentication
thereof under this Indenture, will constitute due delivery of the Subsidiary
Guarantee set forth in this Indenture on behalf of each Guarantor.

          (e)     Each Guarantor hereby agrees that its obligations hereunder will be
unconditional, regardless of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.

          (f)     Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that its Subsidiary
Guarantee made pursuant to this Indenture will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.

          (g)     If any Holder or the Trustee is required by any court or otherwise to
return to the Company or any Guarantor, or any custodian, Trustee, liquidator
or other similar official acting in relation to either the Company or such
Guarantor, any amount paid by either to the Trustee or such Holder, the
Subsidiary Guarantee made pursuant to this Indenture, to the extent theretofore
discharged, will be reinstated in full force and effect.

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          (h)     Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between such Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand:

		
	 	     (i)     the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article 6 of this Indenture for the purposes
of the Subsidiary Guarantee made pursuant to this Indenture,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby; and
	 
	 	     (ii)     in the event of any declaration of acceleration of such
Obligations as provided in Article 6 of this Indenture, such Obligations
(whether or not due and payable) will forthwith become due and payable by
such Guarantor for the purpose of the Subsidiary Guarantee made pursuant
to this Indenture.

          (i)     Each Guarantor will have the right to seek contribution from any other
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders or the Trustee under the Subsidiary Guarantee made
pursuant to this Indenture.

Section 10.03 Guarantors May Consolidate, etc. on Certain Terms.

          (a)     Except as set forth in Articles 4 and 5 of this Indenture, and
notwithstanding Sections 10.03(b) and (c) of this Indenture, nothing contained
in this Indenture or in the Notes will prevent any consolidation or merger of
any Guarantor with or into the Company or any other Guarantor or will prevent
any transfer, sale or conveyance of the property of any Guarantor as an
entirety or substantially as an entirety to the Company or any other Guarantor.

          (b)     Except as set forth in Section 10.04 of this Indenture, no Guarantor
may sell or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person), another Person, other than the Company or another Guarantor,
unless:

		
	 	     (i)     immediately after giving effect to such transaction, no Default
or Event of Default exists; and
	 
	 	     (ii)    either:

		
	 	     (A)     subject to Section 10.04 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger unconditionally assumes
all the obligations of that Guarantor, pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the
Trustee, under this Indenture and the Subsidiary Guarantee on the
terms set forth herein or therein; and
	 
	 	     (B)     the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this
Indenture, including without limitation, Section 4.10 hereof.

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          (c)     In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee made pursuant to this Indenture and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by such Guarantor, such successor Person will succeed to and be
substituted for such Guarantor with the same effect as if it had been named
herein as one of the Guarantors. Such successor Person thereupon may cause to
be signed any or all of the Subsidiary Guarantees to be endorsed upon the Notes
issuable under this Indenture which theretofore have not been signed by the
Company and delivered to the Trustee. All the Subsidiary Guarantees so issued
will in all respects have the same legal rank and benefit under this Indenture
as the Subsidiary Guarantees theretofore and thereafter issued in accordance
with the terms of this Indenture as though all of such Subsidiary Guarantees
had been issued at the date of the execution hereof.

Section 10.04 Releases.

          (a)     In the event of any sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Guarantor, in each case to a Person that is not (either before or after giving
effect to such transactions) a Subsidiary of the Company, then such Guarantor
(in the event of a sale or other disposition, by way of merger, consolidation
or otherwise, of all of the Capital Stock of such Guarantor) or the Person
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and
relieved of any obligations under its Subsidiary Guarantee; provided that the
Net Proceeds of such sale or other disposition are applied in accordance with
the applicable provisions of this Indenture, including without limitation
Section 4.10 hereof. Upon delivery by the Company to the Trustee of an
Officer’s Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the provisions of
this Indenture, including without limitation Section 4.10 hereof, the Trustee
will execute any documents reasonably required in order to evidence the release
of any Guarantor from its obligations under its Subsidiary Guarantee.

          Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this
Indenture as provided in this Article 10.

          (b)     Upon the designation of a Guarantor as an Unrestricted Subsidiary in
accordance with the terms of this Indenture, such Guarantor will be released
and relieved of its obligations under this Indenture. Upon delivery by the
Company to the Trustee of an Officer’s Certificate and an Opinion of Counsel to
the effect that such designation of such Guarantor as an Unrestricted
Subsidiary was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.07 hereof, the Trustee will
execute any documents reasonably required in order to evidence the release of
such Guarantor from its obligations under its Subsidiary Guarantee. Any
Guarantor not released from its obligations under its Subsidiary Guarantee will
remain liable for the full amount of principal of and interest on the Notes and
for the other obligations of any Guarantor under this Indenture as provided in
this Article 10.

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          (c)     Each Guarantor shall be released and relieved of its obligations under
this Indenture in accordance with, and subject to, Article 8 hereof.

ARTICLE 11.

SUBORDINATION

Section 11.01 Agreement to
Subordinate.

          The Company agrees, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by the Notes is subordinated in right of payment, to the
extent and in the manner provided in this Article 11, to the prior payment in
full in cash of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.

Section 11.02 Liquidation; Dissolution; Bankruptcy.

          Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company, in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or in any marshalling of the
Company’s assets and liabilities, the holders of Senior Debt will be entitled
to receive payment in full in cash of all Obligations due in respect of such
Senior Debt (including interest after the commencement of any such proceeding
at the rate specified in the applicable Senior Debt, whether or not an
allowable claim in any such proceeding) before the Holders of Notes will be
entitled to receive any payment with respect to the Notes, and until all
Obligations with respect to Senior Debt are paid in full in cash, any
distribution to which the Holders of Notes would be entitled will be made to
the holders of Senior Debt (except, in each case, that Holders of Notes may
receive Permitted Junior Securities and payments made from the trust described
under Article 8).

Section 11.03 Default on Designated Senior Debt.

          (a)     The Company may not make any payment or distribution to the Trustee or
any Holder in respect of Obligations with respect to the Notes and may not
acquire from the Trustee or any Holder any Notes for cash or property (other
than Permitted Junior Securities and payments and other distributions made from
any defeasance trust created pursuant to Article 8 hereof) until all principal
and other Obligations with respect to the Senior Debt have been paid in full
if:

		
	 	     (i)     a default in the payment of any principal, premium, if any, or
interest with respect to Designated Senior Debt occurs and is continuing
beyond any applicable grace period; or

78

 

		
	 	     (ii)     a default, other than a payment default, on Designated Senior
Debt occurs and is continuing that then permits holders of the Designated
Senior Debt as to which such default relates to accelerate its maturity
(or that would permit such holders to accelerate with the giving of
notice or the passage of time or both) and the Trustee receives a notice
of the default (a “Payment Blockage Notice
”) from the Company or a
Representative with respect to such Designated Senior Debt.

          (b)     If the Trustee receives a Payment Blockage Notice, no subsequent
Payment Blockage Notice will be effective for purposes of this Section 10.03
unless and until (i) at least 360 days have elapsed since the effectiveness of
the immediately prior Payment Blockage Notice and (ii) all scheduled payments
of principal, premium and Liquidated Damages, if any, and interest on the Notes
that have come due have been paid in full in cash.

          No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee will be, or be made, the
basis for a subsequent Payment Blockage Notice, whether or not within a period
of 360 consecutive days, unless such default has been waived or cured for a
period of not less than 90 days.

          (c)     The Company may and will resume payments on and distributions in
respect of the Notes and may acquire them:

          (i)     in the case of a default referred to in Section 11.03(a)(i)
hereof, upon the date on which the default is cured or waived, or

          (ii)     in the case of a default referred to in Section 11.03(a)(ii)
hereof, upon the earlier of the date on which such default is cured or
waived or 179 days after the date on which the applicable Payment
Blockage Notice is received, unless the maturity of such Designated
Senior Debt has been accelerated,

if this Article 11 otherwise permits the payment, distribution or acquisition
at the time of such payment or acquisition.

Section 11.04 Acceleration of Securities.

          If payment of the Notes is accelerated because of an Event of Default, the
Company will promptly notify holders of Senior Debt of the acceleration.

Section 11.05 When Distribution Must Be Paid Over.

          In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Article 11 hereof, such payment will be held by the Trustee or such Holder, in
trust for the benefit of, and will be paid forthwith over and delivered, upon
written request, to, the holders of Senior Debt as their interests may appear
or their Representative under this Indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary

79

 

to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders
of Senior Debt.

          With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee that are specifically
set forth in this Article 11, and no implied covenants or obligations with
respect to the holders of Senior Debt will be read into this Indenture against
the Trustee. The Trustee will not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and will not be liable to any such holders if the
Trustee pays over or distributes to or on behalf of Holders or the Company or
any other Person money or assets to which any holders of Senior Debt are
entitled by virtue of this Article 11, except if such payment is made as a
result of the willful misconduct or negligence of the Trustee.

Section 11.06 Notice by Company

          The Company will promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of any Obligations with
respect to the Notes to violate this Article 11, but failure to give such
notice will not affect the subordination of the Notes to the Senior Debt as
provided in this Article 11.

          The Trustee will be entitled to rely on the delivery to it of a written
notice by a person representing himself to be a holder of Senior Debt (or a
trustee or agent on behalf of such holder) to establish that such notice has
been given by a holder of Senior Debt (or a trustee or agent on behalf of any
such holder). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any person as holder
of Senior Debt to participate in any payment or distribution pursuant to this
Article 11, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such person. If evidence of the extent to which such person is entitled to
participate in any payment or distribution pursuant to this Article 11 is not
furnished, the Trustee may defer any payment which it may be required to make
for the benefit of such person pursuant to the terms of this Indenture pending
judicial determination as to the rights of such person to receive such payment.

Section 11.07 Subrogation.

          After all Senior Debt is paid in full in cash and until the Notes are paid
in full, Holders of Notes will be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of
Senior Debt to receive distributions applicable to Senior Debt to the extent
that distributions otherwise payable to the Holders of Notes have been applied
to the payment of Senior Debt. A distribution made under this Article 11 to
holders of Senior Debt that otherwise would have been made to Holders of Notes
is not, as between the Company and Holders, a payment by the Company on the
Notes.

Section 11.08 Relative Rights.

     This Article 11 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture will:

80

 

		
	 	     (i)     impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
	 
	 	     (ii)     affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior
Debt; or
	 
	 	     (iii)     prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.

          If the Company fails because of this Article 11 to pay principal of or
interest on a Note on the due date, that failure is still a Default or Event of
Default.

Section 11.09 Subordination May Not Be Impaired by Company.

          No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes will be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.

Section 11.10 Distribution or Notice to Representative.

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

          Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee and the Holders of Notes will be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon
any certificate of the Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders of Notes
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
11.

Section 11.11 Rights of Trustee and Paying Agent.

          Notwithstanding the provisions of this Article 11 or any other provision
of this Indenture, the Trustee will not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee has received at its Corporate
Trust Office at least three Business Days prior to the date of such payment
written notice of facts that would cause the payment of any Obligations with
respect to the Notes to violate this Article 11. Only the Company or a
Representative may give the notice. Nothing in this Article 11 will impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof.

81

 

          The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.

Section 11.12 Authorization to Effect Subordination.

          Each Holder of Notes, by the Holder’s acceptance thereof, authorizes and
directs the Trustee on such Holder’s behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 11, and appoints the Trustee to act as such Holder’s attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the credit agents are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.

Section 11.13 Amendments.

          The provisions of this Article 11 will not be amended or modified without
the written consent of the holders of at least 75% in aggregate principal
amount of the Notes then outstanding if such amendment would adversely affect
the rights of Holders of Notes.

ARTICLE 12.

SATISFACTION AND DISCHARGE

Section 12.01 Satisfaction and Discharge.

          This Indenture will be discharged and will cease to be of further effect
as to all Notes issued thereunder, when:

		
	 	     (i)     either:

	 	(A)	 	all Notes that have been authenticated, except
lost, stolen or destroyed Notes that have been replaced or
paid and Notes for whose payment money has been deposited in
trust and thereafter repaid to the Company, have been
delivered to the Trustee for cancellation; or
	 
	 	(B)	 	all Notes that have not been delivered to the
Trustee for cancellation have become due and payable or will
become due and payable within one year by reason of the
mailing of a notice of redemption or otherwise and the Company
or any Guarantor has irrevocably deposited or caused to be
deposited with the Trustee as funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities or a combination of cash in U.S. dollars
and non-callable Government Securities, in amounts as will be
sufficient without consideration of any reinvestment of
interest, to pay and discharge the entire indebtedness on the
Notes not delivered to the Trustee for cancellation of
principal, premium and Liquidated Damages, if any, and accrued
interest to the date of maturity or redemption;

82

 

	 	(ii)	 	no Default or Event of Default has occurred and is continuing
on the date of the deposit or will occur as a result of the deposit
and the deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
	 
	 	(iii)	 	the Company or any Guarantor has paid or caused to be paid
all sums payable by it under this Indenture; and
	 
	 	(iv)	 	the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case
may be.

          In addition, the Company must deliver an Officer’s Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.

          Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to Section 12.01(i)(B) hereof, the
provisions of Section 12.02 and Section 8.06 will survive. In addition,
nothing in this Section 12.01 will be deemed to discharge those provisions of
Section 7.07 hereof, that, by their terms, survive the satisfaction and
discharge of this Indenture.

Section 12.02 Application of Trust Money.

          Subject to the provisions of Section 8.06 hereof, all money deposited with
the Trustee pursuant to Section 12.01 will be held in trust and applied by it,
in accordance with the provisions of the Notes 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 premium, if any) and interest for whose
payment such money has been deposited with the Trustee; but such money need not
be segregated from other funds except to the extent required by law.

          If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 12.01 hereof by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company’s and any Guarantor’s obligations under this Indenture and the Notes
will be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01 hereof; provided
 that if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company will be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.

83

 

ARTICLE 13.

MISCELLANEOUS

Section 13.01 Trust Indenture
Act Controls.

          If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA § 318(c), the imposed duties will control.

Section 13.02 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
(registered or certified, return receipt requested), telecopier or overnight
air courier guaranteeing next day delivery, to the other’s address:

	 	 	 
	 	 	
If to the Company or any Guarantor:
	 	 	 
	 	 	
United Components, Inc.

301 Industrial Drive

Albion, Illinois 62806

Attention: Bruce M. Zorich (Fax: 618-456-2260)
	 	 	 
	 	 	
With a copy to:
	 	 	 
	 	 	
Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Attention: Marc Jaffe (Fax: 212-751-4864)

	 	 	 
	 	 	
If to the Trustee:
	 	 	 
	 	 	
Wells Fargo Bank Minnesota, National Association

213 Court Street, Suite 703

Middletown, Connecticut 06457

Attention: Corporate Trust Administration (Fax: 860-704-6219)

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

          All notices and communications (other than those sent to Holders) will be
deemed to have been duly given, at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

          Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication

84

 

will also be so mailed to any Person described in TIA § 313(c), to the
extent required by the TIA. Failure to mail a notice or communication to a
Holder or any defect in it will not affect its sufficiency with respect to
other Holders.

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

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

Section 13.03 Communications By Holders of Notes with Other Holders of Notes.

          Holders may communicate pursuant to TIA § 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else will have the protection of TIA §
312(c).

Section 13.04 Certificate and Opinion as to Conditions Precedent.

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

	(a)

     an Officer’s Certificate in form and substance reasonably satisfactory to
the Trustee (which will include the statements set forth in Section 13.05
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
	 
	(b)

        an Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee (which will include the statements set forth in Section 13.05 hereof)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.

Section 13.05 Statements Required in Certificate or Opinion.

          Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA § 314(a)(4)) will comply with the provisions of TIA § 314(e)
and will 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 or she has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
	 
	(d)

     a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.

85

 

Section 13.06 Rules by Trustee and Agents.

          The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders.

          No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, will have any liability
for any obligations of the Company or any Guarantor under the Notes, the
Subsidiary Guarantees or this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Notes
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy.

Section 13.08 Governing Law.

          THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WILL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 13.09 No Adverse Interpretation of Other Agreements.

          This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.

Section 13.10 Successors.

          All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors.

Section 13.11 Severability.

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

Section 13.12 Counterpart Originals.

          The parties may sign any number of copies of this Indenture. Each signed
copy will be an original, but all of them together represent the same
agreement.

86

 

Section 13.13 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 of this Indenture and will in no way
modify or restrict any of the terms or provisions hereof.

[Signatures on following pages]

87

 

SIGNATURES

Dated as of June [20], 2003

	 	 	 	 	 
	 	 	
UNITED COMPONENTS, INC.
	 	 	 	 	 
	 	 	By:	 	/s/ John Ritter

Name: John Ritter

Title: Chief Financial Officer

	 	 	 
	Guarantors:
	 	 	 
	MID-SOUTH MFG., INC.,

	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	AIRTEX PRODUCTS, LLC,

	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	CHAMPION LABORATORIES, INC.,

	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	UCI-AIRTEX HOLDINGS, INC.,
	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 

S-1

 

	 	 	 
	UCI INVESTMENTS, L.L.C.,
	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	AIRTEX PRODUCTS, INC.,
	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	CHEFFORD MASTER MANUFACTURING CO.,
	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	PEE CEE MANUFACTURING CO., INC.,

	 	 	as a Guarantor
	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	FUEL FILTER TECHNOLOGIES, INC.,
	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer

S-2

 

	 	 	 
	PIONEER, INC.,
	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	NEAPCO INC.,
	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	WELLS MANUFACTURING CORP.,
	 	 	
as a Guarantor
	 	 	 
	By:	 	/s/ John Ritter
	 	 	

Name: John Ritter
	 	 	
Title: Vice President, Secretary and Treasurer
	 	 	 
	WELLS FARGO BANK MINNESOTA,

NATIONAL ASSOCIATION, as Trustee
	 	 	 
	By:	 	/s/ Frank McDonald
	 	 	

Name: Frank McDonald
	 	 	
Title: Vice President

S-3

 

EXHIBIT A
 [FORM OF FACE OF NOTE]

[Global Note Legend]

          THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(c) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.

[Private Placement Legend]

          THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR OTHER SECURITIES
LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT
THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING ITS NOTE IN AN “OFFSHORE TRANSACTION”
PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT
IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF
TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR
PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF
ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS
NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW
(THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT

A-1

 

THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A INSIDE THE UNITED STATES, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT
THE COMPANY, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM AND (II) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THE NOTE IS COMPLETED AND DELIVERED BY THIS TRANSFEROR TO THE TRUSTEE.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “OFFSHORE
TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.

[Temporary Regulation S Global Note Legend]

          EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN
THE PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN
INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY
DISTRIBUTION COMPLIANCE PERIOD” (WITHIN THE MEANING OF RULE 903(B)(2) OF
REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN
FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE
OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS
IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT.
DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP IN THIS
TEMPORARY REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED
THROUGH EUROCLEAR CLEARSTREAM BANKING, S.A. AND ONLY (1) TO THE COMPANY, (2)
WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE
UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (1) THROUGH (4) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND

A-2

 

OTHER JURISDICTIONS. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATIONS
S GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS
REFERRED TO ABOVE, IF THEN APPLICABLE.

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

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

[Definitive Securities Legend]

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

A-3

 

	 	 	 	 	 
	 	 	 	CUSIP NO. 

ISIN	 

	No.	 	
 
	$     	
 

93/8% Senior Subordinated Notes Due 2013

          United Components, Inc., a Delaware corporation, promises to pay to Cede &
Co., or registered assigns, the principal sum of      Dollars on June 15,
2013.

	 	 	 
	Interest Payment Dates:	 	
June 15 and

December 15
	 	 	 
	Record Dates:	 	
June 1 and 

December 1

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

Dated: June 20, 2003

	 	 	 	 	 
	 	 	
UNITED COMPONENTS, INC.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

Name:

Title:

	 	 	 	 	 
	TRUSTEE’S CERTIFICATE OF

    AUTHENTICATION
	 	 	 	 	 
	WELLS FARGO BANK MINNESOTA,

   NATIONAL ASSOCIATION
	 	 	 	 	 
	 	as	Trustee, certifies that this

is one of the Notes referred

to in the Indenture.

	 	 	 
	By:	 	 
	 	

	 	 	

Authorized Signatory

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[FORM OF REVERSE SIDE OF NOTE]

93/8% Senior Subordinated Note due 2013

               Capitalized terms used herein will have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.

     1.     INTEREST.
United Components, Inc., a Delaware corporation (the
“Company”), promises to pay interest on the principal amount of this Note at
93/8% per annum from December 15, 2003 until maturity and will pay the
Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages, if any, semi-annually on June 15 and December 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each
an “Interest Payment Date”), with the same force and effect as if made on the
date for such payment. Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
June 20, 2003; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest will
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date will be December 15, 2003. The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.

     2.     METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on the June 1 or December
1 next (whether or not a Business Day) preceding the Interest Payment Date,
even if such Notes are canceled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes will be payable as to principal,
premium and Liquidated Damages, if any, and interest at the office or agency of
the Company maintained for such purpose within The City and State of New York,
or, at the option of the Company, payment of interest and Liquidated Damages,
if any, may be made by check mailed to the Holders at their respective
addresses set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest, premium and Liquidated Damages, if any, on, all
Global Notes and all other Notes the Holders of which have provided wire
transfer instructions to the Company or the Paying Agent if such Holders are
registered Holders of at least $250,000 in principal amount of the Notes. Such
payment will be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.

     3.     PAYING AGENT AND REGISTRAR. Initially, Wells Fargo Bank Minnesota,
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The

A-5

 

Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any
such capacity.

     4.          INDENTURE. The Company issued the Notes under an Indenture dated as of
June 20, 2003 (“Indenture”) among the Company, the Guarantors named therein and
the Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts
with the express provisions of the Indenture, the provisions of the Indenture
will govern and be controlling.

     5.          OPTIONAL REDEMPTION.

                   (a)     Except as set forth in clause (b) of this paragraph 5, the Notes will
not be redeemable at the Company’s option prior to June 15, 2008. Thereafter,
the Company may redeem all or a part of the Notes upon not less than 30 nor
more than 60 days’ notice, at the redemption prices (expressed as percentages
of principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on June 15 of the years
indicated below:

	 	 	 	 	 
	Year	 	Percentage
	2008
	 	 	104.688	%
	2009
	 	 	103.125	%
	2010
	 	 	101.563	%
	2011 and thereafter
	 	 	100.000	%

                  (b)     Notwithstanding the foregoing, at any time prior to June 15, 2006,
the Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of the Notes issued under the Indenture at a redemption price
of 109.375% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages thereon, if any, to the redemption date, with the net
cash proceeds of one or more Equity Offerings by the Company or from the cash
contribution of equity capital (other than Disqualified Stock) to the Company;
provided that at least 65% of the aggregate principal amount of Notes issued
under the Indenture remains outstanding immediately after the occurrence of
each such redemption (excluding Notes held by the Company and its
Subsidiaries); and provided, further, that any such redemption occurs within 90
days of the date of the closing of such Equity Offering.

     6.          MANDATORY REDEMPTION.

     The Company is not required to make mandatory redemption payments with
respect to the Notes.

     7.          REPURCHASE AT OPTION OF HOLDER.

          (a)     If there is a Change of Control, the Company will be required to make
an offer (a “Change of Control Offer”) to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder’s Notes at a purchase
price equal to 101% of aggregate

A-6

 

principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase (the
“Change of Control Payment”). Within 30 days following any Change of Control,
the Company will mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on the Change of Control Payment Date specified in the notice, which date
will be no earlier than 30 days and no later than 60 days from the date such
notice ism mailed, pursuant to the procedures required by the Indenture and
described in such notice.

                    (b)     If the Company or a Restricted Subsidiary consummates an Asset Sale,
within five Business Days of each date on which the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company will commence an offer to all
Holders of Notes and all holders of other Indebtedness that is pari passu with
the Notes containing provisions similar to those set forth in the Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase. If any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and
other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee will select the Notes and such other
pari passu Indebtedness to be purchased on a pro rata basis. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Notes.

     8.          NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date, interest ceases to accrue on Notes or portions
thereof called for redemption.

     9.          DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and
the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a
Note selected for redemption, except for the unredeemed portion of any
Note being redeemed in part. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.

     10.          PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.

A-7

 

     11.          AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes or the Subsidiary Guarantees may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes, and any existing default or
compliance with any provision of the Indenture, the Notes or the Subsidiary
Guarantees may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes. Without the consent of any
Holder of a Note, the Indenture, the Notes or the Subsidiary Guarantees may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company’s or any Guarantor’s
obligations to Holders of the Notes in case of a merger or consolidation or
sale of all or substantially all of the Company’s assets, to make any change
that would provide any additional rights or benefits to the Holders of the
Notes or that does not adversely affect the legal rights under the Indenture of
any such Holder, to comply with the rules of any applicable securities
depository, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
comply with Section 5.01 of the Indenture, to add Guarantees with respect to
the Notes or to secure the Notes, to add to the covenants of the Company or any
Guarantor for the benefit of the Holders of the Notes or surrender any right or
power conferred upon the Company or any Guarantor or to evidence and provide
for the acceptance and appointment under the Indenture of a successor Trustee
pursuant to the procedures set forth in the Indenture.

     12.          DEFAULTS AND REMEDIES. An “Event of Default” occurs if: (i) default
for 30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes (whether or not prohibited by the subordination
provisions of the Indenture); (ii) default in payment when due of the principal
of, or premium, if any, on the Notes (whether or not prohibited by the
subordination provisions of the Indenture); (iii) failure by the Company or any
of its Restricted Subsidiaries to comply with the covenants contained in
Sections 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company or
any of its Restricted Subsidiaries for 30 days after notice to comply with
Sections 4.07 and 4.09 of the Indenture; (v) failure by the Company or any of
its Restricted Subsidiaries for 60 days after notice to comply with any of its
other agreements in the Indenture or the Notes; (vi) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default is caused by a failure to pay
principal of, or interest or premium, if any, on such Indebtedness prior
to the expiration of the grace period provided in such Indebtedness on the date
of such default (a “Payment Default”) or results in the acceleration of such
Indebtedness prior to its Stated Maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $25.0 million or more;
(vii) failure by the Company or any of its Subsidiaries to pay final judgments
aggregating in excess of $25.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; (viii) except as permitted by the
Indenture, any Subsidiary Guarantee is held in any judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor,
denies or disaffirms its obligations under its Subsidiary Guarantee; or (ix)
certain events of bankruptcy or insolvency

A-8

 

with respect to the Company or any
of its Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary.

     If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all outstanding Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company or any
Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable without further action or notice. Holders of the Notes
may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of
the then outstanding Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest, except with respect to a Default or
Event of Default relating to the payment of principal of, or interest or
premium of Liquidated Damages, if any, on, the Notes.

     In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium will
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to June
15, 2008 by reason of any willful action (or inaction) taken (or not taken) by
or on behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to June 15, 2008, then the premium specified in
the Indenture will also become immediately due and payable to the extent
permitted by law upon the acceleration of the Notes.

               The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may, on behalf of the Holders of all of
the Notes, waive any existing Default or Event of Default and its consequences
under the Indenture, except a continuing Default or Event of Default in the
payment of principal of, or interest or premium or Liquidated Damages, if any,
on, the Notes; provided, however, that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, if the rescission would not conflict with any judgment or
decree or if all existing Events of Default have been cured or waived.

     13.     SUBORDINATION. Payment of the principal of, premium and Liquidated
Damages, if any, or interest on the Notes is subordinated to the prior payment
of Senior Debt on the terms provided in the Indenture.

     14.     TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.

A-9

 

     15.     NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any Guarantor, as such, will not
have any liability for any obligations of the Company or any Guarantor under
the Notes, the Indenture or the Subsidiary Guarantees or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.

     16.     AUTHENTICATION. This Note will not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

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

     18.     ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Notes under the Indenture,
Holders of Transferred Restricted Securities will have all the rights set forth
in the Registration Rights Agreement dated as of June [20], 2003, between the
Company and the parties named on the signature pages thereof, or, with respect
to any Additional Notes, Holders of Transfer Restricted Securities will have
all the rights set forth in one or more registration rights agreements between
the Company and the other parties thereto, relating to rights given by the
Company to the purchasers of Additional Notes (collectively, the “Registration
Rights Agreement”).

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

     20.     GOVERNING LAW. This Note will be governed by, and construed in
accordance with, the laws of the State of New York.

     The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

	 
	United Components, Inc.

301 Industrial Drive

Albion, Illinois 62806

Attention: Bruce M. Zorich (Fax: 618-456-2260)

A-10

 

ASSIGNMENT FORM

     To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to

(Insert assignee’s social security or tax identification number)

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

	 	 
	and irrevocably appoint	

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

	 	 	 	 	 	 	 
	Date:	 	 	 	Your Signature:	 	 
	 	 	

	 	 	 	

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

     In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act of 1933, as amended (the “Securities Act”),
after the later of the date of original issuance of such Notes and the last
date, if any, on which such Notes were owned by the Company or any Affiliate of
the Company, the undersigned confirms that such Notes are being transferred in
accordance with its terms:

	 	 	 
	 	 	
CHECK ONE BOX BELOW
	 	 	 
	(1)	o	
to the Company; or
	 	 	 
	(2)	o	
pursuant to an effective registration statement under the
Securities Act; or
	 	 	 
	(3)	o	
inside the United States to a “qualified institutional buyer” (as
defined in Rule 144A under the Securities Act) that purchases for its
own account or for the account of a qualified institutional buyer to
whom notice is given that such transfer is being made in reliance on
Rule 144A, in each case pursuant to and in compliance with Rule 144A
under the Securities Act; or
	 	 	 
	(4)	o	
outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance with
Rule 904 under the Securities Act; or
	 	 	 
	(5)	o	
pursuant to the exemption from registration provided by Rule 144
under the Securities Act.

A-11

 

     If such transfer is being made pursuant to an offshore transaction in
accordance with Rule 904 under the Securities Act, the undersigned further
certifies that:

          (i) the offer of the Notes was not made to a person in the United States;

          (ii) either (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or (b)
the transaction was executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person acting on our behalf
knows that the transaction has been pre-arranged with a buyer in the United
States;

          (iii) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903 or Rule 904 of Regulation S, as
applicable;

          (iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;

          (v) we have advised the transferee of the transfer restrictions applicable
to the Notes; and

          (vi) if the circumstances set forth in Rule 904(b) under the Securities
Act are applicable, we have complied with the additional conditions therein,
including (if applicable) sending a confirmation or other notice stating that
the Notes may be offered and sold during the distribution compliance period
specified in Rule 903 of Regulation S, pursuant to registration of the Notes
under the Securities Act or pursuant to an available exemption from the
registration requirements under the Securities Act.

     Unless one of the boxes is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4) or (5)
is checked, the Trustee will be entitled to require, prior to registering any
such transfer of the Notes, such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act, such as the
exemption provided by Rule 144 under the Securities Act.

	 	 	 
	 	 	

Signature
	Signature Guarantee:	 	 
	 	 	 
	

Signature must be guaranteed	 	

Signature

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

A-12

 

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

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

	 	 	 	 	 	 
	Dated:	 	 	

	 	
	NOTICE:	 	To be executed by

an executive officer

A-13

 

Option of Holder to Elect Purchase

     If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the Indenture, check the box below:

     o   Section 4.10          
                    o   Section 4.15

     If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $     

	 	 	 	 	 
	Date: 	Your Signature:
	
	 	

	 	            (Sign exactly as your name appears on the Note)
	 	 
	 	Tax Identification No.:
	Signature Guarantee:	 	

	 	 	 	 	 
	

Signature must be guaranteed	 	 	 	 

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

A-14

 

Schedule of Exchanges of Interests in the Global Note

     The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:

	 	 	 
	 	 	 	 	 	 	 	 	Principal Amount of
	 	 	 	 	 	 	 	 	this Global Note	 	 	Signature of
	 	 	Amount of Decrease	 	 	Amount of Increase	 	 	following such	 	 	Authorized Officer
	 	 	in Principal Amount	 	 	in Principal Amount	 	 	Decrease	 	 	of Trustee or Note
	Date of Exchange	 	of this Global Note	 	 	of this Global Note	 	 	(or Increase)	 	 	Custodian
	
	 	
	 	 	
	 	 	
	 	 	

A-15

 

EXHIBIT B

FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED

BY SUBSIDIARY GUARANTOR

          SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”), dated as of
          , among            (the “Subsidiary Guarantors”),
each a direct or indirect subsidiary of United Components, Inc. (or its
permitted successor), a Delaware corporation (the “Company”), the Company and
Wells Fargo Bank Minnesota, National Association, as trustee under the
indenture referred to below (the “Trustee”).

W I T N E S S E T H

          WHEREAS, the Company and certain of its Subsidiaries have heretofore
executed and delivered to the Trustee an indenture (the “Indenture”), dated as
of June 20, 2003 providing for the issuance of an unlimited
amount of 93/8% Senior Subordinated Notes due 2013 (the “Notes”);

          WHEREAS, the Indenture provides that under certain circumstances the
Subsidiary Guarantors will execute and deliver to the Trustee a supplemental
indenture pursuant to which the Subsidiary Guarantors will unconditionally
guarantee all of the Company’s Obligations (as defined in the Indenture) under
the Notes and the Indenture on the terms and conditions set forth herein (the
“Subsidiary Guarantee”); and

          WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

          NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Notes as follows:

     1.
     CAPITALIZED TERMS. Capitalized terms used herein without definition
will have the meanings assigned to them in the Indenture.

     2.     AGREEMENT TO GUARANTEE. Each Subsidiary Guarantor hereby agrees as
follows:

	 	(a)	 	Such Subsidiary Guarantor, jointly and severally
with all other current and future guarantors of the Notes
(collectively, the “Guarantors” and each, a “Guarantor”),
unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, regardless of the validity and
enforceability of the Indenture, the Notes or the Obligations
of the Company under the Indenture or the Notes, that:
	 
	 	 	 	(i)	the principal of, premium, interest
and Liquidated Damages, if any, on the Notes will be
promptly paid in full when due, whether at

B-1

 

	 	 	 	maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of, premium, interest
and Liquidated Damages, if any, on the Notes, to the
extent lawful, and all other Obligations of the Company
to the Holders or the Trustee thereunder or under the
Indenture will be promptly paid in full, all in
accordance with the terms thereof; and
	 
	 	(ii)	 	in case of any extension of time for
payment or renewal of any Notes or any of such other
Obligations, that the same will be promptly paid in full
when due in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration
or otherwise.

	 	(b)	 	Notwithstanding the foregoing, in the event that
this Subsidiary Guarantee would constitute or result in a
violation of any applicable fraudulent conveyance or similar
law of any relevant jurisdiction, the liability of such
Subsidiary Guarantor under this Supplemental Indenture and its
Subsidiary Guarantee shall be reduced to the maximum amount
permissible under such fraudulent conveyance or similar law.

     3.     EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.

	 	(a)	 	To evidence its Subsidiary Guarantee set forth in
this Supplemental Indenture, such Subsidiary Guarantor hereby
agrees that a notation of such Subsidiary Guarantee
substantially in the form of Exhibit C to the Indenture will
be endorsed by an officer of such Subsidiary Guarantor on each
Note authenticated and delivered by the Trustee after the date
hereof.
	 
	 	(b)	 	Notwithstanding the foregoing, such Subsidiary
Guarantor hereby agrees that its Subsidiary Guarantee set
forth herein will remain in full force and effect
notwithstanding any failure to endorse on each Note a notation
of such Subsidiary Guarantee.
	 
	 	(c)	 	If an Officer whose signature is on this
Supplemental Indenture or on the Subsidiary Guarantee no
longer holds that office at the time the Trustee authenticates
the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee will be valid nevertheless.
	 
	 	(d)	 	The delivery of any Note by the Trustee, after
the authentication thereof under the Indenture, will
constitute due delivery of the Subsidiary Guarantee set forth
in this Supplemental Indenture on behalf of each Subsidiary
Guarantor.
	 
	 	(e)	 	Each Subsidiary Guarantor hereby agrees that its
Obligations hereunder will be unconditional, regardless of the
validity, regularity or enforceability of the Notes or the
Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to
any provisions hereof or thereof, the recovery of any judgment

B-2

 

	 	 	 	against the Company, any action to enforce the same or any
other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a guarantor.
	 
	 	(f)	 	Each Subsidiary Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and
covenants that its Subsidiary Guarantee made pursuant to this
Supplemental Indenture will not be discharged except by
complete performance of the Obligations contained in the Notes
and the Indenture.
	 
	 	(g)	 	If any Holder or the Trustee is required by any
court or otherwise to return to the Company or any Subsidiary
Guarantor, or any custodian, Trustee, liquidator or other
similar official acting in relation to either the Company or
such Subsidiary Guarantor, any amount paid by either to the
Trustee or such Holder, the Subsidiary Guarantee made pursuant
to this Supplemental Indenture, to the extent theretofore
discharged, will be reinstated in full force and effect.
	 
	 	(h)	 	Each Subsidiary Guarantor agrees that it shall
not be entitled to any right of subrogation in relation to the
Holders in respect of any Obligations guaranteed hereby until
payment in full of all Obligations guaranteed hereby. Each
Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand:

	 	(i)	 	the maturity of the Obligations
guaranteed hereby may be accelerated as provided in
Article 6 of the Indenture for the purposes of the
Subsidiary Guarantee made pursuant to this Supplemental
Indenture, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby; and
	 
	 	(ii)	 	in the event of any declaration of
acceleration of such Obligations as provided in Article
6 of the Indenture, such Obligations (whether or not due
and payable) will forthwith become due and payable by
such Subsidiary Guarantor for the purpose of the
Subsidiary Guarantee made pursuant to this Supplemental
Indenture.

	 	(i)	 	Each Subsidiary Guarantor will have the right to
seek contribution from any other non-paying Subsidiary
Guarantor so long as the exercise of such right does not
impair the rights of the Holders or the Trustee under the
Subsidiary Guarantee made pursuant to this Supplemental
Indenture.

B-3

 

	4.	SUBSIDIARY GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
	 
	 	(a)	 	Except as set forth in Articles 4 and 5 of the
Indenture, nothing contained in the Indenture, this
Supplemental Indenture or in the Notes will prevent any
consolidation or merger of any Subsidiary Guarantor with or
into the Company or any other Guarantor or will prevent any
transfer, sale or conveyance of the property of any Subsidiary
Guarantor as an entirety or substantially as an entirety to
the Company or any other Guarantor.
	 
	 	(b)	 	Except as set forth in Section 10.04 of the
Indenture, no Subsidiary Guarantor may sell or otherwise
dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the surviving Person), another Person,
other than the Company or another Guarantor, unless: (i)
immediately after giving effect to such transaction, no
Default or Event of Default exists and (ii) either (A) subject
to Section 10.04 of the Indenture, the Person acquiring the
property in any such sale or disposition or the Person formed
by or surviving any such consolidation or merger
unconditionally assumes all the obligations of that Subsidiary
Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the
Indenture and the Subsidiary Guarantee on the terms set forth
in the Indenture or such Subsidiary Guarantee, as the case may
be, and (B) the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable provisions of
the Indenture, including without limitation, Section 4.10
thereof.
	 
	 	(c)	 	In case of any such consolidation, merger, sale
or conveyance and upon the assumption by the successor Person,
by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee made pursuant to this Supplemental
Indenture and the due and punctual performance of all of the
covenants and conditions of the Indenture and this
Supplemental Indenture to be performed by such Subsidiary
Guarantor, such successor Person will succeed to and be
substituted for such Subsidiary Guarantor with the same effect
as if it had been named herein as the Subsidiary Guarantor.
Such successor Person thereupon may cause to be signed any or
all of the Subsidiary Guarantees to be endorsed upon the Notes
issuable under the Indenture which theretofore have not been
signed by the Company and delivered to the Trustee. All the
Subsidiary Guarantees so issued will in all respects have the
same legal rank and benefit under the Indenture and this
Supplemental Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms
of the Indenture and this Supplemental Indenture as though all
of such Subsidiary Guarantees had been issued at the date of
the execution hereof.

B-4

 

	5.	RELEASES.
	 
	 	(a)	 	In the event of any sale or other disposition of
all or substantially all of the assets of any Subsidiary
Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the Capital Stock of any
Subsidiary Guarantor, in each case to a Person that is not
(either before or after giving effect to such transactions) a
Subsidiary of the Company, then such Subsidiary Guarantor (in
the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the Capital Stock of
such Subsidiary Guarantor) or the Person acquiring the
property (in the event of a sale or other disposition of all
or substantially all of the assets of such Subsidiary
Guarantor) will be released and relieved of any obligations
under its Subsidiary Guarantee; provided that the Net Proceeds
of such sale or other disposition are applied in accordance
with the applicable provisions of the Indenture, including
without limitation Section 4.10 thereof. Upon delivery by the
Company to the Trustee of an Officer’s Certificate and an
Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the
provisions of the Indenture, including without limitation
Section 4.10 thereof, the Trustee will execute any documents
reasonably required in order to evidence the release of any
Subsidiary Guarantor from its obligations under its Subsidiary
Guarantee. Any Subsidiary Guarantor not released from its
obligations under its Subsidiary Guarantee will remain liable
for the full amount of principal of and interest on the Notes
and for the other obligations of any Guarantor under the
Indenture as provided in Article 10 thereof.
	 
	 	(b)	 	Upon the designation of a Subsidiary Guarantor as
an Unrestricted Subsidiary in accordance with the terms of the
Indenture, such Subsidiary Guarantor will be released and
relieved of its Obligations under its Subsidiary Guarantee and
this Supplemental Indenture. Upon delivery by the Company to
the Trustee of an Officer’s Certificate and an Opinion of
Counsel to the effect that such designation of such Subsidiary
Guarantor as an Unrestricted Subsidiary was made by the
Company in accordance with the provisions of the Indenture,
including without limitation Section 4.07 of the Indenture,
the Trustee will execute any documents reasonably required in
order to evidence the release of such Subsidiary Guarantor
from its Obligations under its Subsidiary Guarantee. Any
Subsidiary Guarantor not released from its Obligations under
its Subsidiary Guarantee will remain liable for the full
amount of principal of and interest on the Notes and for the
other Obligations of any Guarantor under the Indenture as
provided in Article 10 thereof.
	 
	 	(c)	 	Each Subsidiary Guarantor will be released and
relieved of its obligations under this Supplemental Indenture
in accordance with, and subject to, Article 8 of the
Indenture.

B-5

 

     6.     NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of any Subsidiary
Guarantor, as such, will have any liability for any Obligations of the Company
or any Subsidiary Guarantor under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such Obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the SEC that such a waiver is against public policy.

     7.     NEW YORK LAW TO GOVERN. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     8.     COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy will be an original, but all of them
together represent the same agreement.

     9.     EFFECT OF HEADINGS. The Section headings herein are for convenience
only and will not affect the construction hereof.

     10.    THE TRUSTEE. The Trustee will not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Subsidiary Guarantors and the
Company.

B-6

 

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

Dated:                               ,                              

	 	 	 	 	 
	 	 	
UNITED COMPONENTS, INC.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

Name:

Title:

Subsidiary Guarantors:

[EXISTING GUARANTORS]

[ADDITIONAL GUARANTORS]

Dated:                             
,                              

	 	 	 
	WELLS FARGO BANK MINNESOTA,
	 	 	
NATIONAL ASSOCIATION, as Trustee
	By:	 	 
	 	 	

Name:
	 	 	
Title:

B-7

 

EXHIBIT C

FORM OF NOTATION ON SENIOR SUBORDINATED NOTE RELATING TO

SUBSIDIARY GUARANTEE

          Pursuant to the Indenture (the “Indenture”) dated as of June 20, 2003
among United Components, Inc., the Guarantors party thereto (each a “Guarantor”
and collectively the “Guarantors”) and Wells Fargo Bank Minnesota, National
Association, as trustee (the “Trustee”), each Guarantor (i) has jointly and
severally unconditionally guaranteed (a) the due and punctual payment of the
principal of, and premium, interest and Liquidated Damages on the Notes,
whether at maturity or on an interest payment date, by acceleration, call for
redemption or otherwise, (b) the due and punctual payment of interest on the
overdue principal and premium of and interest and Liquidated Damages on the
Notes and (c) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, the same will be promptly paid in full
when due in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise and (ii) has agreed to pay any
and all costs and expenses (including reasonable attorneys’ fees) incurred by
the Trustee or any Holder in enforcing any rights under the Subsidiary
Guarantee (as defined in the Supplemental Indenture).

          Notwithstanding the foregoing, in the event that the Subsidiary Guarantee
of any Guarantor would constitute or result in a violation of any applicable
fraudulent conveyance or similar law of any relevant jurisdiction, the
liability of such Guarantor under its Subsidiary Guarantee will be reduced to
the maximum amount permissible under such fraudulent conveyance or similar law.

          The Subsidiary Guarantee will be binding upon each Guarantor and its
successors and assigns and will inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party will automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.

          The Subsidiary Guarantee will not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which the Subsidiary
Guarantee is noted has been executed by the Trustee under the Indenture by the
manual signature of one of its authorized officers. Capitalized terms used
herein have the meaning assigned to them in the Indenture.

C-1

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