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Exhibit 10.1    
    

CONFORMED COPY  

  
 

    HUNTSMAN
  SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN    
    
    (As Amended through the Sixth Amendment)    
    

  

 
 

HUNTSMAN 
  SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN    
    

        THIS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN is effective as of January 1, 1996 except as otherwise provided in this Plan. 

 
 

ARTICLE I    
    
    NAME    
    

        1.1    Name.    The Plan shall be known as "THE HUNTSMAN SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN" and is hereinafter
sometimes referred to as the "Plan". 

 
 

ARTICLE II    
    
    PURPOSE    
    

        2.1    Purpose.    This Plan herein set forth has been created for the primary purpose of providing benefits for
certain key employees that cannot be provided under the Huntsman Defined Benefit Pension Plan, the Huntsman Money Purchase Pension Plan and the Huntsman Salary Deferral Plan because of certain
limitations of current law and plan design. The Plan is intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of
management or highly compensated employees for purposes of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and shall be administered as such. 

 
 

ARTICLE III    
    
    DEFINITIONS    
    

        When used herein, the following words shall have the meanings indicated, unless the context clearly indicates otherwise: 

        3.1    Affiliate.    The word "Affiliate" means (i) a corporation which is a member of a controlled group of
corporations (within the meaning of Section 1563(a) of the Code determined without regard to Sections 1563(a)(4) and (e)(3)(C) thereof) which includes an Employer, provided that the phrase
"more than 50 percent" shall be substituted for the phrase "at least 80 percent" in Section 1563(a)(1) of the Code, and (ii) any trade or business (whether or not
incorporated) which is under common control (as defined in Section 414(c) of the Code as modified by Section 415(h) of the Code and regulations thereunder) with an Employer. 

        3.2    Beneficiary.    The word "Beneficiary" shall mean the person or persons entitled to receive benefits upon the
death of a Member under this Plan. 

        3.3    Change of Control.    The words "Change of Control" shall mean the replacement within any twelve
(12) month period of fifty percent (50%) or more of the members of the Board of Directors of the Employer followed within twelve (12) months by the termination of employment with the
Employer of twenty percent (20%) or more of the Members of this Plan. A transfer of an employee to an Affiliate of the Employer is not a termination of employment for purposes of this Plan (even if
the Affiliate is not participating in this Plan). Notwithstanding the foregoing, no Change of Control shall occur with respect to an Employer if there has been no material change in the ownership of
the stock of the Employer after application of the attribution rules of Code Section 318. 

        3.4    Code.    The word "Code" shall mean the Internal Revenue Code of 1986, as amended. 

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        3.5    Commencement Date.    The words "Commencement Date" shall mean the date selected by the Member on his/her
initial election form from among the following: 

        (a)   The
Termination Date; or 

        (b)   First
day of the year following the year containing the Termination Date. 

If
no election is properly made, the Commencement Date shall be the Termination Date. 

        The
Member may change the Commencement Date by submitting an election form to the Plan Administrator specifying a Commencement Date, provided, however, such election shall not be
effective unless: 

        (i)    the
Plan Administrator, in its sole discretion, approves the proposed Commencement Date; and 

        (ii)   the
election form is received by the Plan Administrator at least 30 days before the proposed Commencement Date. 

        3.6    Compensation.    The word "Compensation" has the following meaning: 

        (a)   "Compensation"
shall mean the total of all amounts paid by the Employer by reason of services performed by the Member, including any amount of Annual General Bonus
Program Pay and Discretionary Target Bonus Program Pay. 

        (b)   Notwithstanding
the foregoing, the Member's Compensation shall be determined without taking into account any of the following: 

        (1)   Contributions
or payments by the Employer for or on account of the Member under any employee benefit plan, including but not limited to any qualified pension plan and
any health or welfare plan; 

        (2)   Compensation
that is not subject to employer income tax withholding under Code Section 3402 (or any successor thereof); 

        (3)   Income
caused by the exercise of stock options; 

        (4)   Income
attributable to benefits received under any long term disability plan maintained by the Company; and 

        (5)   Automobile,
moving or entertainment allowances; special recognition award amounts; reimbursements for medical, professional or transportation expenses; excess group term
life insurance coverage or other life insurance coverage; tuition refunds; expense reimbursements and other fringe benefits including such things as physical exams and service awards. 

        (c)   Notwithstanding
the foregoing, a Member's Compensation shall include contributions made on behalf of the Member under a salary reduction agreement to any plan of the
Employer qualifying under Code Sections 125, 401(k), or 408(k), and any amounts earned during the applicable month but deferred at the election of the Member pursuant to the terms of the Huntsman
Supplemental Salary Deferral Plan. 

        3.7    Defined Benefit Pension Plan.    The words "Defined Benefit Pension Plan" mean the defined benefit pension plan
of the Employer in which the Member is participating. 

        3.8    Defined Benefit Pension Plan Member.    The words "Defined Benefit Pension Plan Member" shall mean any Member
of this Plan who is participating in the Defined Benefit Pension Plan. 

        3.9    Defined Benefit Pension Plan Past Service.    The words "Defined Benefit Pension Plan Past Service" mean the
service with a predecessor employer of a Member for which the Board of Directors of the Employer grants credit under this plan. 

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        3.10    Disability.    The word "Disability" shall mean any medically determinable physical or mental impairment which
is considered a permanent disability under the terms of the Defined Benefit Pension Plan. 

        3.11    Effective Date.    The "Effective Date" of this restated Plan shall be January 1, 1996, provided,
however, an Employer by a separate schedule to this Plan may make this Plan applicable to its employees on such date or dates as are specified in such schedule. 

        3.12    Employer.    The word "Employer" shall mean HUNTSMAN CORPORATION, a Utah corporation. 

        In
addition, unless the context indicates otherwise, as used in this Plan the term "EMPLOYER" shall also mean and include any other Affiliate of Huntsman Corporation that has been
granted permission by the board of directors of Huntsman Corporation to participate in this plan. This permission shall be granted under such conditions and upon such conditions as the board of
directors of Huntsman Corporation deems appropriate. By a separate schedule, an adopting employer shall set forth the manner in which this Plan will apply to its participating employees. The following
entities are participating employers: 

Huntsman
Chemical Corporation (formerly the plan sponsor)

Huntsman Polypropylene Corporation (now merged into Huntsman Corporation)

Huntsman Petrochemical Corporation (formerly Huntsman Corporation)

[Huntsman Purchasing Ltd] 

The
obligations of an Employer hereunder shall be limited to the employees of that Employer participating in this Plan. 

        3.13    Member.    The word "Member" means only an executive of the Employer who is specifically designated as a
Member. The designation shall specify the date as of which the executive becomes a Member of the Plan. The Chairman and the Chief Operating Officer of the Employer or either of them, shall have full
discretion to adjust the status of any individual that is an employee of that Employer for purposes of this Plan (whether to include an employee or to remove an employee). In the event an individual
ceases to be a Member of the Plan, any rights earned under this Plan prior to the change in status shall be paid to the individual at such time as it would otherwise have been, but for the change in
status, under the terms of this Plan. 

        3.14    Money Purchase Pension Plan.    The words "Money Purchase Pension Plan" mean the Huntsman Money Purchase
Pension Plan, and any predecessor or successor to that Plan. 

        3.15    Money Purchase Pension Plan Member.    The words "Money Purchase Pension Plan Member" shall mean any Member of
this Plan who is participating in the Money Purchase Pension Plan. 

        3.16    Money Purchase Pension Plan Past Service.    The words "Money Purchase Pension Plan Past Service" mean the
service with a predecessor employer of a Member for which the Board of Directors of the Employer grants credit under this plan. 

        3.17    Plan.    The word "PLAN" shall mean the Supplemental Executive Retirement Plan set forth in and by this
document, as the same may be amended from time to time. 

        3.18    Plan Administrator.    The words "Plan Administrator" shall mean the person or entity designated by the
President of [HUNTSMAN CORPORATION] to administer this Plan. In the absence of an effective designation, it shall mean the President of [HUNTSMAN
CORPORATION]. 

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        3.19    "Reasonable Cause" means any of the following, with respect to the Member's position with the Employer: 

        (a)   Gross
negligence, fraud, dishonesty or willful violation of any law or material violation of any significant Employer policy, committed in connection with the position
and resulting in a material adverse effect on the Employer; or 

        (b)   Failure
to substantially perform (for reasons other than medically determinable disability) the duties reasonably assigned or appropriate to the position, in a manner
reasonably consistent with prior practice; 

provided,
however, that the term "Reasonable Clause" shall not include ordinary negligence or failure to act, whether due to an error in judgment or otherwise, if the Member has exercised substantial
efforts in good faith to perform the duties reasonably assigned or appropriate to the position. 

        3.20    Termination Date.    The words "Termination Date" means the date the Member ceases to render services to the
Employer and all Affiliates for any reason whatsoever, voluntary or involuntary, other than be reason of death. 

        3.21    Vested Money Purchase Pension Plan Member.    The words "Vested Money Purchase Pension Plan Member" shall
mean: 

        (a)   a
Money Purchase Pension Plan Member who is credited with ten or more Years of Service; 

        (b)   a
Money Purchase Pension Plan Member who experiences a Termination Date on account of death or Disability; or 

        (c)   a
Money Purchase Pension Plan Member whose employment is terminated by the Employer without Reasonable Cause. 

Solely
for purposes of the benefit attributable to Money Purchase Pension Plan Past Service that is being provided by this Plan, a Vested Money Purchase Pension Plan Member shall include any Money
Purchase Pension Plan Member. 

        3.22    Vested Defined Benefit Pension Plan Member.    The words "Vested Defined Benefit Pension Plan Member" shall
mean: 

        (a)   a
Defined Benefit Pension Plan Member who is credited with ten or more Years of Service; 

        (b)   a
Defined Benefit Pension Plan Member who experiences a Termination Date on account of death or Disability; or 

        (c)   a
Defined Benefit Pension Plan Member whose employment is terminated by the Employer without Reasonable Cause. 

Solely
for purposes of the benefit attributable to Defined Benefit Pension Plan Past Service that is being provided by this Plan, a Vested Defined Benefit Pension Plan Member shall include any Defined
Benefit Pension Plan Member. 

        3.23    Year of Service.    The words "Year of Service" means a year of service as that term is defined under the
Defined Benefit Pension Plan, taking into account, however, only actual service with the Employer or an Affiliate of the Employer, and disregarding service for a prior employer credited under the
Defined Benefit Pension Plan if that prior employer is not (and was not) an Affiliate of the Employer. 

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ARTICLE IV    
    
    DEFINED BENEFIT PENSION PLAN SUPPLEMENTAL BENEFIT    
    

        4.1    Benefit.    A Vested Defined Benefit Pension Plan Member (or in the case of death benefits, the Beneficiary of
a Vested Defined Benefit Pension Plan Member) who becomes eligible to receive benefits under the Defined Benefit Pension Plan on or after the Effective Date of this Plan shall be entitled to a benefit
under this Plan equal to the positive difference, if any, between (a) and (b) below: 

        (a)   The
benefit that would have been received under the Defined Benefit Pension Plan if the benefit under the Defined Benefit Pension Plan were calculated (i) by
including the Defined Benefit Pension Plan Past Service of the Member, (ii) by taking into account the Compensation of the Member for each year that compensation is taken into account under the
Defined Benefit Pension Plan and (iii) without taking into account the limitations of Code Sections 415 and 401(a)(17). 

        (b)   The
benefit calculated under the provisions of the Defined Benefit Pension Plan taking into account the applicable provisions of the law. 

The
determination of the benefits payable to the Member under this Article and any present value determinations shall be made by an actuary using the assumptions and methods used under the Defined
Benefit Pension Plan for similar determinations. To the extent the Vested Defined Benefit Plan Member is entitled to receive benefits under more than one plan that is a Defined Benefit Pension Plan
hereunder, the Plan Administrator shall determine the manner in which the benefit hereunder shall be determined as to each Defined Benefit Pension Plan so as to accomplish the intent of this Plan
without providing duplicate benefits for the same service. 

        4.2    Payment of Benefits.    Benefits payable under this Article IV shall be paid beginning as of the date
you first became eligible to begin receiving a normal retirement benefit from the Defined Benefit Pension Plan; provided, however, you may change the date as of which the benefit becomes payable by
submitting a written request to the Plan Administrator. The change will not be effective unless the Plan Administrator, in its sole discretion, approves the proposed date, the proposed date is the
date as of which benefits will commence to the Member under the Defined Benefit Pension Plan and the request is received at least 30 days prior to the Termination Date. The normal form of the
benefit is a life annuity for the life of the Member, payable monthly. The amount due the Member shall be paid in one of the following forms as selected by the Member in writing (which if it is not
the normal form shall be the actuarial equivalent of the benefit expressed in the normal form): 

        (a)   An
annuity over the life of the Member; or 

        (b)   An
annuity for the life of the Member with payments guaranteed for 120 months, which payments during the guaranteed period shall be paid to the beneficiary of the
Member designated in writing by the Member to receive such benefits in the event of the prior death of the Member. If the beneficiary dies after he is eligible to receive benefits, the commuted value
of such benefits the beneficiary would otherwise receive shall be paid to the estate of the beneficiary. If the beneficiary dies before he is eligible to receive benefits and no other beneficiary has
been designated in writing by the Member, the commuted value of such benefits otherwise payable to a beneficiary shall be paid to the estate of the Member. 

        (c)   A
joint and survivor annuity with an annuitant designated by the Member prior to the time benefits start to be paid to the Member under which a reduced amount shall be
paid to the Member for his life, and his joint annuitant, if surviving at the Member's death, shall be entitled to receive thereafter a lifetime survivorship pension in a monthly amount equal to 50 or
100 percent (as designated by the Member prior to the time benefits start to be paid to the Member) of the amount which had been payable to the Member. 

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In
the event the Member makes no election as to the form of payment, the benefits of the Member shall be paid to the Member in the form of a life annuity. Notwithstanding the foregoing, in the event
the present value of the benefits under this Article with respect to a Defined Benefit Pension Plan do not exceed $25,000, such benefits shall be paid in the form of a single lump sum payment to the
Member without regard to the form of payment elected by the Member. 

        Any
death benefits payable under this Plan on account of the death of a Member prior to the commencement of benefits under this Plan shall be paid to the spouse of the Member in the form
of an annuity over the life of the spouse; provided, however, in the event the present value of the benefits
under this Article with respect to a Defined Benefit Pension Plan do not exceed $25,000, the benefits shall be paid in the form of a single lump sum payment to the spouse of the Member. There are no
preretirement death benefits under this plan for a Member who is not married on the date of death. 

        4.3    Change in Form of Payment.    A Member may change his/her election of the form of payment by submitting an
election form to the Plan Administrator at least 30 days prior to the Commencement Date; provided such election shall not be effective unless the Plan Administrator, in its sole discretion,
approves the form of payment selected. 

 
 

ARTICLE V    
    
    MONEY PURCHASE PENSION PLAN SUPPLEMENTAL BENEFIT    
    

        5.1    Benefits.    A Vested Money Purchase Pension Plan Member shall be entitled to a benefit under this Plan equal
to the sum of (a) and (b) below: 

        (a)   The
positive difference, if any, between (1) and (2) below: 

        (1)   The
sum of the annual contribution allocations that would have been credited to the account of the Money Purchase Pension Plan Member for each Plan Year if those
allocations had been made under the Money Purchase Pension Plan (i) by taking into account the Money Purchase Pension Plan Past Service of the Member, (ii) by taking into account the
Compensation of the Member for the Plan Year, and (iii) without taking into account the limitations of Code Sections 415 and 401(a)(17). 

        (2)   The
sum of the annual contribution allocations that have been credited to the account of said Money Purchase Pension Plan Member under the Money Purchase Pension Plan
for each Plan Year in accordance with the terms of the Money Purchase Pension Plan. 

        (b)   The
amount that would have been earned if the positive difference, if any, for each Plan Year determined under Section 5.1(a) above had been set aside on the last
day of the Plan Year (or on a quarterly basis during the Plan Year under rules established by the Plan Administrator for a Member during the period such Member is not entitled to participation at the
highest contribution level in the Money Purchase Pension Plan) in an account that under rules established by the Plan Administrator in its discretion had earned an investment return for the applicable
period equal to the investment return for the investments selected in advance by the Member from those made available by the Plan Administrator, or to the extent no selection has properly been made,
by crediting the account with the rate of return for the applicable period of a fixed income fund selected in its sole discretion by the Plan Administrator. The Plan Administrator shall prescribe such
rules as it deems necessary or appropriate regarding the crediting of earnings and the adjustments to be made in the way the earnings are credited to the accounts to reflect the timing of investment
elections made by the Member and the timing of amounts being credited or debited to the accounts. The account of a Member shall be debited with the amount paid to or on behalf of the Member under this
Plan. 

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        5.2    Statement of Accounts.    The Plan Administrator shall provide to each Member within one hundred twenty
(120) days after the close of each Plan Year, a statement in such form as the Plan Administrator selects setting forth the balance in the account of the Member as of the last day of the Plan
Year just ended. 

        5.3    Accounting Device Only.    The account shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to the Member under this Plan. The account shall not constitute or be treated as a trust fund of any kind. 

        5.4    Benefit Payment.    A Member shall be entitled to a payment equal to the amount credited to his/her account as
of the Commencement Date. The payment shall commence to be paid within 60 days of the Commencement Date. 

        5.5    Form of Payment.    The amount due the Member shall be paid in one of the following forms as elected by the
Member in writing: 

        (a)   single
lump sum payment; 

        (b)   a
life annuity purchased for an amount equal to the amount credited to the account from a legal reserve life insurance company; 

        (c)   a
joint and survivor annuity purchased for an amount equal to the amount credited to the account from a legal reserve life insurance company; or 

        (d)   installments
over a period certain selected by the Member that does not exceed 10 years. 

        In
the event payment is made in installments, the account used to measure the amount due the Member shall continue to be adjusted for interest under rules prescribed by the Plan
Administrator as provided in Section 5.1(b). In the event no form of payment is elected, the amount due the Member shall be paid in a form of installments over a 10 year period.
Notwithstanding the foregoing, in the event the amount due the Member under this Article does not exceed $25,000, such benefits shall be paid in the form of a single lump sum payment to the member
without regard to the form of payment elected by the Member. 

        5.6    Requirements for Valid Election as to Form of Payment.    An election of a Member as to the form of payment
(other than an election made at the time the Member became a Member of this Plan) shall not be valid (I) unless submitted in writing to the Plan Administrator at least 30 days prior to
the Commencement Date and (ii) unless the Plan Administrator, in its sole discretion, approves the form of payment selected. 

        5.7    Payment to Beneficiary.    In the event a Member dies before receiving his/her full benefit under this Article,
the Employer shall pay any remaining amount due on behalf of the Member hereunder to the Beneficiary of the Member. Such payment shall be in the form of a single cash payment and shall be paid within
60 days of the date of death. A Member may designate a Beneficiary on the form prescribed by and delivered to the Plan Administrator. If no Beneficiary is properly designated under this Plan,
then the Beneficiary shall be the person entitled under the terms of the Money Purchase Pension Plan to receive any death benefits payable under the Money Purchase Pension Plan on account of the death
of that Member. If there is no Beneficiary after application of the foregoing provisions of this Section, then the payment shall be made to the estate of the Member. 

        5.8    Payment of Benefits Accrued to September 30, 2001.    Notwithstanding anything in this Article V
to the contrary, the amount credited to the account of each Participant under this Article V as of September 30, 2001 (as adjusted for any prior distribution or distributions) shall be
paid to the Participant in a single cash payment as soon as reasonable practicable following September 30, 2001. Thereafter, any reference in this Plan to the account or the benefits of any
participant under Article V 

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shall
mean only the amounts that have been credited to the participant under this Article V for the period from and after October 1, 2001. 

 
 

ARTICLE VI    
    
    CHANGE OF CONTROL BENEFIT    
    

        In the event of the Change of Control, this Plan shall terminate as of the date of the Change of Control and no further benefits shall be paid under this Plan
except as provided in this Article VI. Each Member (and the Beneficiary of any deceased Member) shall be entitled to receive the present value of the benefits payable under this Plan,
calculated as follows: 

        (a)   In
the case of the benefits provided by Article IV, the present value shall be determined as an immediate lump sum payment equal to the present value of the
benefit payable under this Plan, calculated using the actuarial factors applicable to the Defined Benefit Pension Plan, as follows: 

        (1)   For
Members employed by the Employer on the date of the Change of Control, the benefits shall be calculated as if the Member terminated employment on such date; and 

        (2)   For
Members (or Beneficiaries) already receiving benefits when the Change of Control occurs, only the remaining unpaid benefits shall be considered in calculating the
amount payable under this Article VI. 

        (b)   In
the case of the benefits provided by Article V, the present value shall be the amount payable to the Member (or Beneficiary), if any, under the terms of
Article V as of the date of the Change of Control. 

The
benefits payable under this Article VI shall be paid in the form of a single cash lump sum payment within 60 days of the date of the Change of Control. 

 
 

ARTICLE VII    
    
    OTHER BENEFITS TAKEN INTO ACCOUNT    
    

        For purposes of this Plan, the Employer shall take into account and credit against its obligations hereunder with respect to any Defined Benefit Pension Plan
Member or Money Purchase Pension Plan Member (or the Beneficiary of such a Member), as the case may be, the actuarial value of any payments or benefits provided said Member that was intended to
compensate said Member for benefits that could not be provided under the Defined Benefit Pension Plan or the Money Purchase Pension Plan, as the case may be, but are intended to be provided under this
Plan. Any such payments or benefits shall be disregarded in calculating the compensation of a Member that is taken into account for purposes of calculating the unrestricted benefit or contribution
allocation under Sections 4.1(a) or 5.1(a). 

 
 

ARTICLE VIII    
    
    CLAIMS AND REVIEW PROCEDURES    
    

        8.1    Claims Procedure.    The Plan Administrator shall notify the Member or beneficiary ("claimant") in writing,
within ninety (90) days of his or her written application for benefits, of his or her eligibility or noneligibility for benefits under the Plan. If the Plan Administrator determines that a
claimant is not eligible for benefits or full benefits, the notice shall set forth (1) the specific reasons for such denial, (2) a specific reference to the provisions of the Plan on
which the denial is based, (3) a description of any additional information or material necessary for the claimant to perfect his or her claim, and a description of why it is needed, and
(4) an explanation of the Plan's claims review procedure and other appropriate information as to the steps to be taken if the claimant wishes to have the claim reviewed. If the Plan
Administrator determines that there are special circumstances requiring additional time to make a decision, the Plan Administrator shall notify the claimant of the special circumstances and the date
by which a decision is expected to be made, and may extend the time for up to an additional ninety-day period. 

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        8.2    Review Procedure.    If a claimant is determined by the Plan Administrator not to be eligible for benefits, or
if the claimant believes that he or she is entitled to greater or different benefits, the claimant shall have the opportunity to have such claim reviewed by the Plan Administrator by filing a petition
for review with the Plan Administrator within sixty (60) days after receipt of the notice issued by the Plan Administrator. Said petition shall state the specific reasons which the claimant
believes entitle him or her to benefits or to greater or different benefits. Within sixty (60) days after receipt by the Plan Administrator of the petition, the Plan Administrator shall afford
the claimant (and counsel, if any) an opportunity to present his or her position to the Plan Administrator orally or in writing, and the claimant (or counsel) shall have the right to review the
pertinent documents. The Plan Administrator shall notify the claimant of its decision in writing within the sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the claimant and the specific provisions of the Plan on which the decision is based. If, because of the need for a hearing, the sixty-day period is
not sufficient, the decision may be deferred for up to another sixty-day period at the election of the Plan Administrator, but notice of this deferral shall be given to the claimant. In
the event of the death of a claimant, the same procedures shall apply to the claimant's beneficiaries. 

 
 

ARTICLE IX    
    
    ADMINISTRATION OF THE PLAN    
    

        9.1    Plan Administration.    The Plan Administrator shall have the full authority to interpret and construe the Plan
and to issue such administrative procedures as it deems appropriate. The Plan Administrator shall have the duty and responsibility of maintaining records, making the requisite calculations and
disbursing the payments hereunder. The Plan Administrator's interpretations, determinations, regulations and calculations shall be final and binding on all persons and parties concerned. 

        9.2    Amendment and Termination.    

        (a)   The
Employer may amend or terminate the Plan as it relates to the employees of that Employer at any time, provided, however, that no such amendment or termination shall
adversely affect a benefit to which a terminated or retired Member or the Beneficiary of such Member is entitled prior to the date of such amendment or termination unless the Member becomes entitled
to an amount equal to such
benefit under another plan or practice of the Employer. The Plan Administrator may amend this Plan at anytime so long as the amendment does not materially increase the cost of the Plan to the
Employer. 

        (b)   During
a period beginning April 1, 2005 and ending December 31, 2005, a participant may by written notice to the Plan Administrator elect to terminate
participation in either the Defined Benefit Pension Plan Supplemental Benefit of Article IV of the Plan or the Money Purchase Pension Plan Supplemental Benefit of Article V of the Plan,
or both. The termination of participation in part or all of the Plan as set forth in the notice shall be effective on the date of the written notice. Thereafter the participant shall no longer
[accrue] any additional benefits under this Plan with respect to that portion of the Plan as to which the participant has terminated participation. The benefits of the
participant with respect to that portion of the Plan as to which the termination of participation has occurred shall be determined as if a Change of Control has occurred as of the date of the notice
and such benefits shall be paid to the participant in the time and manner set forth in Article VI. 

        9.3    Payments.    The Employer will pay all benefits arising under this Plan. There shall be deducted from each
payment any federal, state or local withholding or taxes or charges which may be required under applicable law as determined by the Employer. The benefits hereunder shall not be 

9

 

treated
as compensation from the Employer for purposes of any other benefit plan or program of the Employer unless specifically designated as compensation in such other benefit plan or program. 

        9.4    Non-assignability of Benefits.    The benefits payable hereunder or the right to receive future
benefits under the Plan may not be anticipated, alienated, pledged, encumbered, or subjected to any charge or legal process, and if any attempt is made to do so, or a person eligible for any benefits
becomes bankrupt, the interest under the Plan of the person affected may be terminated by the Plan Administrator which, in its sole discretion, may cause the same to be held or applied for the benefit
of one or more of the dependents of such person or make any other disposition of such benefits that it deems appropriate. 

        9.5    Status of Plan.    Nothing contained herein shall be construed as providing for assets to be held in trust or
escrow or any other form of asset segregation for the Member or for any other person or persons to whom benefits are to be paid pursuant to the terms of this plan, the Member's only interest hereunder
being the right to receive the benefits set forth herein. To the extent any person acquires a right to receive benefits under this Plan, such right shall be no greater than the right of any unsecured
general creditor of the Employer. 

        9.6    Indemnification.    To the extent permitted by law, the Employer shall indemnify each member of the Board of
Directors and any other employee of the Employer to whom duties are assigned with respect
to this Plan, against expenses (including any amount paid in settlement) reasonably incurred by him/her in connection with any claims against him/her by reason of his/her conduct in the performance of
his/her duties under the Plan, except in relation to matters as to which he/she acted fraudulently or in bad faith in the performance of such duties. This right of indemnification shall be in addition
to any other right to which the Board or other person may be entitled as a matter of law or otherwise, and shall pass to the estate of a deceased person. 

        9.7    Reports and Records.    The Plan Administrator and those to whom the Plan Administrator has delegated duties
under the Plan shall keep records of all their proceedings and actions and shall maintain books of account, records, and other data as shall be necessary for the proper administration of the Plan and
for compliance with applicable law. 

        9.8    Finances.    The costs of the Plan shall be borne by the Employer. The rights of the Member (or of his
Beneficiary) to benefits under the Plan shall be solely those of an unsecured general creditor of the Employer. Any assets acquired by or held by the Employer or set aside in a trust set up by the
Employer shall not be deemed to be held as security for the performance of the obligations of the Employer under this Plan. Notwithstanding the foregoing, to the extent under the terms of a trust set
up by the Employer payments are made by the Trustee of said Trust to the Member with respect to benefits under this Plan, such payments shall satisfy the obligations of the Employer hereunder to the
extent of the payments made. 

        9.9    Nonguarantee of Employment.    Nothing contained in this Plan shall be construed as a contract of employment
between the Employer and any Member, or as a right of any Member to be continued in employment of the Employer, or as a limitation on the right of the Employer to discharge any of its employees, with
or without cause. 

        9.10    Applicable Law.    All questions pertaining to the construction, validity and effect of the Plan shall be
determined in accordance with the laws of the United States and to the extent not pre-empted by such laws, by the laws of the State of Utah. 

        9.11    Headings.    The headings of Sections and Articles in this Plan are for convenience purposes only and shall in
no way control or be used in the interpretation of the content of the Sections or Articles or this Plan as a whole. 

10

 

        9.12    Number and Gender.    Where the context requires, the singular shall include the plural and the plural shall
include the singular, and any gender shall include both other genders. 

 
 

ARTICLE X    
    
    TRANSFER OF EMPLOYEES AMONG AFFILIATED COMPANIES    
    

        The transfer of a Member from employment with the Employer to employment with an Affiliate shall not be deemed a termination of employment under this Plan. If the
Affiliate is an Employer under this Plan, that Employer shall determine whether the Member shall continue to participate in this Plan as an employee of that Employer. Each Employer shall maintain the
accounts or benefit for the Member that relates to the benefits earned as an employee of that Employer (based upon the manner in which the benefits under the underlying qualified plan to which the
account or benefit relates are attributed among the employers as determined in its discretion by the Plan Administrator of this Plan); provided however, the Employers may agree among themselves to
transfer the obligations among themselves so that the benefits under the Plan are paid through a single Employer. 

        To
the extent a succeeding Employer permits Employee to participate in this Plan, such Employer shall determine the extent to which the prior elections made by the Member shall continue
to apply to the Member. In the event the Member is transferred to an Affiliate that does not participate in this Plan, the Member shall cease to participate in this Plan but the former Employer shall
continue to maintain the accounts and benefits of the Member earned under this Plan until the benefits become payable to the Member hereunder. 

11

 

Adopted
this 29th day of December, 1997. 

	 	 	HUNTSMAN CHEMICAL CORPORATION
	

 	
 	

/s/  PETER R. HUNTSMAN      
 President
	

 	
 	

PARTICIPATING EMPLOYERS:
	

 	
 	

HUNTSMAN CORPORATION

for itself and as successor in interest by merger to HUNTSMAN POLYPROPYLENE CORPORATION
	

 	
 	

/s/  PETER R. HUNTSMAN      
 President
	

 	
 	

HUNTSMAN PETROCHEMICAL CORPORATION
	

 	
 	

/s/  PETER R. HUNTSMAN      
 President

12

 

	

FIRST AMENDMENT EXECUTED and EFFECTIVE as of December 1, 1998:
	

 	
 	

HUNTSMAN BENEFITS COMMITTEE
	

SECOND AMENDMENT EXECUTED as of December 17, 1998, EFFECTIVE December 17, 1998:
	

 	
 	

HUNTSMAN CHEMICAL CORPORATION
	

 	
 	

/s/  PETER R. HUNTSMAN      
 President
	

 	
 	

HUNTSMAN CORPORATION
	

 	
 	

/s/  PETER R. HUNTSMAN      
 President
	

THIRD AMENDMENT EXECUTED as of January 1, 2000 and EFFECTIVE January 1, 2000:
	

 	
 	

HUNTSMAN BENEFITS COMMITTEE
	

FOURTH AMENDMENT EXECUTED as of August 16, 2001, EFFECTIVE January 1, 2001:
	

 	
 	

HUNTSMAN BENEFITS COMMITTEE
	

FIFTH AMENDMENT executed as of September 26, 2001, EFFECTIVE September 30, 2001:
	

 	
 	

HUNTSMAN CORPORATION
	

 	
 	

By	

/s/  WILLIAM CHAPMAN      
 Vice President
	

 	
 	

HUNTSMAN PETROCHEMICAL CORPORATION
	

 	
 	

By	

/s/  BRIAN V. RIDD      

	

 	
 	

HUNTSMAN PURCHASING LTD.
	

 	
 	

By:	

Huntsman Procurement Corporation,

General Partner
	

 	
 	

/s/  SAMUEL SCRUGGS      
 Vice President
	

SIXTH AMENDMENT executed as of April 21, 2005, EFFECTIVE January 1, 2005.
	

 	
 	

HUNTSMAN LLC
	

 	
 	

/s/  J. KIMO ESPLIN      
 Executive Vice President

13

 
 

SCHEDULE FOR HUNTSMAN CHEMICAL CORPORATION    
    

        This Plan is effective for designated employees of Huntsman Chemical Corporation beginning January 1, 1996. Some members have been granted Defined Benefit
Pension Plan Past Service and Money Purchase Pension Plan Past Service for service with a prior employer for purposes of this Plan. 

 
 

SCHEDULE FOR HUNTSMAN POLYPROPYLENE CORPORATION    
    

        This Plan is effective for employees of Huntsman Polypropylene Corporation beginning January 1, 1996. Some members have been granted Defined Benefit
Pension Plan Past Service and Money Purchase Pension Plan Past Service for service with a prior employer for purposes of this Plan. 

 
 

SCHEDULE FOR HUNTSMAN CORPORATION
  (formerly Huntsman Group Holdings Corporation)    
    

        This Plan is effective for employees of Huntsman Corporation (formerly Huntsman Group Holdings Corporation) beginning February 1, 1996. Some members have
been granted Defined Benefit Pension Plan Past Service and Money Purchase Pension Plan Past Service for service with a prior employer for purposes of this Plan. 

 
 

SCHEDULE FOR HUNTSMAN PETROCHEMICAL CORPORATION
  (formerly Huntsman Corporation)    
    

        This Plan is effective for employees of Huntsman Petrochemical Corporation (formerly Huntsman Corporation) beginning January 1, 1996. 

        For
purposes of determining Years of Service under Section 3.23, notwithstanding the provisions of Section 3.23, the employees of Huntsman Petrochemical Corporation shall
be credited with such service for Texaco and its affiliates credited to them under the Defined Benefit Pension Plan; provided, however, no more than 5 years of such service shall be taken into
account for purposes of Section 3.23. 

        For
purposes of determining the benefit payable to an employee of Huntsman Petrochemical Corporation under Section 4.1, only up to 5 years of past service with Texaco and
its affiliates shall be taken into account. [The Board of Directors in October of 1999 gave participants then in the Plan who were an employee of Texaco Chemical in April of 1994 at the
time it became Huntsman Petrochemical Corporation credit for service with Texaco and its affiliates for purposes of determining the benefit of such participant under the defined benefit portion of
this Plan.] 

        For
purposes of determining the benefit payable to an employee of Huntsman Petrochemical Corporation under Section 5.1, service for Texaco and its affiliates credited to him or
her under the Money Purchase Pension Plan shall be taken into account. The Plan Administrator in its sole discretion shall determine the manner in which the benefits under this Plan are calculated for
such employees so as to take into account only the past service authorized by these provisions of this Plan. 

QuickLinks

Exhibit 10.1

HUNTSMAN SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (As Amended through the Sixth Amendment)

HUNTSMAN SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

ARTICLE I NAME

ARTICLE II PURPOSE

ARTICLE III DEFINITIONS

ARTICLE IV DEFINED BENEFIT PENSION PLAN SUPPLEMENTAL BENEFIT

ARTICLE V MONEY PURCHASE PENSION PLAN SUPPLEMENTAL BENEFIT

ARTICLE VI CHANGE OF CONTROL BENEFIT

ARTICLE VII OTHER BENEFITS TAKEN INTO ACCOUNT

ARTICLE VIII CLAIMS AND REVIEW PROCEDURES

ARTICLE IX ADMINISTRATION OF THE PLAN

ARTICLE X TRANSFER OF EMPLOYEES AMONG AFFILIATED COMPANIES

SCHEDULE FOR HUNTSMAN CHEMICAL CORPORATION

SCHEDULE FOR HUNTSMAN POLYPROPYLENE CORPORATION

SCHEDULE FOR HUNTSMAN CORPORATION (formerly Huntsman Group Holdings Corporation)

SCHEDULE FOR HUNTSMAN PETROCHEMICAL CORPORATION (formerly Huntsman Corporation)Exhibit 10.1

 

 

ROLLER BEARING COMPANY OF AMERICA, INC.

Issuer

 

9 5/8% Senior Subordinated Notes Due 2007

INDENTURE

 

Dated as of June 15, 1997

 

UNITED STATES TRUST COMPANY OF NEW YORK,

Trustee

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1

  
	
   

  
	
  Definitions
  and Incorporation by Reference

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
   

  
	
  SECTION 1.02.

  	
  Other Definitions

  	
   

  
	
  SECTION 1.03.

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  
	
  SECTION 1.04.

  	
  Rules of
  Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  
	
   

  
	
  The
  Securities

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Form and
  Dating

  	
   

  
	
  SECTION 2.02.

  	
  Execution and
  Authentication

  	
   

  
	
  SECTION 2.03.

  	
  Registrar and
  Paying Agent

  	
   

  
	
  SECTION 2.04.

  	
  Paying Agent
  To Hold Money in Trust

  	
   

  
	
  SECTION 2.05.

  	
  Securityholder
  Lists

  	
   

  
	
  SECTION 2.06.

  	
  Replacement
  Securities

  	
   

  
	
  SECTION 2.07.

  	
  Outstanding
  Securities

  	
   

  
	
  SECTION 2.08.

  	
  Temporary
  Securities

  	
   

  
	
  SECTION 2.09.

  	
  Cancelation

  	
   

  
	
  SECTION 2.10.

  	
  Defaulted
  Interest

  	
   

  
	
  SECTION 2.11.

  	
  CUSIP Numbers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  
	
   

  
	
  Redemption

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Notices to
  Trustee

  	
   

  
	
  SECTION 3.02.

  	
  Selection of
  Securities To Be Redeemed

  	
   

  
	
  SECTION 3.03.

  	
  Notice of
  Redemption

  	
   

  
	
  SECTION 3.04.

  	
  Effect of
  Notice of Redemption

  	
   

  
	
  SECTION 3.05.

  	
  Deposit of
  Redemption Price

  	
   

  
	
  SECTION 3.06.

  	
  Securities
  Redeemed in Part

  	
   

  

 

 

	
  ARTICLE 4

  
	
   

  
	
  Covenants

  
	
   

  
	
  SECTION 4.01.

  	
  Payment of Securities

  	
   

  
	
  SECTION 4.02.

  	
  SEC Reports

  	
   

  
	
  SECTION 4.03.

  	
  Limitation on
  Indebtedness

  	
   

  
	
  SECTION 4.04.

  	
  Limitation
  on Restricted Payments

  	
   

  
	
  SECTION 4.05.

  	
  Limitation
  on Restrictions on Distributions from Restricted Subsidiaries

  	
   

  
	
  SECTION 4.06.

  	
  Limitation
  on Sales of Assets and Subsidiary Stock

  	
   

  
	
  SECTION 4.07.

  	
  Limitation
  on Affiliate Transactions

  	
   

  
	
  SECTION 4.08.

  	
  Limitation
  on the Sale or Issuance of Capital Stock of Restricted Subsidiaries

  	
   

  
	
  SECTION 4.09.

  	
  Change
  of Control

  	
   

  
	
  SECTION 4.10.

  	
  Future
  Guarantors

  	
   

  
	
  SECTION 4.11.

  	
  Existence

  	
   

  
	
  SECTION 4.12.

  	
  Compliance
  Certificate

  	
   

  
	
  SECTION 4.13.

  	
  Further
  Instruments and Acts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  
	
   

  	
   

  	
   

  
	
  Successor Company

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  When
  Company May Merge or Transfer Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  
	
   

  	
   

  	
   

  
	
  Defaults and Remedies

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Events
  of Default

  	
   

  
	
  SECTION 6.02.

  	
  Acceleration

  	
   

  
	
  SECTION 6.03.

  	
  Other
  Remedies

  	
   

  
	
  SECTION 6.04.

  	
  Waiver
  of Past Defaults

  	
   

  
	
  SECTION 6.05.

  	
  Control
  by Majority

  	
   

  
	
  SECTION 6.06.

  	
  Limitation
  on Suits

  	
   

  

 

2

 

	
  SECTION 6.07.

  	
  Rights
  of Holders to Receive Payment

  	
   

  
	
  SECTION 6.08.

  	
  Collection
  Suit by Trustee

  	
   

  
	
  SECTION 6.09.

  	
  Trustee
  May File Proofs of Claim

  	
   

  
	
  SECTION 6.10.

  	
  Priorities

  	
   

  
	
  SECTION 6.11.

  	
  Undertaking
  for Costs

  	
   

  
	
  SECTION 6.12.

  	
  Waiver
  of Stay or Extension Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  
	
   

  	
   

  	
   

  
	
  Trustee

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Duties
  of Trustee

  	
   

  
	
  SECTION 7.02.

  	
  Rights
  of Trustee

  	
   

  
	
  SECTION 7.03.

  	
  Individual
  Rights of Trustee

  	
   

  
	
  SECTION 7.04.

  	
  Trustee’s
  Disclaimer

  	
   

  
	
  SECTION 7.05.

  	
  Notice
  of Defaults

  	
   

  
	
  SECTION 7.06.

  	
  Reports
  by Trustee to Holders

  	
   

  
	
  SECTION 7.07.

  	
  Compensation
  and Indemnity

  	
   

  
	
  SECTION 7.08.

  	
  Replacement
  of Trustee

  	
   

  
	
  SECTION 7.09.

  	
  Successor
  Trustee by Merger

  	
   

  
	
  SECTION 7.10.

  	
  Eligibility;
  Disqualification

  	
   

  
	
  SECTION 7.11.

  	
  Preferential
  Collection of Claims Against Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  
	
   

  	
   

  	
   

  
	
  Discharge of
  Indenture; Defeasance

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  Discharge
  of Liability on Securities; Defeasance

  	
   

  
	
  SECTION 8.02.

  	
  Conditions
  to Defeasance

  	
   

  
	
  SECTION 8.03.

  	
  Application
  of Trust Money

  	
   

  
	
  SECTION 8.04.

  	
  Repayment
  to Company

  	
   

  
	
  SECTION 8.05.

  	
  Indemnity
  for Government Obligations

  	
   

  
	
  SECTION 8.06.

  	
  Reinstatement

  	
   

  

 

3

 

	
  ARTICLE 9

  
	
   

  	
   

  	
   

  
	
  Amendments

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Without
  Consent of Holders

  	
   

  
	
  SECTION 9.02.

  	
  With
  Consent of Holders

  	
   

  
	
  SECTION 9.03.

  	
  Compliance
  with Trust Indenture

  	
   

  
	
  SECTION 9.04.

  	
  Revocation
  and Effect of Consents and Waivers

  	
   

  
	
  SECTION 9.05.

  	
  Notation
  on or Exchange of Securities

  	
   

  
	
  SECTION 9.06.

  	
  Trustee
  To Sign Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  
	
   

  	
   

  	
   

  
	
  Subordination

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  Agreement
  To Subordinate

  	
   

  
	
  SECTION 10.02.

  	
  Liquidation,
  Dissolution, Bankruptcy

  	
   

  
	
  SECTION 10.03.

  	
  Default
  on Senior Indebtedness

  	
   

  
	
  SECTION 10.04.

  	
  Acceleration
  of Payment of Securities

  	
   

  
	
  SECTION 10.05.

  	
  When
  Distribution Must Be Paid Over

  	
   

  
	
  SECTION 10.06.

  	
  Subrogation

  	
   

  
	
  SECTION 10.07.

  	
  Relative
  Rights

  	
   

  
	
  SECTION 10.08.

  	
  Subordination
  May Not be Impaired by Company

  	
   

  
	
  SECTION 10.09.

  	
  Rights
  of Trustee and Paying Agent

  	
   

  
	
  SECTION 10.10.

  	
  Distribution
  or Notice to Representative

  	
   

  
	
  SECTION 10.11.

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

  	
   

  
	
  SECTION 10.12.

  	
  Trust
  Moneys Not Subordinated

  	
   

  
	
  SECTION 10.13.

  	
  Trustee
  Entitled To Rely

  	
   

  
	
  SECTION 10.14.

  	
  Trustee
  To Effectuate Subordination

  	
   

  
	
  SECTION 10.15.

  	
  Trustee
  Not Fiduciary for Holders of Senior Indebtedness

  	
   

  
	
  SECTION 10.16.

  	
  Reliance
  by Holders of Senior Indebtedness on Subordination Provisions

  	
   

  

 

4

 

	
  ARTICLE 11

  
	
   

  
	
  Subsidiary Guaranties

  
	
   

  
	
  SECTION 11.01.

  	
  Guaranties

  	
   

  
	
  SECTION 11.02.

  	
  Limitation
  on Liability

  	
   

  
	
  SECTION 11.03.

  	
  Successors
  and Assigns

  	
   

  
	
  SECTION 11.04.

  	
  No
  Waiver

  	
   

  
	
  SECTION 11.05.

  	
  Modification

  	
   

  
	
  SECTION 11.06.

  	
  Release
  of Subsidiary Guarantor

  	
   

  
	
   

  
	
  ARTICLE 12

  
	
   

  
	
  Subordination of
  Subsidiary Guaranties

  
	
   

  
	
  SECTION 12.01.

  	
  Agreement
  To Subordinate

  	
   

  
	
  SECTION 12.02.

  	
  Liquidation,
  Dissolution, Bankruptcy

  	
   

  
	
  SECTION 12.03.

  	
  Default
  on Senior Indebtedness of Subsidiary Guarantor

  	
   

  
	
  SECTION 12.04.

  	
  Demand
  for Payment

  	
   

  
	
  SECTION 12.05.

  	
  When
  Distribution Must Be Paid Over

  	
   

  
	
  SECTION 12.06.

  	
  Subrogation

  	
   

  
	
  SECTION 12.07.

  	
  Relative
  Rights

  	
   

  
	
  SECTION 12.08.

  	
  Subordination
  May Not Be Impaired by Subsidiary Guarantor

  	
   

  
	
  SECTION 12.09.

  	
  Rights
  of Trustee and Paying Agent

  	
   

  
	
  SECTION 12.10.

  	
  Distribution
  or Notice to Representative

  	
   

  
	
  SECTION 12.11.

  	
  Article 12
  Not To Prevent Defaults Under a Subsidiary Guaranty or Limit Right To Demand
  Payment

  	
   

  
	
  SECTION 12.12.

  	
  Trustee
  Entitled to Rely

  	
   

  
	
  SECTION 12.13.

  	
  Trustee
  To Effectuate Subordination

  	
   

  
	
  SECTION 12.14.

  	
  Trustee
  Not Fiduciary for Holders of Senior Indebtedness of Subsidiary Guarantor

  	
   

  
	
  SECTION 12.15.

  	
  Reliance
  by Holders of Senior Indebtedness on Subordination Provisions

  	
   

  

 

5

 

	
  ARTICLE 13

  	
   

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01.

  	
  Trust
  Indenture Act Controls

  	
   

  
	
  SECTION 13.02.

  	
  Notices

  	
   

  
	
  SECTION 13.03.

  	
  Communication
  by Holders with Other Holders

  	
   

  
	
  SECTION 13.04.

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  
	
  SECTION 13.05.

  	
  Statements
  Required in Certificate or Opinion

  	
   

  
	
  SECTION 13.06.

  	
  When
  Securities Disregarded

  	
   

  
	
  SECTION 13.07.

  	
  Rules by
  Trustee, Paying Agent and Registrar

  	
   

  
	
  SECTION 13.08.

  	
  Legal
  Holidays

  	
   

  
	
  SECTION 13.09.

  	
  Governing
  Law

  	
   

  
	
  SECTION 13.10.

  	
  No
  Recourse Against Others

  	
   

  
	
  SECTION 13.11.

  	
  Successors

  	
   

  
	
  SECTION 13.12.

  	
  Multiple
  Originals

  	
   

  
	
  SECTION 13.13.

  	
  Table
  of Contents; Headings

  	
   

  
	
  Exhibit A
  - Form of Security

  	
   

  
	
  Rule 144A/Regulation
  S Appendix

  	
   

  

 

6

 

CROSS-REFERENCE TABLE

 

	
  TIA

  	
   

  	
   

  
	
  Section

  	
   

  	
  Indenture
  Section

  
	
  310

  	
  (a) (1)

  	
   

  	
  7.10

  
	
   

  	
  (a) (2)

  	
   

  	
  7.10

  
	
   

  	
  (a) (3)

  	
   

  	
  N.A.

  
	
   

  	
  (a) (4)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  7.08; 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

  
	
   

  	
  (c)

  	
   

  	
  13.02

  
	
   

  	
  (d)

  	
   

  	
  7.06 

  
	
  314

  	
  (a)

  	
   

  	
  4.02; 4.10; 13.02

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c) (1)

  	
   

  	
  13.04

  
	
   

  	
  (c) (2)

  	
   

  	
  13.04

  
	
   

  	
  (c) (3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  13.05

  
	
   

  	
  (f)

  	
   

  	
  4.10 

  
	
  315

  	
  (a)

  	
   

  	
  7.01

  
	
   

  	
  (b)

  	
   

  	
  7.05; 13.02

  
	
   

  	
  (c)

  	
   

  	
  7.01

  
	
   

  	
  (d)

  	
   

  	
  7.01

  
	
   

  	
  (e)

  	
   

  	
  6.11 

  
	
  316

  	
  (a) (last sentence)

  	
  13.06

  
	
   

  	
  (a) (1) (A)

  	
   

  	
  6.05

  
	
   

  	
  (a) (1) (B)

  	
   

  	
  6.04

  
	
   

  	
  (a) (2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07 

  
	
  317

  	
  (a) (1)

  	
   

  	
  6.08

  
	
   

  	
  (a) (2)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  2.04 

  
	
  318

  	
  (a)

  	
   

  	
  13.01

  

 

7

 

	
   

  	
   

  	
  N.A. means Not Applicable.

  	
   

  

 

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

 

8

 

INDENTURE dated as of June 15, 1997, among ROLLER BEARING COMPANY
OF AMERICA, INC., a Delaware corporation (the “Company”), INDUSTRIAL TECTONICS
BEARINGS CORPORATION, a Delaware corporation and a wholly owned subsidiary of
the Company, RBC LINEAR PRECISION PRODUCTS, INC., a Delaware corporation and a
wholly owned subsidiary of the Company, and RBC NICE BEARINGS, INC., a Delaware
corporation and a wholly owned subsidiary of the Company, and UNITED STATES
TRUST COMPANY OF NEW YORK, a New York trust company (the “Trustee”).

 

Each
party agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders of the Company’s 9-5/8% Senior Subordinated
Notes Due 2007 (the “Initial Securities”) and, if and when issued pursuant to a
registered exchange for Initial Securities, the Company’s 9-5/8% Senior
Subordinated Notes Due 2007 (the “Exchange Securities”) and, if and when issued
pursuant to a private exchange for Initial Securities the Company’s 9-5/8%
Senior Subordinated Notes Due 2007 (the “Private Exchange Securities” and,
together with the Initial Securities and the Exchange Securities, the
“Securities”):

 

ARTICLE 1

 

Definitions
and Incorporation by Reference

 

SECTION 1.01.
Definitions.

 

“Additional
Assets” means (i) any property or assets (other than Indebtedness and
Capital Stock) in a Related Business; (ii) the Capital Stock of a Person
that becomes a Restricted Subsidiary as a result of the acquisition of such
Capital Stock by the Company or another Restricted Subsidiary; or (iii) Capital
Stock constituting a minority interest in any Person that at such time is a

 

 

Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clauses (ii) or
(iii) above is primarily engaged in a Related Business.

 

“Affiliate”
of any specified Person means any other Person, directly or indirectly,
controlling or controlled by or under direct or indirect common control with
such specified Person. For the purposes of this definition, “control” when used
with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing. For purposes of
Sections 4.04, 4.06 and 4.07 only, “Affiliate” shall also mean any beneficial
owner of Capital Stock representing 10% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Capital Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.

 

“Asset
Disposition” means any sale, lease, transfer or other disposition (or series of
related sales, leases, transfers or dispositions) by the Company or any
Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a “disposition”), of (i) any shares of Capital Stock of a
Restricted Subsidiary (other than directors’ qualifying shares or shares
required by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary), (ii) all or substantially all the assets of any
division or line of business of the Company or any Restricted Subsidiary or (iii) any
other assets of the Company or any Restricted Subsidiary outside of the
ordinary course of business of the Company or such Restricted Subsidiary (other
than, in the case of (i), (ii) and (iii) above, (x) a disposition by
a Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (y) for purposes of Section 4.06
only, a disposition that

 

2

 

constitutes a Restricted
Payment permitted by Section 4.04 and (z) disposition of assets with a fair
market value of less than $250,000).

 

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

 

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

 

“Banks”
has the meaning specified in the Credit Agreement.

 

“Bank
Indebtedness” means all Obligations pursuant to the Credit Agreement.

 

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

 

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

 

“Capital
Lease Obligations” means an obligation that is required to be classified and
accounted for as a capital lease for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligation shall
be the capitalized amount of such obligation determined in accordance with
GAAP; and the

 

3

 

Stated Maturity thereof shall
be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.

 

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

 

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

 

(i) (A) any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders, is
or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause (i) such
person shall be deemed to have “beneficial ownership” of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 35% of the total voting power of the Voting Stock of the Parent and (B) the
Permitted Holders beneficially own (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, in the aggregate
less than 30% of the total voting power of the Voting Stock of the Parent and
do not have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the Board of Directors (for the
purposes of this clause (i), such other person shall be deemed to beneficially
own any Voting Stock of a specified Person held by another Person (the “parent
entity”), if such other person is the beneficial owner (as defined at the
beginning of this clause (i)), directly or indirectly, of more than 35% of the
voting power of the Voting Stock of such parent entity and the Permitted
Holders beneficially own (as defined in this clause), directly or

 

4

 

indirectly,
in the aggregate a lesser percentage of the voting power of the Voting Stock of
such parent entity and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the
board of directors of such parent entity);

 

(ii) during any period of two consecutive years following the first
date on which Holdings becomes subject to the proxy rules under the
Exchange Act, individuals who at the beginning of such period constituted the
board of directors of the Parent (together with any new directors whose
election by such board of directors or whose nomination for election by the
shareholders of the Parent was approved by a vote of 66-2/3% of the directors
of the Parent then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of the Parent then in office;

 

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

 

5

 

(iv) the Parent ceases to own, directly or indirectly, all the
Capital Stock of the Company other than as a result of the merger or
consolidation of the Parent with the Company.

 

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

 

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

 

“Consolidated
Coverage Ratio” as of any date of determination means the ratio of (i) the
aggregate amount of EBITDA for the period of the most recent four consecutive
fiscal quarters prior to the date of such determination for which financial
statements are available to (ii) Consolidated Interest Expense for such
four fiscal quarters; provided, however, that (1) if the Company or any
Restricted Subsidiary has Incurred any Indebtedness since the beginning of such
period that remains outstanding or if the transaction giving rise to the need
to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness,
or both, EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period and the
discharge of any other Indebtedness repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such period, (2) if the Company or any
Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged
any Indebtedness since the beginning of such period or if any Indebtedness is
to be repaid, repurchased, defeased or otherwise discharged (in each case other
than Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the date
of the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio, EBITDA and Consolidated

 

6

 

Interest Expense for such
period shall be calculated on a pro forma basis as if such discharge had
occurred on the first day of such period and as if the Company or such
Restricted Subsidiary has not earned the interest income actually earned during
such period in respect of cash or Temporary Cash Investments used to repay,
repurchase, defease or otherwise discharge such Indebtedness, (3) if since
the beginning of such period the Company or any Restricted Subsidiary shall
have made any Asset Disposition, the EBITDA for such period shall be reduced by
an amount equal to the EBITDA (if positive) directly attributable to the assets
which are the subject of such Asset Disposition for such period, or increased
by an amount equal to the EBITDA (if negative), directly attributable thereto
for such period and Consolidated Interest Expense for such period shall be
reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the
Company and its continuing Restricted Subsidiaries in connection with such
Asset Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent
the Company and its continuing Restricted Subsidiaries are no longer liable for
such Indebtedness after such sale), (4) if since the beginning of such
period the Company or any Restricted Subsidiary (by merger or otherwise) shall
have made an Investment in any Restricted Subsidiary (or any person which
becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period and (5) if since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning

 

7

 

of such period) shall have
made any Asset Disposition, any Investment or acquisition of assets that would
have required an adjustment pursuant to clause (3) or (4) above if
made by the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto as if such Asset Disposition, Investment or
acquisition occurred on the first day of such period. For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of
12 months).

 

“Consolidated
Debt Ratio” as of any date of determination means, the ratio of (i) consolidated
Indebtedness of the Company as of the end of the most recent fiscal quarter for
which financial statements are available to (ii) the aggregate amount of
the EBITDA of the Company for the four most recent fiscal quarters for which
financial statements are available, in each case with such pro forma
adjustments to consolidated Indebtedness and EBITDA as are appropriate and
consistent with the pro forma provisions set forth in the definition of
Consolidated Coverage Ratio.

 

“Consolidated
Interest Expense” means, for any period, the total interest expense of the
Company and its consolidated Restricted Subsidiaries, plus, to the extent not
included in such interest expense, and to the extent incurred by the Company or
its Restricted Subsidiaries, without duplication, (i) interest expense
attributable to capital leases and the interest expense attributable to leases
constituting part of a Sale/Leaseback Transaction,

 

8

 

(ii) amortization of
debt discount and debt issuance cost, (iii) capitalized interest, (iv) non-cash
interest expenses, (v) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing, (vi) net
costs associated with Hedging Obligations (including amortization of fees), (vii) Preferred
Stock dividends in respect of all Preferred Stock held by Persons other than
the Company or a Wholly Owned Subsidiary, (viii) interest incurred in
connection with Investments in discontinued operations, (ix) interest
accruing on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by (or secured by the assets of) the Company or any
Restricted Subsidiary and (x) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust.

 

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

 

(i)  any net income of any Person (other than the Company) if such
  Person is not a Restricted Subsidiary, except
that (A) subject to the exclusion contained in clause (iv) below, the
Company’s equity in the net   income of any such Person for such period
shall be included in such   Consolidated Net Income up to the aggregate
amount of cash actually distributed
by such Person with respect to such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the   case
of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (iii) below)
and (B) the Company’s   equity in a net loss of any such Person for
such period shall be included in
determining such Consolidated Net Income;

 

(ii)  any net income (or loss) of any Person acquired by the
Company or a Subsidiary in a pooling of

 

9

 

interests
transaction for any period prior to the date of such acquisition;

 

(iii)  any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on
the payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A) subject
to the exclusion contained in clause (iv) below, the Company’s equity in
the net income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Restricted Subsidiary with respect to such period
to the Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution paid to
another Restricted Subsidiary, to the limitation contained in this clause) and (B) the
Company’s equity in a net loss of any such Restricted Subsidiary for such
period shall be included in determining such Consolidated Net Income;

 

(iv)  any gain or loss realized upon the sale or other disposition
of any assets of the Company or its consolidated Subsidiaries (including
pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise
disposed of in the ordinary course of business and any gain or loss realized
upon the sale or other disposition of any Capital Stock of any Person;

 

(v) extraordinary gains or losses; and

 

(vi) the cumulative effect of a change in accounting
principles.  Notwithstanding the
foregoing, for the purpose of Section 4.04 only, there shall be excluded
from Consolidated Net Income any dividends, repayments of loans or advances or
other transfers of assets from Unrestricted Subsidiaries to the Company or a
Restricted Subsidiary to the extent such dividends, repayments or transfers
increase the amount of

 

10

 

Restricted
Payments permitted pursuant to such Section 4.04(a)(3)(D).

 

“Consolidated
Net Worth” means the total of the amounts shown on the balance sheet of the
Company and its consolidated Subsidiaries, determined on a consolidated basis
in accordance with GAAP, as of the end of the most recent fiscal quarter of the
Company prior to the taking of any action for the purpose of which the
determination is being made for which financial statements are available, as (i) the
par or stated value of all outstanding Capital Stock of the Company plus (ii) paid-in
capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.

 

“Credit
Agreement” means the Credit Agreement dated June 23, 1997, to be entered
into by and among the Company, certain of its Subsidiaries, the lenders
referred to therein and Credit Suisse First Boston, as Administrative Agent,
together with the related documents thereto (including without limitation the
term loans and revolving loans thereunder, any guarantees and security
documents), as amended, extended, renewed, restated, supplemented or otherwise
modified (in whole or in part, and without limitation as to amount, terms,
conditions, covenants and other provisions) from time to time, and any
agreement (and related document) governing Indebtedness incurred to refund or
refinance, in whole or in part, the borrowings and commitments then outstanding
or permitted to be outstanding under such Credit Agreement or a successor
Credit Agreement, whether by the same or any other lender or group of lenders.

 

“Currency
Agreement” means in respect of a Person any foreign exchange contract, currency
swap agreement or other similar agreement designed to protect such Person
against fluctuations in currency values.

 

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

 

11

 

“Designated
Senior Indebtedness” means (i) the Bank Indebtedness and (ii) any
other Senior Indebtedness of the Company which, at the date of determination,
has an aggregate principal amount outstanding of, or under which, at the date
of determination, the holders thereof are committed to lend up to, at least $25
million and is specifically designated by the Company in the instrument
evidencing or governing such Senior Indebtedness as “Designated Senior
Indebtedness” for purposes of this Indenture.

 

“Discount
Debentures” means the 13% Senior Discount Debentures Due 2009 of Parent issued
on the Issue Date in an aggregate principal amount at maturity of $74,882,000
and any other Indebtedness of Parent that Refinances such Debentures; provided,
however, that such other Indebtedness does not require the payment of cash
interest or the repayment of principal (or the repurchase of such Indebtedness)
in an amount in excess of the amounts thereof provided for in such Debentures
being Refinanced or at a time prior to the time such amounts would have been
payable as provided for in such Debentures being Refinanced.

 

“Disqualified
Stock” means, with respect to any Person, any Capital Stock which by its terms
(or by the terms of any security into which it is convertible or for which it
is exchangeable) or upon the happening of any event (i) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii) is
convertible or exchangeable for Indebtedness or Disqualified Stock or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the first anniversary of the Stated Maturity of the
Securities.

 

“EBITDA”
for any period means the sum of Consolidated Net Income, plus Consolidated
Interest Expense plus the following to the extent deducted in calculating such
Consolidated Net Income: (a) all income tax expense of the Company and its
consolidated Restricted Subsidiaries, (b) depreciation expense of the
Company and its consolidated Restricted Subsidiaries, (c) amortization
expense of the Company and its consolidated Restricted Subsidiaries

 

12

 

(excluding amortization
expense attributable to a prepaid cash item that was paid in a prior period)
and (d) all other non-cash charges of the Company and its consolidated
Restricted Subsidiaries (excluding any such non-cash charge to the extent that
it represents an accrual of or reserve for cash expenditures in any future
period), in each case for such period. Notwithstanding the foregoing, the
provision for taxes based on the income or profits of, and the depreciation and
amortization and non-cash charges of, a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its stockholders.

 

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

 

“GAAP”
means generally accepted accounting principles in the United States of America
as in effect as of the Issue Date, including those set forth in (i) the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such
other statements by such other entity as approved by a significant segment of
the accounting profession and (iv) the rules and regulations of the
SEC governing the inclusion of financial statements (including pro forma
financial statements) in periodic reports required to be filed pursuant to Section 13
of the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the SEC.
An accounting term not otherwise defined in this Indenture will have the
meaning assigned to it in accordance with GAAP. All ratios

 

13

 

and computations based on
GAAP contained in this Indenture shall be computed in conformity with GAAP.

 

“Guarantee”
means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation of such Person (whether arising by virtue
of partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided, however, that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business. The
term “Guarantee” used as a verb has a corresponding meaning. The term
“Guarantor” shall mean any Person Guaranteeing any obligation.

“Guaranty
Agreement” means a supplemental indenture, in a form satisfactory to the
Trustee, pursuant to which a Subsidiary Guarantor guarantees the Company’s
obligations with respect to the Securities on the terms provided for in this Indenture.

 

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

 

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

 

“Incur”
means issue, assume, Guarantee, incur or otherwise become liable for; provided,
however, that any Indebtedness or Capital Stock of a Person existing at the
time such Person becomes a Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to

 

14

 

be Incurred by such
Subsidiary at the time it becomes a Subsidiary. The term “Incurrence” when used
as a noun shall have a correlative meaning. The accretion of principal of a
non-interest bearing or other discount security shall not be deemed the
Incurrence of Indebtedness.

 

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

 

(i) the principal of and premium (if any) in respect of (A) indebtedness
of such Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable;

 

(ii) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into by
such Person;

 

(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business);

 

(iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker’s acceptance or similar credit
transaction (other than obligations with respect to letters of credit securing
obligations (other than obligations described in clauses (i) through (iii) above)
entered into in the ordinary course of business of such Person to the extent
such letters of credit are not drawn upon or, if and to the extent drawn upon,
such drawing is reimbursed no later than the tenth Business Day following
payment on the letter of credit);

 

(v) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, the liquidation

 

15

 

preference
with respect to, any Preferred Stock (but excluding, in each case, any accrued
dividends);

 

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

 

(vii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the amount
of such obligation being deemed to be the lesser of the value of such property
or assets or the amount of the obligation so secured; and

 

(viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.

 

The amount of Indebtedness of
any Person at any date shall be the outstanding balance at such date of all
Indebtedness and the maximum liability, upon the occurrence of the contingency
giving rise to the obligation, of any contingent obligations at such date.

 

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

 

“Interest
Rate Agreement” means in respect of a Person any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement
designed to protect such Person against fluctuations in interest rates.

 

“Investment”
in any Person means any direct or indirect advance, loan (other than advances
to customers in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of the lender) or other extensions of credit
(including by way of Guarantee or similar arrangement) or capital contribution
to (by means of

 

16

 

any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by such Person. For purposes of the
definition of “Unrestricted Subsidiary”, the definition of “Restricted Payment”
and Section 4.04, (i) “Investment” shall include the portion
(proportionate to the Company’s equity interest in such Subsidiary) of the fair
market value of the net assets of any Subsidiary of the Company at the time
that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
“Investment” in an Unrestricted Subsidiary equal to an amount (if positive)
equal to (x) the Company’s “Investment” in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company’s equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors.

 

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

 

“Joint
Venture Affiliate” shall mean a Person that is partially owned, directly or
indirectly, by the Company and no interest in which is owned, directly or
indirectly (other than through such Person’s ownership of common stock of the
Company), by any Person that is an Affiliate of the Company.

 

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

 

“Net
Available Cash” from an Asset Disposition means cash payments received
therefrom (including any cash

 

17

 

payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of any securities
received as consideration, but only as and when received, but excluding any
other consideration received in the form of assumption by the acquiring Person
of Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form), in each case net of (i) all legal,
title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local income,
franchise, sales and other applicable taxes required to be accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Indebtedness which is secured by any assets subject to
such Asset Disposition, in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets, or which must by
its terms, or in order to obtain a necessary consent to such Asset Disposition,
or by applicable law, be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as a result
of their ownership interest in the Subsidiary or joint venture engaging in such
Asset Disposition and (iv) the deduction of appropriate amounts provided
by the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed in such Asset Disposition
and retained by the Company or any Restricted Subsidiary after such Asset
Disposition.

 

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

 

“Obligations”
means with respect to any Indebtedness all obligations for principal, premium,
interest, penalties, fees, reimbursements and other amounts

 

18

 

payable pursuant to the
documentation governing such Indebtedness.

 

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

 

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

 

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

 

“Parent”
means Roller Bearing Holding Company, Inc., a Delaware corporation, and
any successor corporation.

 

“Permitted
Holders” means each Person owning, on the Issue Date after giving effect to the
recapitalization of the Parent occurring on such date, shares of Common Stock
of the Parent or warrants to purchase such common stock and each Person
controlled by any Permitted Holder (and, in the case of individuals, the estate
and heirs of any Permitted Holder).

 

“Permitted
Investment” means an Investment by the Company or any Restricted Subsidiary in (i) the
Company, a Restricted Subsidiary or a Person that will, upon the making of such
Investment, become a Restricted Subsidiary; provided, however, that the primary
business of such Restricted Subsidiary is a Related Business; (ii) another
Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Restricted Subsidiary; provided, however, that such
Person’s primary business is a Related Business; (iii) Temporary Cash
Investments; (iv) receivables owing to the Company or any Restricted
Subsidiary if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such

 

19

 

concessionary trade terms as
the Company or any such Restricted Subsidiary deems reasonable under the
circumstances; (v) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business; (vi) loans or advances to employees made in the ordinary course
of business consistent with past practices of the Company or such Restricted
Subsidiary; (vii) stock, obligations or securities received in settlement
of debts created in the ordinary course of business and owing to the Company or
any Restricted Subsidiary or in satisfaction of judgments; and (viii) any
Person to the extent such Investment represents the non-cash portion of the
consideration received for an Asset Disposition as permitted pursuant to Section 4.06.

 

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

 

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

 

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

 

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

 

20

 

“Public
Market” means any time after (x) a Public Equity Offering has been consummated
and (y) at least 15% of the total issued and outstanding common stock of the
Parent has been distributed by means of an effective registration statement
under the Securities Act or sales pursuant to Rule 144 under the
Securities Act with gross proceeds to the Parent of not less than $25 million,
resulting in the listing of the Parent’s common stock on a nationally
recognized stock exchange or the inclusion of such stock on the Nasdaq Market’s
National Market.

 

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

 

“Refinancing
Indebtedness” means Indebtedness that Refinances any Indebtedness of the
Company or any Restricted Subsidiary existing on the Issue Date or Incurred in
compliance with this Indenture, including Indebtedness that Refinances Refinancing
Indebtedness; provided, however, that (i) such Refinancing Indebtedness
has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness
being Refinanced, (ii) such Refinancing Indebtedness has an Average Life
at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being Refinanced and (iii) such
Refinancing Indebtedness has an aggregate principal amount (or if Incurred with
original issue discount, an aggregate issue price) that is equal to or less
than the aggregate principal amount (or if Incurred with original issue
discount, the aggregate accreted value) then outstanding or committed (plus
fees and expenses, including any premium and defeasance costs) under the Indebtedness
being Refinanced; provided further, however, that Refinancing Indebtedness
shall not include (x) Indebtedness of a Subsidiary that Refinances Indebtedness
of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary
that Refinances Indebtedness of an Unrestricted Subsidiary.

 

21

 

“Related
Business” means any business related, ancillary or complementary to the
businesses of the Company and the Restricted Subsidiaries on the Issue Date.

 

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

 

“Restricted
Payment” with respect to any Person means (i) the declaration or payment
of any dividends or any other distributions of any sort in respect of its
Capital Stock (including any payment in connection with any merger or
consolidation involving such Person) or similar payment to the direct or
indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)), (ii) the purchase, redemption or other
acquisition or retirement for value of any Capital Stock of the Company held by
any Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than a Restricted Subsidiary), including the
exercise of any option to exchange any Capital Stock (other than into Capital
Stock of the Company that is not Disqualified Stock), (iii) the purchase,
repurchase, redemption, defeasance or other acquisition or retirement for
value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment of any Subordinated Obligations (other than the purchase,
repurchase, or other acquisition of Subordinated Obligations purchased in
anticipation of satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of acquisition) or
(iv) the making of any Investment in any Person; provided, however, that
“Restricted Payments” will not include any Permitted Investment.

 

22

 

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

 

“Revolving
Credit Facilities” means the revolving credit facility contained in the Credit
Agreement and any other facility or financing arrangement that Refinances or
replaces, in whole or in part, any such revolving credit facility.

 

“Sale/Leaseback
Transaction” means an arrangement relating to property now owned or hereafter
acquired whereby the Company or a Restricted Subsidiary transfers such property
to a Person and the Company or a Restricted Subsidiary leases it from such
Person.

 

“SEC”
means the Securities and Exchange Commission.

 

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

 

“Securities”
means the Securities issued under this Indenture.

 

“Senior
Indebtedness” of any Person means all (i) Bank Indebtedness of or
guaranteed by such Person, whether outstanding on the Issue Date or thereafter
Incurred (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) and (ii) Indebtedness of such
Person whether outstanding on the Issue Date or thereafter Incurred, including
interest thereon (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), in respect of (A) Indebtedness
for money borrowed, (B) Indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which such Person is
responsible or liable and (C) Hedging Obligations, unless, in the case of (i) and
(ii), in the instrument creating or evidencing the same or pursuant to which
the same is

 

23

 

outstanding, it is provided
that such obligations are subordinate in right of payment to the obligations
under the Securities; provided, however, that Senior Indebtedness shall not
include (1) any obligation of such Person to any subsidiary of such
Person, (2) any liability for Federal, state, local or other taxes owed or
owing by such Person, (3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including guarantees
thereof or instruments evidencing such liabilities), (4) any Indebtedness
of such Person (and any accrued and unpaid interest in respect thereof) which
is subordinate or junior by its terms to any other Indebtedness or other
obligation of such Person or (5) that portion of any Indebtedness which at
the time of Incurrence is Incurred in violation of this Indenture (but as to
any such Indebtedness under the Credit Agreement, no such violation shall be
deemed to exist if the Representative of the Lenders thereunder shall have
received an officers’ certificate of the Company to the effect that the
issuance of such Indebtedness does not violate such covenant and setting forth
in reasonable detail the reasons therefor). If any Bank Indebtedness is
disallowed, avoided or subordinated pursuant to the provisions of Section 548
of the U.S. Bankruptcy Code or any applicable state fraudulent conveyance law,
such Bank Indebtedness will still constitute Senior Indebtedness.

 

“Senior
Subordinated Indebtedness” means (i) with respect to the Company, the
Securities and any other Indebtedness of the Company that specifically provides
that such Indebtedness is to rank pari passu with the Securities in right of
payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligations of the Company which is not Senior
Indebtedness of the Company and (ii) with respect to a Subsidiary
Guarantor, its respective Subsidiary Guaranty of the Securities and any other
indebtedness of such Person that specifically provides that such Indebtedness
rank pari passu with such Guarantee in respect of payment and is not
subordinated by its terms in respect of payment to any Indebtedness or other
obligation of such Person which is not Senior Indebtedness of such Person.

 

24

 

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

 

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

 

“Subordinated
Obligation” means any Indebtedness of the Company or any Subsidiary Guarantor
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to, in the case of the Company, the
Securities or, in the case of such Subsidiary Guarantor, its Subsidiary
Guaranty, pursuant to a written agreement to that effect.

 

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

 

“Subsidiary
Guarantor” means any subsidiary of the Company that Guarantees the Company’s
obligations with respect to the Securities, which initially shall be Industrial
Tectonics Bearings Corporation, RBC Linear Precision Products, Inc. and
RBC Nice Bearings, Inc.

 

25

 

“Subsidiary
Guaranty” means a Guarantee by a Subsidiary Guarantor of the Company’s
obligations with respect to the Securities.

 

“Tax
Sharing Agreement” means any tax sharing agreement between the Company and the
Parent or any other Person with which the Company is required to, or is
permitted to, file a consolidated tax return or with which the Company is or
could be part of a consolidated group for tax purposes.

 

“Temporary
Cash Investments” means any of the following: (i) any investment in direct
obligations of the United States of America or any agency thereof or
obligations guaranteed by the United States of America or any agency thereof, (ii) investments
in time deposit accounts, certificates of deposit and money market deposits
maturing within 180 days of the date of acquisition thereof issued by a bank or
trust company which is organized under the laws of the United States of America,
any state thereof or any foreign country recognized by the United States of
America, and which bank or trust company has capital, surplus and undivided
profits aggregating in excess of $50,000,000 (or the foreign currency
equivalent thereof) and has outstanding debt that is rated “A” (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or
any money-market fund sponsored by a registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (i) above
entered into with a bank meeting the qualifications described in clause (ii) above,
(iv) investments in commercial paper, maturing not more than 90 days after
the date of acquisition, issued by a corporation (other than an Affiliate of
the Company) organized and in existence under the laws of the United States of
America or any foreign country recognized by the United States of America with
a rating at the time as of which any investment therein is made of “P-1”
(or higher) according to Moody’s Investors Service, Inc. or “A-1”
(or higher) according to Standard and Poor’s Ratings Group, and

 

26

 

(v)  investments in
securities with maturities of six months or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least “A” by Standard & Poor’s Ratings Group or
“A” by Moody’s Investors Service, Inc.

 

“Term
Loan Facilities” means the term loan facilities contained in the Credit
Agreement and any other facility or financing arrangement that Refinances in
whole or in part any such term loan facility.

 

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

 

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

 

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

 

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

 

“Unrestricted
Subsidiary” means (i) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided,
however, that either (A) the

 

27

 

Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary
has assets greater than $1,000, such designation would be permitted under Section 4.04.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation (x) the Company could Incur $1.00 of additional
Indebtedness under Section 4.03(a) and (y) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the resolution of the Board of Directors giving effect to such designation and
an Officers’ Certificate certifying that such designation complied with the
foregoing provisions.

 

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

 

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

 

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

 

28

 

SECTION 1.02. Other
Definitions.

 

	
  Term

  	
   

  	
  Defined
  in

  Section

  	
   

  
	
  “Affiliate Transaction” 

  	
   

  	
  4.07

  	
   

  
	
  “Bankruptcy Law” 

  	
   

  	
  6.01

  	
   

  
	
  “Blockage Notice” 

  	
   

  	
  10.03

  	
   

  
	
  “covenant defeasance
  option” 

  	
   

  	
  8.01

  	
  (b)

  
	
  “Custodian” 

  	
   

  	
  6.01

  	
   

  
	
  “Event of Default” 

  	
   

  	
  6.01

  	
   

  
	
  “legal defeasance option” 

  	
   

  	
  8.01

  	
  (b)

  
	
  “Legal Holiday” 

  	
   

  	
  13.08

  	
   

  
	
  “Offer” 

  	
   

  	
  4.06

  	
  (b)

  
	
  “Offer Amount” 

  	
   

  	
  4.06

  	
  (c)(2)

  
	
  “Offer Period” 

  	
   

  	
  4.06

  	
  (c)(2)

  
	
  “pay the Securities” 

  	
   

  	
  10.03

  	
   

  
	
  “Paying Agent” 

  	
   

  	
  2.03

  	
   

  
	
  “Payment Blockage Period” 

  	
   

  	
  10.03

  	
   

  
	
  “Purchase Date” 

  	
   

  	
  4.06

  	
  (c)(1)

  
	
  “Registrar” 

  	
   

  	
  2.03

  	
   

  
	
  “Successor Company” 

  	
   

  	
  5.01

  	
   

  

 

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

 

“Commission”
means the SEC;

 

“indenture
securities” means the Securities;

 

“indenture
security holder” means a Securityholder;

“indenture
to be qualified” means this Indenture;

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

 

29

 

“obligor”
on the indenture securities means the Company and any other obligor on the indenture
securities.

 

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

 

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

 

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

 

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

 

(3) “or” is not exclusive;

 

(4) “including” means including without limitation;

 

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

 

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

 

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

 

(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater; and

 

30

 

(9) all references to the date the Securities were originally
issued shall refer to the date the Initial Securities were originally issued.

 

ARTICLE 2

 

The Securities

 

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

 

SECTION 2.02. Execution and Authentication. Two Officers
shall sign the Securities for the Company by manual or facsimile signature. The
Company’s seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.

 

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

 

31

 

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

 

The
Trustee shall authenticate and deliver Securities for original issue, in an
aggregate principal amount of $110,000,000, upon a written order of the Company
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company. Such order shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed that amount except as provided in Section 2.07.

 

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

 

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

 

The
Company shall enter into an appropriate agency agreement with any Registrar,
Paying Agent or co-registrar not a party to this Indenture, which shall
incorporate the

 

32

 

terms of the TIA. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar,
co-registrar or transfer agent.

 

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

 

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

 

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

 

33

 

as the Trustee may reasonably
require of the names and addresses of Securityholders.

 

SECTION 2.06. Replacement Securities. If a mutilated
Security is surrendered to the Registrar or if the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security if the
requirements of Section 8-405 of the Uniform Commercial Code are met
and the Holder satisfies any other reasonable requirements of the Trustee. If
required by the Trustee or the Company, such Holder shall furnish an indemnity
bond sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company
and the Trustee may charge the Holder for their expenses in replacing a
Security.

 

Every
duly issued replacement Security shall be an additional obligation of the
Company.

 

SECTION 2.07. Outstanding Securities. Securities
outstanding at any time are all Securities authenticated by the Trustee except
for those canceled by it, those delivered to it for cancelation and those
described in this Section as not outstanding. A Security does not cease to
be outstanding because the Company or an Affiliate of the Company holds the
Security.

 

If
a Security is replaced pursuant to Section 2.06, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.

 

If
the Paying Agent segregates and holds in trust, in accordance with this Indenture,
on a redemption date or maturity date money sufficient to pay all principal and
interest payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, and the Paying Agent
is not prohibited from paying such money to the Securityholders on that date

 

34

 

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

 

SECTION 2.08. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee
shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange for temporary
Securities.

 

SECTION 2.09 Cancelation. The Company at any time may
deliver Securities to the Trustee for cancelation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancelation and deliver a certificate of such destruction
to the Company unless the Company directs the Trustee to deliver canceled
Securities to the Company. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancelation.

 

SECTION 2.10. Defaulted Interest. If the Company defaults
in a payment of interest on the Securities, the Company shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner. The Company may pay the defaulted interest to the persons who
are Securityholders on a subsequent special record date. The Company shall fix
or cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.

 

35

 

SECTION 2.11. CUSIP Numbers. The Company in issuing the
Securities may use “CUSIP” numbers (if then generally in use) and, if so, the
Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.

 

ARTICLE 3

 

Redemption

 

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

 

The
Company shall give each notice to the Trustee provided for in this Section at
least 60 days before the redemption date unless the Trustee consents to a
shorter period. Such notice shall be accompanied by an Officers’ Certificate
and an Opinion of Counsel from the Company to the effect that such redemption
will comply with the conditions herein.

 

SECTION 3.02. Selection of Securities To Be Redeemed. If
fewer than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not

 

36

 

previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Securities and portions
of them the Trustee selects shall be in amounts of $1,000 or a whole multiple
of $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.

 

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

 

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

 

(1) the redemption date;

 

(2) the redemption price;

 

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

 

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

 

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

 

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

 

37

 

(7) 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
Securities.

 

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

 

SECTION 3.04. Effect of Notice of Redemption. Once notice
of redemption is mailed, Securities called for redemption become due and
payable on the redemption date and at the redemption price stated in the
notice. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price stated in the notice, plus accrued interest to the
redemption date. Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.

 

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

 

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

 

38

 

ARTICLE 4

 

Covenants

 

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

 

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

 

SECTION 4.02. SEC Reports. The Company shall file with the
Trustee and provide Securityholders, within 15 days after it files them with
the SEC, copies of its annual report and the information, documents and other
reports which the Company is required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act. Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall continue to file with the SEC and provide the
Trustee and Securityholders with such annual reports and such information,
documents and other reports as are specified in Sections 13 and 15(d) of
the Exchange Act and applicable to a U.S. corporation subject to such Sections,
such information, documents and reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections. The Company also shall comply with the other provisions of TIA
ss. 314(a).

 

SECTION 4.03. Limitation on Indebtedness. (a) The
Company shall not, and shall not permit any

 

39

 

Restricted Subsidiary to,
Incur, directly or indirectly, any Indebtedness except that the Company may
Incur Indebtedness if, on the date of such Incurrence and after giving effect
thereto, the Consolidated Coverage Ratio of the Company exceeds 2.0 to 1.0 if
such Indebtedness is Incurred prior to June 15, 2000 or 2.25 to 1.0 if
such Indebtedness is Incurred thereafter.

 

(b) 
Notwithstanding the foregoing paragraph (a), the Company and the Restricted
Subsidiaries may Incur any or all of the following Indebtedness:

 

(1) Indebtedness of the Company or any Restricted Subsidiary
Incurred pursuant to the Revolving Credit Facilities; provided, however, that,
immediately after giving effect to any such Incurrence, the aggregate principal
amount of all Indebtedness incurred under this clause (1) and then
outstanding does not exceed the greater of (A) $54.0 million less the sum
of all principal payments actually made from time to time after the Issue Date
with respect to such Indebtedness pursuant to Section 4.06(a)(ii)(A) and
(B) the sum of 50% of the book value of the consolidated inventory of the
Company and its Restricted Subsidiaries and 85% of the book value of the
consolidated accounts receivables of the Company and its Restricted
Subsidiaries;

 

(2) Indebtedness of the Company or any Restricted Subsidiary
Incurred pursuant to the Term Loan Facilities; provided, however, that after
giving effect to any such Incurrence, the aggregate principal amount of all
Indebtedness Incurred under this clause (2) and then outstanding does not
exceed $16.0 million less the aggregate sum of all principal payments actually
made from time to time after the Issue Date with respect to such Indebtedness
(other than principal payments made from any permitted Refinancings thereof);

 

(3) Indebtedness of the Company or any Restricted Subsidiary owed
to and held by a Wholly Owned Subsidiary; provided, however, that any
subsequent issuance or transfer of any Capital Stock which results

 

40

 

in
any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Company or another
Wholly Owned Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof;

 

(4) the Securities;

 

(5) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2), (3) or (4) of this Section 4.03(b));

 

(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.03(a) or pursuant to clause (4) or (5) of
this Section 4.03(b) or this clause (6);

 

(7) (i) Hedging Obligations consisting of Interest Rate
Agreements directly related to Indebtedness permitted to be Incurred by the
Company pursuant to this Indenture, (ii) surety bonds Incurred in the
ordinary cause of business and (iii) self-insurance arrangements;

 

(8) Indebtedness consisting of the Subsidiary Guaranties and the
Guarantees of Indebtedness Incurred pursuant to paragraph (a) or pursuant
to clause (1), (2), (4), (5), (6) and (9) of this Section 4.03(b);
and

 

(9) Indebtedness in an aggregate principal amount which, together
with all other Indebtedness of the Company outstanding on the date of such
Incurrence (other than Indebtedness permitted by clauses (1) through (8) of
this Section 4.03(b) or Section 4.03(a)) does not exceed $10.0
million.

 

(c) Notwithstanding
the foregoing, the Company shall not Incur any Indebtedness pursuant to Section 4.03(b) if
the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations unless such 

 

41

 

Indebtedness shall be
subordinated to the Securities to at least the same extent as such Subordinated
Obligations.

 

(d) For
purposes of determining compliance with this Section 4.03, (i) in the
event that an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness described herein, the Company, in its sole discretion,
will classify such item of Indebtedness and only be required to include the
amount and type of such Indebtedness in one of the above clauses and (ii) an
item of Indebtedness may be divided and classified in more than one of the
types of Indebtedness described herein.

 

(e) Notwithstanding
Section 4.03(a) or 4.03(b), the Company shall not, and shall not
permit any Subsidiary Guarantor to, Incur (i) any Indebtedness if such
Indebtedness is subordinate or junior in ranking in any respect to any Senior
Indebtedness of the Company or such Subsidiary Guarantor, as applicable, unless
such Indebtedness is Senior Subordinated Indebtedness or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness or (ii) any
Secured Indebtedness that is not Senior Indebtedness of the Company or such
Subsidiary Guarantor unless contemporaneously therewith effective provision is
made to secure the Securities equally and ratably with such Secured
Indebtedness for so long as such Secured Indebtedness is secured by a Lien.

 

SECTION 4.04. Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:

 

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

 

(2) the Company is not able to Incur an additional $1.00 of
Indebtedness under Section 4.03(a); or

 

42

 

(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of:

 

(A)   50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from the beginning of the fiscal
quarter immediately following the fiscal quarter during which the Securities
are originally issued to the end of the most recent fiscal quarter for which
financial statements are available (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit);

 

(B)   the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Issue Date (other than an issuance or sale to a
Subsidiary of the Company and other than an issuance or sale to an employee
stock ownership plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees);

 

(C) the amount by which Indebtedness of the Company or its
Restricted Subsidiaries is reduced on the Company’s balance sheet upon the
conversion or exchange (other than by a Subsidiary of the Company) subsequent
to the Issue Date of any Indebtedness of the Company or any Restricted
Subsidiary for Capital Stock (other than Disqualified Stock) of the Company
(less the amount of any cash, or the fair value of any other property,
distributed by the Company upon such conversion or exchange); and

 

(D) an amount equal to the sum of (i) the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends, repayments
of loans or advances or other transfers of assets, in each case to the Company
or any Restricted Subsidiary from Unrestricted Subsidiaries, and

 

43

 

(ii) the
portion (proportionate to the Company’s equity interest in such Subsidiary) of
the fair market value of the net assets of an Unrestricted Subsidiary at the
time such Unrestricted Subsidiary is designated a Restricted Subsidiary;
provided, however, that the foregoing sum shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made (and treated
as a Restricted Payment) by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary.

 

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

 

(i) any Restricted Payment made out of the proceeds of the
substantially concurrent sale of, or any acquisition of any Capital Stock of
the Company made by exchange for, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
of the Company or an employee stock ownership plan or to a trust established by
the Company or any of its Subsidiaries for the benefit of their employees);
provided, however, that (A) such Restricted Payment shall be excluded in
the calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale shall be excluded from the calculation of amounts under
clause (3)(B) of Section 4.04(a);

 

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

 

44

 

(iii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied with Section 4.04(a);
provided, however, that at the time of payment of such dividend, no other
Default shall have occurred and be continuing (or result therefrom); provided
further, however, that such dividend shall be included in the calculation of
the amount of Restricted Payments;

 

(iv) dividends to the Parent to be used for the repurchase or other
acquisition of shares of, or options or warrants to purchase shares of, common
stock of the Parent from employees, former employees, directors or former
directors of the Parent or any of its Subsidiaries (or permitted transferees of
such employees, former employees, directors or former directors), pursuant to
the terms of the agreements (including employment agreements), plans (or
amendments thereto) or other arrangements approved by the board of directors of
the Parent under which such individuals purchase or sell or are granted the option
to purchase or sell, shares of such common stock; provided, however, that the
aggregate amount of such dividends shall not exceed $500,000 in any calendar
year; provided further, however, that such dividends shall be excluded in the
calculation of the amount of Restricted Payments;

 

(v) any payment by the Company to the Parent pursuant to the Tax
Sharing Agreement; provided, however, that the amount of any such payment shall
not exceed the amount of taxes that the Company would have been liable for on a
stand-alone basis; provided further, however, that such payment shall be
excluded in the calculation of the amount of Restricted Payments;

 

(vi) dividends to the Parent to the extent required to pay
non-deferrable scheduled cash interest when due on the Discount Debentures and
any additional cash interest (at a rate not to exceed 1/2 of 1% per annum)
payable with respect to the Discount Debentures as a

 

45

 

result
of Parent’s failure to comply with its obligations to register the Discount
Debentures; provided, however, that (A) no Default shall have occurred and
be continuing (or would result therefrom), (B) the Parent shall
immediately apply any such dividend to make such cash interest payment and (C) except
in the case of such additional interest, immediately after giving effect to any
such dividend, the Company would be able to Incur an additional $1.00 of
Indebtedness under Section 4.03(a); provided further, however, that such
dividends shall be included in the calculation of the amount of Restricted
Payments;

 

(vii) dividends to the Parent to the extent necessary to pay for
general corporate and overhead expenses incurred by the Parent; provided,
however, that such dividends shall not exceed $500,000 in any calendar year;
provided further, however, that such dividends shall be excluded in the
calculation of the amount of Restricted Payments;

 

(viii) a dividend to the Parent on the Issue Date of $57.7 million;
provided, however, that such dividend shall be excluded in the calculation of
the amount of Restricted Payments; and

 

(ix) a dividend or distribution by the Company to the Parent on December 15,
2002 to be used to fund the mandatory redemption on such date of Discount
Debentures pursuant to the terms thereof; provided, however, that (a) the
amount of such dividend or distribution may not exceed the lesser of (1) $34
million and (2) the amount which when added to other available funds of
the Parent on such date are sufficient to satisfy the Parent’s obligation to
make such mandatory redemption, (b) Parent applies such dividend to make
such redemption on December 15, 2002, (c) on the date of payment of
such dividend and after giving effect thereto, the Consolidated Debt Ratio does
not exceed 3.0 to 1.0 and (d) that at the time of payment of such
dividend, no other Default shall have

 

46

 

occurred
and be continuing (or result therefrom); provided further, however, that such
dividend shall be included in the calculation of the amount of Restricted
Payments.

 

SECTION 4.05. Limitation on Restrictions on Distributions
from Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of
any Restricted Subsidiary to (a) pay dividends or make any other
distributions on its Capital Stock to the Company or a Restricted Subsidiary or
pay any Indebtedness owed to the Company, (b) make any loans or advances
to the Company or (c) transfer any of its property or assets to the
Company, except:

 

(i) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date, including the Credit Agreement;

 

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

 

(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an agreement
referred to in clause (i) or (ii) of this Section 4.05 or this
clause (iii) or contained in any amendment to an agreement referred to in
clause (i) or (ii) of this Section 4.05 or this clause (iii);
provided, however, that the encumbrances and restrictions with respect to

 

47

 

such
Restricted Subsidiary contained in any such refinancing agreement or amendment
are no less favorable to the Securityholders than encumbrances and restrictions
with respect to such Restricted Subsidiary contained in such predecessor
agreements;

 

(iv) any such encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests solely to the
extent such provisions restrict the transfer of the lease or the property leased
thereunder;

 

(v) in the case of clause (c) above, restrictions contained in
security agreements, mortgages or leases securing Indebtedness of a Restricted
Subsidiary solely to the extent such restrictions restrict the transfer of the
property subject to such security agreements or mortgages;

 

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

 

(vii) any restriction imposed by applicable law.

 

SECTION 4.06. Limitation on Sales of Assets and Subsidiary
Stock. (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Disposition unless (i) the
Company or such Restricted Subsidiary receives consideration at the time of
such Asset Disposition at least equal to the fair market value (including as to
the value of all non-cash consideration), as determined in good faith by the
Board of Directors, of the shares and assets subject to such Asset Disposition
and at least 75% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or cash equivalents and (ii) an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company (or such Restricted

 

48

 

Subsidiary, as the case may
be) at the Company’s option to either (A) prepay, repay, redeem or
purchase Senior Indebtedness or Indebtedness (other than any Disqualified
Stock) of a Wholly Owned Subsidiary (in each case other than Indebtedness owed
to the Company or an Affiliate of the Company) or (B) acquire Additional
Assets, in each case, within one year from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash; provided, however, that
in connection with any prepayment, repayment or purchase of such Indebtedness,
the Company or such Restricted Subsidiary shall permanently retire such
Indebtedness and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased. To the extent of the balance of such Net Available Cash
after application in accordance with clauses (A) and (B), the Company
shall make an offer to the holders of the Securities (and to holders of other
Senior Subordinated Indebtedness designated by the Company) to purchase
Securities (and such other Senior Subordinated Indebtedness) pursuant to and
subject to the conditions contained in this Indenture. Notwithstanding the
foregoing provisions of this paragraph, the Company and the Restricted
Subsidiaries shall not be required to apply any Net Available Cash in
accordance with this paragraph except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied in accordance
with this paragraph exceeds $10 million. Pending application of Net Available
Cash pursuant to this covenant, such Net Available Cash shall be invested in
Permitted Investments.

 

For
the purposes of this Section 4.06, the following are deemed to be cash or
cash equivalents: (x) the assumption of Indebtedness of the Company or any
Restricted Subsidiary (other than Indebtedness Incurred in connection with or
in anticipation of such Asset Disposition) and the release of the Company or
such Restricted Subsidiary from all liability on such Indebtedness in
connection with such Asset Disposition, (y) securities received by the Company
or any Restricted Subsidiary from the transferee that are promptly converted

 

49

 

by the Company or such
Restricted Subsidiary into cash and (z) Temporary Cash Investments.

 

(b) In
the event of an Asset Disposition that requires the purchase of Securities (and
other Senior Subordinated Indebtedness) pursuant to Section 4.06(a), the
Company shall be required to purchase Securities tendered pursuant to an offer by
the Company for the Securities (and other Senior Subordinated Indebtedness)
(the “Offer”) at a purchase price of 100% of their principal amount (without
premium) plus accrued but unpaid interest (or, in respect of such other Senior
Subordinated Indebtedness, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Indebtedness) in accordance with the
procedures (including prorationing in the event of over- subscription) set
forth in Section 4.06(c). The Company shall not be required to make an
Offer to purchase Securities (and other Senior Subordinated Indebtedness)
pursuant to this Section 4.06 if the Net Available Cash available therefor
is less than $10 million (which lesser amount shall be carried forward for
purposes of determining whether such an Offer is required with respect to the
Net Available Cash from any subsequent Asset Disposition).

 

(c) (1) Promptly,
and in any event within 10 days after the Company becomes obligated to make an
Offer, the Company shall be obligated to deliver to the Trustee and send, by
first-class mail to each Holder, a written notice stating that the Holder may
elect to have his Securities purchased by the Company either in whole or in
part (subject to prorating as hereinafter described in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the “Purchase
Date”) and shall contain such information concerning the business of the
Company which the Company in good faith believes will enable such Holders to
make an informed decision (which at a minimum will include (i) the most
recently filed Annual Report on Form 10-K (including audited
consolidated financial statements) of the Company, the most recent subsequently
filed Quarterly Report on Form

 

50

 

10-Q and any Current
Report on Form 8-K of the Company filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Dispositions otherwise
described in the offering materials (or corresponding successor reports), (ii) a
description of material developments in the Company’s business subsequent to
the date of the latest of such Reports, and (iii) if material, appropriate
pro forma financial information) and all instructions and materials necessary
to tender Securities pursuant to the Offer, together with the information
contained in clause (3).

 

(2) Not
later than the date upon which written notice of an Offer is delivered to the
Trustee as provided below, the Company shall deliver to the Trustee an Officers’
Certificate as to (i) the amount of the Offer (the “Offer Amount”), (ii) the
allocation of the Net Available Cash from the Asset Dispositions pursuant to
which such Offer is being made and (iii) the compliance of such allocation
with the provisions of Section 4.06(a). On such date, the Company shall
also irrevocably deposit with the Trustee or with a paying agent (or, if the
Company is acting as its own paying agent, segregate and hold in trust) in
Temporary Cash Investments, maturing on the last day prior to the Purchase Date
or on the Purchase Date if funds are immediately available by open of business,
an amount equal to the Offer Amount to be held for payment in accordance with
the provisions of this Section. Upon the expiration of the period for which the
Offer remains open (the “Offer Period”), the Company shall deliver to the
Trustee for cancelation the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company. The Trustee shall,
on the Purchase Date, mail or deliver payment to each tendering Holder in the
amount of the purchase price. In the event that the aggregate purchase price of
the Securities delivered by the Company to the Trustee is less than the Offer
Amount applicable to the Securities, the Trustee shall deliver the excess to
the Company immediately after the expiration of the Offer Period for
application in accordance with this Section.

 

(3) Holders
electing to have a Security purchased shall be required to surrender the
Security, with an appropriate

 

51

 

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

 

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

 

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

 

52

 

have breached its obligations
under this Section by virtue thereof.

 

SECTION 4.07. Limitation on Affiliate Transactions. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, enter
into or permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property, employee compensation
arrangements or the rendering of any service) or enter into any agreement,
loan, advance or Guarantee with any Affiliate (other than a Joint Venture
Affiliate) of the Company (an “Affiliate Transaction”) unless the terms thereof
(i) are no less favorable to the Company or such Restricted Subsidiary
than those that could be obtained at the time of such transaction in arm’s-length
dealings with a Person who is not such an Affiliate, (ii) if such
Affiliate Transaction (or series of related Affiliate Transactions) involves an
amount in excess of $2 million, (1) are set forth in writing and (2) have
been approved by a majority of the members of the Board of Directors having no
personal stake in such Affiliate Transaction (or series of related Affiliate
Transactions) and (iii) if such Affiliate Transaction involves an amount
in excess of $10 million, have been determined by a nationally recognized
investment banking firm to be fair, from a financial standpoint, to the Company
and its Restricted Subsidiaries.

 

(b) The
provisions of Section 4.07(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.04, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, (iii) the
grant of stock options or similar rights to employees and directors of the
Company pursuant to plans approved by the Board of Directors, (iv) loans
or advances to employees in the ordinary course of business in accordance with
the past practices of the Company or its Restricted Subsidiaries, but in any
event not to exceed $700,000 in the aggregate outstanding at any one time, (v) the
payment of reasonable fees to directors of the Company and its Restricted

 

53

 

Subsidiaries who are not
employees of the Company or its Restricted Subsidiaries, (vi) any Affiliate
Transaction between the Company and a Wholly Owned Subsidiary or between Wholly
Owned Subsidiaries and (vii) any Tax Sharing Agreement; provided, however,
that the aggregate amount payable by the Company pursuant thereto shall not
exceed the amount of taxes that the Company would have been liable for on a
stand-alone basis.

 

SECTION 4.08. Limitation on the Sale or Issuance of Capital
Stock of Restricted Subsidiaries. The Company shall not sell or otherwise
dispose of any Capital Stock of a Restricted Subsidiary, and shall not permit
any Restricted Subsidiary, directly or indirectly, to issue or sell or
otherwise dispose of any of its Capital Stock except (i) to the Company or
a Wholly Owned Subsidiary, (ii) if, immediately after giving effect to
such issuance, sale or other disposition, neither the Company nor any of its
Subsidiaries own any Capital Stock of such Restricted Subsidiary or (iii) if,
immediately after giving effect to such issuance, sale or other disposition,
such Restricted Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect thereto would
have been permitted to be made under the covenant described in Section 4.04
if made on the date of such issuance, sale or other disposition.

 

SECTION 4.09. Change of Control. (a) Upon the
occurrence of a Change of Control, each Holder shall have the right to require
that the Company repurchase such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest on the relevant interest
payment date), in accordance with the terms contemplated in Section 4.09(b).
In the event that at the time of such Change of Control the terms of the Senior
Indebtedness of the Company restrict or prohibit the repurchase of Securities
pursuant to this Section, then prior to the mailing of the notice to Holders
provided for in Section 4.09(b) below but in any event within 30 days
following any Change of Control, the Company

 

54

 

shall (i) repay in full
all such Senior Indebtedness or offer to repay in full all such Senior Indebtedness
and repay such Senior Indebtedness of each lender who has accepted such offer
or (ii) obtain the requisite consent under the agreements governing such
Senior Indebtedness to permit the repurchase of the Securities as provided for
in Section 4.09(b).

 

(b) Within
30 days following any Change of Control, the Company shall mail a notice to
each Holder with a copy to the Trustee stating:

 

(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder’s Securities at a
purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of Holders of record on the relevant record date to receive interest on
the relevant interest payment date);

 

(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization, each after giving effect to such Change of Control);

 

(3) the repurchase date (which, except as otherwise required by
law, shall be no earlier than 30 days nor later than 60 days from the date such
notice is mailed); and

 

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

 

(c) Holders
electing to have a Security purchased will be required to surrender the
Security, with an appropriate form duly completed, to the Company at the
address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not

 

55

 

later than one Business Day
prior to the purchase date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security
which was delivered for purchase by the Holder and a statement that such Holder
is withdrawing his election to have such Security purchased.

 

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

 

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

 

SECTION 4.10. Future Guarantors. In the event that, after
the Issue Date, any Restricted Subsidiary Incurs any Indebtedness pursuant to
clause (1), (2) or (8) of Section 4.03(b), the Company shall
cause such Restricted Subsidiary to Guarantee the Securities pursuant to a
Subsidiary Guaranty on the terms and conditions set forth in the Indenture and
shall cause all Indebtedness of such Restricted Subsidiary owing to the Company
or any other Subsidiary of the Company and not previously discharged to be
converted into Capital Stock of such Restricted Subsidiary (other than
Disqualified Stock).

 

SECTION 4.11. Existence. Subject to Article 5, the
Company will do or cause to be done all things necessary to preserve and keep
in full force and effect its existence, rights (charter and statutory) and
franchises; provided, however, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall

 

56

 

determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.

 

SECTION 4.12. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers’ Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any
Default that occurred during such period. If they do, the certificate shall
describe the Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with TIA
ss. 314(a)(4).

 

SECTION 4.13. Further Instruments and Acts. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

 

ARTICLE 5

 

Successor Company

 

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

 

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

 

57

 

satisfactory
to the Trustee, all the obligations of the Company under the Securities and
this Indenture;

 

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

 

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

 

(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount that is not
less than the Consolidated Net Worth of the Company immediately prior to such
transaction; and

 

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

 

provided, however, that clauses (iii) and (iv) shall not
apply to a merger or consolidation involving only the Company and one or more
Wholly Owned Subsidiaries.

 

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

 

(b) The
Company shall not permit any Subsidiary Guarantor to consolidate with or merge
with or into, or

 

58

 

convey, transfer or lease, in
one transaction or series of transactions, all or substantially all of its
assets to any Person unless: (i) the resulting, surviving or transferee
Person (if not such Subsidiary) shall be a Person organized and existing under
the laws of the jurisdiction under which such Subsidiary was organized or under
the laws of the United States of America, or any State hereof or the District
of Columbia, and such Person shall expressly assume, by executing a Guaranty
Agreement, all the obligations of such Subsidiary, if any, under its Subsidiary
Guaranty; (ii) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which becomes
an obligation of the resulting, surviving or transferee Person as a result of
such transaction as having been issued by such Person at the time of such
transaction), no Default shall have occurred and be continuing; and (iii) the
Company delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
amendment to this Indenture, if any, complies with this Indenture. The
provisions of clauses (i) and (ii) above shall not apply to any one
or more transactions which constitute an Asset Disposition if the Company has
complied with the applicable provisions of Section 4.06.

 

ARTICLE 6

 

Defaults and Remedies

 

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

 

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

 

(2) the Company (i) defaults in the payment of the principal
of any Security when the same becomes due and

 

59

 

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

 

(3) the Company fails to comply with Section 5.01;

 

(4) the Company fails to comply with Section 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09 or 4.10 (other than a failure to purchase
Securities when required under Section 4.06 or 4.09) and such failure
continues for 30 days after the notice specified below;

 

(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in clause (1), (2), (3) or
(4) above) and such failure continues for 60 days after the notice
specified below;

 

(6) Indebtedness of the Company or any Significant Subsidiary is
not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total amount of
such Indebtedness unpaid or accelerated exceeds $5.0 million, or its foreign
currency equivalent at the time;

 

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

 

(A) commences a voluntary case;

 

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

 

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

 

60

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(9) any judgment or decree for the payment of money in excess of
$5.0 million or its foreign currency equivalent at the time is entered against
the Company or any Significant Subsidiary, remains outstanding for a period of
60 days following the entry of such judgment or decree and is not discharged,
waived or the execution thereof stayed within 10 days after the notice
specified below; or

 

(10) a Subsidiary Guaranty ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guaranty) or a Subsidiary
Guarantor denies or disaffirms its obligations under its Subsidiary Guaranty.

 

The
foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or

 

61

 

order of any court or any
order, rule or regulation of any administrative or governmental body.

 

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

 

A
Default under clauses (4), (5), or (9) is not an Event of Default until
the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a “Notice of Default”.

 

The
Company shall deliver to the Trustee, within 30 days after the occurrence
thereof, written notice in the form of an Officers’ Certificate of any Event of
Default under clause (6) or (10) and any event which with the giving
of notice or the lapse of time would become an Event of Default under clause
(4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.

 

SECTION 6.02. Acceleration. If an Event of Default (other
than an Event of Default specified in Section 6.01(7) or (8) with
respect to the Company) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the outstanding
Securities by notice to the Company and the Trustee, may declare the principal
of and accrued but unpaid interest on all the Securities to be due and payable.
Upon such a declaration, such principal and interest shall be due and payable
immediately; provided, however, that if upon such declaration there are any
amounts outstanding under the Credit Agreement and the amounts thereunder have
not been accelerated, such principal and interest shall be due and payable upon
the earlier of the time such amounts are accelerated or five Business Days
after receipt by the

 

62

 

Company and the
Representative under the Credit Agreement of such declaration. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the
Company occurs, the principal of and interest on all the Securities shall ipso
facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholders. The Holders of a
majority in principal amount of the outstanding Securities by notice to the
Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of acceleration. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.

 

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

 

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

 

SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in principal amount of the outstanding Securities by notice to the
Trustee may waive an existing Default and its consequences except (i) a
Default in the payment of the principal of or interest on a Security or (ii) a
Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent
or other Default or impair any consequent right.

 

63

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

64

 

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

 

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

 

SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount then due and owing
(together with interest on any unpaid interest to the extent lawful) and the
amounts provided for in Section 7.07.

 

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

 

65

 

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

 

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

 

SECOND: to holders of Senior Indebtedness of the Company to the extent
required by Article 10;

 

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

 

FOURTH: to the Company.

 

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

 

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

 

SECTION 6.12. Waiver of Stay or Extension Laws. The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever

 

66

 

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

 

ARTICLE 7

 

Trustee

 

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

 

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

 

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

 

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

 

67

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

68

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 7.04. Trustee’s Disclaimer. The Trustee shall not
be responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Securities,

 

69

 

it shall not be accountable
for the Company’s use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee’s certificate of authentication.

 

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

 

SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each February 1 beginning with the February 1
following the date of this Indenture, and in any event prior to March 1 in
each year, the Trustee shall mail to each Securityholder a brief report dated
as of February 1 that complies with TIA ss. 313(a). The Trustee also shall
comply with TIA ss. 313(b).

 

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

 

SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee from time to time reasonable compensation for its services.
The Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable

 

70

 

compensation and expenses,
disbursements and advances of the Trustee’s agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys’ fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not reimburse any expense or indemnify against any loss, liability or
expense incurred by the Trustee through the Trustee’s own wilful misconduct,
negligence or bad faith.

 

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

 

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

 

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

 

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

 

(2) the
Trustee is adjudged bankrupt or insolvent;

 

71

 

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

 

(4) the
Trustee otherwise becomes incapable of acting; or

 

(5) the
Trustee increases its fees by more than 15% in any twelve month period.

 

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

 

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

 

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

 

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

 

Notwithstanding
the replacement of the Trustee pursuant to this Section, the Company’s
obligations under

 

72

 

Section 7.07 shall continue
for the benefit of the retiring Trustee.

 

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

 

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

 

SECTION 7.10.
Eligibility; Disqualification. The Trustee shall at all times satisfy the
requirements of TIA ss. 310(a). The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA ss. 310(b);
provided, however, that there shall be excluded from the operation of TIA ss.
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in TIA
ss.310(b)(1) are met.

 

SECTION 7.11.
Preferential Collection of Claims Against Company. The Trustee shall comply
with TIA ss. 311(a), excluding any creditor relationship listed in TIA

 

73

 

ss. 311(b). A Trustee who has
resigned or been removed shall be subject to TIA ss. 311(a) to the extent
indicated.

 

ARTICLE 8

 

Discharge of Indenture;
Defeasance

 

SECTION 8.01.
Discharge of Liability on Securities; Defeasance. (a) When (i) the Company delivers
to the Trustee all outstanding Securities (other than Securities replaced
pursuant to Section 2.07) for cancelation or (ii) all outstanding Securities
have become due and payable, whether at maturity or as a result of the mailing
of a notice of redemption pursuant to Article 3 hereof and the Company
irrevocably deposits with the Trustee funds sufficient to pay at maturity or
upon redemption all outstanding Securities, including interest thereon to
maturity or such redemption date (other than Securities replaced pursuant to
Section 2.07), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Sections
8.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers’ Certificate and an Opinion of Counsel and at the
cost and expense of the Company.

 

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

 

If the Company exercises its
legal defeasance option, payment of the Securities may not be accelerated

 

74

 

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

 

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

 

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

 

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

 

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

 

(2)
the Company delivers to the Trustee a certificate from a nationally recognized
firm of independent accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on the deposited U.S.
Government Obligations plus any deposited money without investment will provide
cash at such times and in such amounts as will be sufficient to pay principal
and interest when due  on

 

75

 

all the Securities to
maturity or redemption, as the case may be;

 

(3)
123 days pass after the deposit is made and during the 123-dayperiod no Default
specified in Sections 6.01(7) or (8) with respect to the Company occurs which
is continuing at the end of the period;

 

(4)
the deposit does not constitute a default under any other agreement binding on
the Company and is not prohibited by Article 10;

 

(5)
the Company delivers to the Trustee an Opinion of Counsel to the effect that
the trust resulting from the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment  Company Act of 1940;

 

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

 

(7)
in the case of the covenant defeasance option, the Company shall have delivered
to the Trustee an Opinion of Counsel to the effect that the Securityholders
will not recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred; and

 

76

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 8.06.
Reinstatement. If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with this Article 8 by reason of

 

77

 

any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company’s
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 8 until
such time as the Trustee or Paying Agent is permitted to apply all such money
or U.S. Government Obligations in accordance with this Article 8; provided,
however, that, if the Company has made any payment of interest on or principal
of any Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money or U.S. Government Obligations held by the Trustee
or Paying Agent.

 

ARTICLE 9

 

Amendments

 

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

 

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

 

(2)
to comply with Article 5;

 

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

 

(4)
to make any change in Article 10 that would limit or terminate the benefits
available to any holder of Senior Indebtedness (or Representatives therefor)
under Article 10;

 

78

 

(5)
to add Guarantees with respect to the Securities, including any Subsidiary
Guaranties, or to secure the Securities;

 

(6)
to add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power herein conferred upon the

Company;

 

(7)
to comply with any requirements of the SEC in connection with qualifying, or
maintaining the qualification of, this Indenture under the TIA; or

 

(8)
to make any change that does not adversely affect the rights of any
Securityholder.

 

An amendment under this
Section may not make any change that adversely affects the rights under Article
10 or the definitions relating thereto of any holder of Senior Indebtedness
then outstanding unless the holders of such Senior Indebtedness (or any group
or representative thereof authorized to give a consent) consent to such change.

 

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

 

SECTION 9.02.
With Consent of Holders. The Company and the Trustee may amend this Indenture
or the Securities without notice to any Securityholder but with the written
consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including consents obtained in connection with a
tender offer or exchange for the Securities). However, without the consent of
each Securityholder affected thereby, an amendment may not:

 

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

 

79

 

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

 

(3)
reduce the principal of or extend the Stated Maturity of any Security;

 

(4)
reduce the amount payable upon the redemption of any Security or change the
time at which any Security may be redeemed in accordance with Article 3;

 

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

 

(6)
make any change in Article 10 that adversely affects the rights of any
Securityholder under Article 10; or

 

(7)
make any change in Section 6.04 or 6.07 or the second sentence of this Section.

 

In addition, without the
consent of holders of at least 75% of the outstanding Securities, no amendment
may release a Subsidiary Guarantor from its Subsidiary Guaranty or make any
change in any Subsidiary Guaranty that would adversely affect the
Securityholders.

 

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

 

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

 

After an amendment under this
Section becomes effective, the Company shall mail to Securityholders a notice
briefly describing such amendment. The failure to give such notice to all
Securityholders, or any defect 

 

80

 

therein, shall not impair or
affect the validity of an amendment under this Section.

 

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

 

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

 

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

 

SECTION 9.05.
Notation on or Exchange of Securities. If an amendment changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
regarding the changed terms and return it to the Holder. Alternatively, if the Company
or

 

81

 

the Trustee so determines,
the Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.

 

SECTION 9.06.
Trustee To Sign Amendments. The Trustee shall sign any amendment authorized
pursuant to this Article 9 if the amendment does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may
but need not sign it. In signing such amendment the Trustee shall be entitled
to receive indemnity reasonably satisfactory to it and to receive, and (subject
to Section 7.01) shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture.

 

ARTICLE 10

 

Subordination

 

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

 

SECTION 10.02.
Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of the
assets of the Company to creditors upon a total or partial liquidation

 

82

 

or a total or partial
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property:

 

(1)
holders of Senior Indebtedness of the Company shall be entitled to receive
payment in full of such Senior Indebtedness before Securityholders shall be
entitled to receive any payment of principal of or interest on the Securities;
and

 

(2)
until such Senior Indebtedness is paid in full, any payment or distribution to
which Securityholders would be entitled but for this Article 10 shall be made
to holders of such Senior Indebtedness, except  that Securityholders may receive shares of
stock and any debt securities that are subordinated to such Senior Indebtedness
to at least the same extent as
the Securities.

 

SECTION 10.03.
Default on Senior Indebtedness. The Company may not pay the principal of or
interest on the Securities or make any deposit pursuant to Section 8.01 and may
not repurchase, redeem or otherwise retire any Securities (collectively, “pay
the Securities”) if (i) any Senior Indebtedness is not paid when due or (ii)
any other default on Senior Indebtedness occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms unless, in either
case, (x) the default has been cured or waived and any such acceleration has
been rescinded or (y) such Senior Indebtedness has been paid in full; provided,
however, that the Company may pay the Securities without regard to the
foregoing if the Company and the Trustee receive written notice approving such
payment from the Representative of such Senior Indebtedness. During the
continuance of any default (other than a default described in clause (i) or
(ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
the Company shall not pay the Securities for a period (a “Payment Blockage
Period”) 

 

83

 

commencing upon the receipt
by the Company and the Trustee of written notice (a “Blockage Notice”) of such
default from the Representative of such Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated (i) by
written notice to the Trustee and the Company from the Person or Persons who
gave such Blockage Notice, (ii) because the default giving rise to such Blockage
Notice is no longer continuing or (iii) because such Designated Senior
Indebtedness has been repaid in full). Notwithstanding the provisions described
in the immediately preceding sentence (but subject to the provisions contained
in the first sentence of this Section), unless the holders of such Designated
Senior Indebtedness or the Representative of such holders shall have
accelerated the maturity of such Designated Senior Indebtedness, the Company
may resume payments on the Securities after termination of such Payment
Blockage Period. Not more than one Blockage Notice may be given in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness during such period; provided, however, that
if any Blockage Notice within such 360-day period is given by or on behalf of
any holders of Designated Senior Indebtedness (other than the Bank
Indebtedness), the Representative of the Bank Indebtedness may give one other
Blockage Notice within such period; provided further, however, that in no event
may the total number of days during which any Payment Blockage Period or
Periods is in effect exceed 179 days in the aggregate during any
360-consecutive-day period. For purposes of this Section, no default or event
of default which existed or was continuing on the date of the commencement of
any Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured
or waived for a period of not less than 90 consecutive days.

 

84

 

SECTION 10.04.
Acceleration of Payment of Securities. If payment of the Securities is
accelerated because of an Event of Default, the Company or the Trustee shall
promptly notify the holders of the Senior Indebtedness (or their
Representatives) of the acceleration.

 

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

 

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

 

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

 

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

 

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

 

85

 

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

 

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

 

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

 

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

 

SECTION 10.11.
Article 10 Not To Prevent Events of Default or Limit Right To Accelerate. The
failure to

 

86

 

make a payment pursuant to
the Securities by reason of any provision in this Article 10 shall not be
construed as preventing the occurrence of a Default. Nothing in this Article 10
shall have any effect on the right of the Securityholders or the Trustee to
accelerate the maturity of the Securities.

 

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

 

SECTION 10.13.
Trustee Entitled To Rely. Upon any payment or distribution pursuant to this
Article 10, the Trustee and the Securityholders shall be entitled to rely (i)
upon any order or decree of a court of competent jurisdiction in which any
proceedings of the nature referred to in Section 10.02 are pending, (ii) upon a
certificate of the liquidating trustee or agent or other Person making such
payment or distribution to the Trustee or to the Securityholders or (iii) upon
the Representatives for the holders of Senior Indebtedness of the Company for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of such Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 10. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of the Company to participate in any payment or
distribution pursuant to this Article 10, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of such Senior Indebtedness held by such Person, the extent to

 

87

 

which such Person is entitled
to participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 10, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 10.

 

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

 

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

 

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

 

88

 

ARTICLE 11

 

Subsidiary Guaranties

 

SECTION 11.01.
Guaranties. Each Subsidiary Guarantor hereby unconditionally and irrevocably
guarantees, jointly and severally, to each Holder and to the Trustee and its
successors and assigns (a) the full and punctual payment of principal of and
interest on the Securities when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company
under this Indenture and the Securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the
Company under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the “Obligations”). Each Subsidiary Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice or further assent from such Subsidiary Guarantor and that
such Subsidiary Guarantor will remain bound under this Article 11
notwithstanding any extension or renewal of any Obligation.

 

Each Subsidiary Guarantor
waives presentation to, demand of, payment from and protest to the Company of
any of the Obligations and also waives notice of protest for nonpayment. Each
Subsidiary Guarantor waives notice of any default under the Securities or the
Obligations. The obligations of each Subsidiary Guarantor hereunder shall not
be affected by (a) the failure of any Holder or the Trustee to assert any claim
or demand or to enforce any right or remedy against the Company or any other
Person under this Indenture, the Securities or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Securities or any other agreement; (d) the release of any security
held by any Holder or the Trustee for the Obligations or any of them; (e) the
failure of any Holder or the Trustee to exercise any right or remedy against
any other guarantor of the Obligations; or (f) any change in the ownership of
such Subsidiary Guarantor (except as provided in Section 11.06).

 

89

 

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

 

Each Subsidiary Guaranty is,
to the extent and in the manner set forth in Article 12, subordinated and
subject in right of payment to the prior payment in full of the principal of
and premium, if any, and interest on all Senior Indebtedness of the Subsidiary
Guarantor giving such Subsidiary Guaranty and each Subsidiary Guaranty is made
subject to such provisions of this Indenture.

 

Except as expressly set forth
in Sections 8.01(b), 11.02 and 11.06, the obligations of each Subsidiary
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Subsidiary Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities
or any other agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
such Subsidiary Guarantor or would otherwise operate as a discharge of such
Subsidiary Guarantor as a matter of law or equity.

 

Each Subsidiary Guarantor
further agrees that its Subsidiary Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on

 

90

 

any Obligation is rescinded
or must otherwise be restored by any Holder or the Trustee upon the bankruptcy
or reorganization of the Company or otherwise.

 

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

 

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

 

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

 

 

91

 

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

 

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

 

SECTION 11.04.
No Waiver. Neither a failure nor a delay on the part of either the Trustee or
the Holders in exercising any right, power or privilege under this Article 11
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege. The rights, remedies and benefits of the Trustee and the Holders
herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at
law, in equity, by statute or otherwise.

 

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

 

92

 

notice or demand in the same,
similar or other circumstances.

 

SECTION 11.06.
Release of Subsidiary Guarantor. Upon the sale (including any sale pursuant to
any exercise of remedies by a holder of Senior Indebtedness) or other
disposition (including by way of consolidation or merger) of a Subsidiary
Guarantor or the sale or disposition of all or substantially all the assets of
such Subsidiary Guarantor (in each case other than to the Company or an
Affiliate of the Company), such Subsidiary Guarantor shall be deemed released
from all obligations under this Article 11 without any further action required
on the part of the Trustee or any Holder. At the request of the Company, the
Trustee shall execute and deliver an appropriate instrument evidencing such
release.

 

ARTICLE 12

 

Subordination
of Subsidiary Guaranties

 

SECTION 12.01.
Agreement To Subordinate. Each Subsidiary Guarantor agrees, and each
Securityholder by accepting a Security agrees, that the Obligations of such
Subsidiary Guarantor are subordinated in right of payment, to the extent and in
the manner provided in this Article 12, to the prior payment of all Senior
Indebtedness of such Subsidiary Guarantor and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness. The
Obligations of a Subsidiary Guarantor shall in all respects rank pari passu
with all other Senior Subordinated Indebtedness of such Subsidiary Guarantor
and only Senior Indebtedness of such Subsidiary Guarantor (including such
Subsidiary Guarantor’s Guarantee of Senior Indebtedness of the Company) shall
rank senior to the Obligations of such Subsidiary Guarantor in accordance with
the provisions set forth herein.

 

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

 

93

 

partial liquidation or a
total or partial dissolution of such Subsidiary Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to such
Subsidiary Guarantor or its property:

 

(1)
holders of Senior Indebtedness of such Subsidiary Guarantor shall be entitled
to receive payment in full of such Senior Indebtedness in cash or cash
equivalents before Securityholders shall be entitled to receive any payment
pursuant to any Obligations of such Subsidiary Guarantor; and

 

(2)
until the Senior Indebtedness of any Subsidiary Guarantor is paid in full in
cash or cash equivalents, any payment or distribution to which Securityholders
would be entitled but for this Article 12 shall be made to holders of such
Senior Indebtedness as their interests may appear, except that Securityholders
may receive shares of stock and any debt securities of such Subsidiary
Guarantor that are subordinated to Senior Indebtedness, and to any debt
securities received by holders of Senior Indebtedness, of such Subsidiary
Guarantor to at least the same extent as the Obligations of such Subsidiary
Guarantor are subordinated to Senior Indebtedness of such Subsidiary Guarantor.

 

SECTION 12.03.
Default on Senior Indebtedness of Subsidiary Guarantor. No Subsidiary Guarantor
may make any payment pursuant to any of its Obligations or repurchase, redeem
or otherwise retire or defease any Securities or other Obligations
(collectively, “pay its Subsidiary Guaranty”) if (i) any Senior Indebtedness of
the Company is not paid when due or (ii) any other default on Senior
Indebtedness of the Company occurs and the maturity of such Senior Indebtedness
is accelerated in accordance with its terms unless, in either case, (x) the
default has been cured or waived and any such acceleration has been rescinded
or (y) such Senior Indebtedness has been paid in full; provided, however, that
any Subsidiary Guarantor may pay its Subsidiary Guaranty without regard to the
foregoing if such

 

94

 

Subsidiary Guarantor and the
Trustee receive written notice approving such payment from the Representatives
of such Senior Indebtedness. No Subsidiary Guarantor may pay its Subsidiary
Guaranty during the continuance of any Payment Blockage Period after receipt by
the Company and the Trustee of a Payment Notice under Section 10.03.
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the first sentence of this
Section), unless the holders of Senior Indebtedness giving such Payment Notice
or the Representative of such holders shall have accelerated the maturity of
such Senior Indebtedness, any Subsidiary Guarantor may resume payments pursuant
to its Subsidiary Guaranty after termination of such Payment Blockage Period.

 

SECTION 12.04.
Demand for Payment. If a demand for payment is made on a Subsidiary Guarantor
pursuant to Article 11, the Trustee shall promptly notify the Company and the
Company shall promptly notify the holders of the Senior Indebtedness (or their
Representatives) of such demand.

 

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

 

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

 

95

 

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

 

(1)
impair, as between a Subsidiary Guarantor and Securityholders, the obligation
of such Subsidiary Guarantor, which is absolute and unconditional, to pay the
Obligations to the extent set forth in Article 11 or the relevant Subsidiary
Guaranty; or

 

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

 

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

 

SECTION 12.09.
Rights of Trustee and Paying Agent. Notwithstanding Section 12.03, the Trustee
or Paying Agent may continue to receive payments with respect to any Subsidiary
Guaranty and shall not be charged with knowledge of the existence of facts that
would prohibit receiving any such payments unless, not less than two Business
Days prior to the date of such payment, a Trust Officer of the Trustee receives
written notice satisfactory to it that payments may not be received under this
Article 12. The Company, the relevant Subsidiary Guarantor, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of any Subsidiary Guarantor may give the notice; provided,
however, that, if an issue of Senior Indebtedness of any Subsidiary Guarantor
has a Representative, only the Representative may give the notice. 

 

96

 

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

 

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

 

SECTION 12.11.
Article 12 Not To Prevent Defaults Under a Subsidiary Guaranty or Limit Right
To Demand Payment. The failure to make a payment pursuant to a Subsidiary
Guaranty by reason of any provision in this Article 12 shall not be construed
as preventing the occurrence of a default under such Subsidiary Guaranty.
Nothing in this Article 12 shall have any effect on the right of the Securityholders
or the Trustee to make a demand for payment on any Subsidiary Guarantor
pursuant to Article 11.

 

SECTION 12.12.
Trustee Entitled To Rely. Upon any payment or distribution pursuant to this
Article 12, the Trustee and the Securityholders shall be entitled to rely (i)
upon any order or decree of a court of competent jurisdiction in which any
proceedings of the nature referred to in Section 12.02 are pending, (ii) upon a
certificate of the liquidating trustee or agent or other Person making such
payment or distribution to the Trustee or to the Securityholders or (iii) upon
the Representatives for the holders of Senior Indebtedness of any Subsidiary
Guarantor for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of such Senior

 

97

 

Indebtedness and other
indebtedness of such Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 12. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of any Subsidiary Guarantor to
participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such
Subsidiary Guarantor held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 12, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 12.

 

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

 

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

 

98

 

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

 

ARTICLE 13

 

Miscellaneous

 

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

 

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

 

if to the Company or any
Subsidiary Guarantor:

 

Roller Bearing Company of
America, Inc.

60 Round Hill Road

P.O. Box 430

Fairfield, Connecticut
06430-0430

Facsimile No.: (203) 255-3862

 

Attention of President

 

99

 

if to the Trustee:

 

United States Trust Company
of New York

114 West 47th Street

New York, New York 10036

 

Attention of Corporate Trust
Department

 

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

 

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

 

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

 

SECTION 13.03.
Communication by Holders with Other Holders. Securityholders may communicate
pursuant to TIA ss. 312(b) with other Securityholders with respect to their
rights under this Indenture or the Securities. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA ss. 312(c).

 

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

 

(1)
an Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent,

 

100

 

if any, provided for in this
Indenture relating to the proposed action  have been complied with; and

 

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

 

SECTION 13.05.
Statements Required in Certificate or Opinion. Each certificate or opinion with
respect to compliance with a covenant or condition provided for in this
Indenture shall include:

 

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

 

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

 

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

 

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

 

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

 

101

 

owned shall be so disregarded.
Also, subject to the foregoing, only Securities outstanding at the time shall
be considered in any such determination.

 

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

 

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

 

SECTION 13.09.
Governing Law. This Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York but without
giving effect to applicable principles of conflicts of law to the extent that the
application of the laws of another jurisdiction would be required thereby.

 

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

 

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

 

SECTION 13.12.
Multiple Originals. The parties may sign any number of copies of this
Indenture. Each

 

102

 

signed copy shall be an
original, but all of them together represent the same agreement. One signed copy
is enough to prove this Indenture.

 

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

 

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

 

	
   

  	
  ROLLER BEARING COMPANY OF

  AMERICA, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  INDUSTRIAL TECTONICS BEARINGS

  CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  RBC LINEAR PRECISION PRODUCTS,

  INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  

 

103

 

	
   

  	
  RBC NICE BEARINGS, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  UNITED STATES TRUST COMPANY OF

  NEW YORK,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  

 

104

 

EXHIBIT A

[FORM
OF FACE OF EXCHANGE SECURITY OR

PRIVATE
EXCHANGE SECURITY]

 

	
  *

  	
   

  	
   

  
	
  **

  	
   

  	
  CUSIP
  No. No.              

  
	
  $

  	
   

  	
   

  

9-5/8%
Senior Subordinated Notes Due 2007

 

ROLLER BEARING COMPANY OF
AMERICA, INC., a Delaware corporation, promises to pay to, or registered
assigns, the principal sum of Dollars on June 15, 2007.

 

Interest Payment Dates:  June 15 and December 15

Record Dates:  June 1 and December 1

 

* If the Security is to be
issued in global form add the Global Securities Legend from Exhibit 1 to
Appendix A and the Attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO
GLOBAL SECURITIES]—SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.

 

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

 

105

 

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

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  ROLLER BEARING COMPANY OF

  AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Secretary

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  UNITED STATES TRUST

  COMPANY OF NEW YORK,

  	
   

  
	
   

  	
  as Trustee, certifies that

  	
   

  
	
   

  	
  this is one of

  	
   

  	
  [Seal]

  
	
   

  	
  the Securities referred

  	
   

  
	
   

  	
  to in the Indenture.

  	
   

  
	
   

  	
   

  
	
  by

  	
   

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  
									

 

2

 

[FORM
OF REVERSE SIDE OF EXCHANGE SECURITY

OR
PRIVATE EXCHANGE SECURITY]

 

9-5/8%
Senior Subordinated Note Due 2007

1. Interest

 

Roller Bearing Company of
America, Inc., a Delaware corporation (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the “Company”),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above; provided, however, that if a Registration Default (as
defined in the Registration Rights Agreement) occurs, additional interest will
accrue on this Security at a rate of 0.50% per annum from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured. The Company will pay
interest semiannually on June 15 and December 15 of each year, commencing on
December 15, 1997. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
June 23, 1997. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay interest on overdue principal at the rate
borne by the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

2. Method of Payment

 

The Company will pay interest
on the Securities (except defaulted interest) to the Persons who are registered
holders of Securities at the close of business on the June 1 or December 1 next
preceding the interest payment date even if Securities are canceled after the
record date and on or before the interest payment date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company will
pay principal and interest in 

 

3

 

money of the United States
that at the time of payment is legal tender for payment of public and private
debts. Payments in respect of the Securities (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the accounts
specified by the holders thereof or, if no U.S. dollar account maintained by
the payee with a bank in the United States is designated by any holder to the
Trustee or the Paying Agent at least 30 days prior to the relevant due date for
payment (or such other date as the Trustee may accept in its discretion), by
mailing a check to the registered address of such holder.

 

3. Paying Agent and Registrar

 

Initially, United States
Trust Company of New York, a New York trust company (“Trustee”), will act as Paying
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.

 

4. Indenture

 

The Company issued the
Securities under an Indenture dated as of June 15, 1997 (“Indenture”), among
the Company, the Subsidiary Guarantors and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.

 

The Securities are general
unsecured obligations of the Company limited to $110,000,000 aggregate
principal amount (subject to Section 2.07 of the Indenture). The Indenture
contains certain covenants which, among other things, limit (a) the incurrence
of additional indebtedness 

 

4

 

by the Company and certain of
its subsidiaries, (b) the payment of Restricted Payments (c) certain
transactions with affiliates, (d) sales of assets, including capital stock of
subsidiaries, (e) sales and issuances of capital stock by certain subsidiaries
and (f) certain consolidations and mergers. The Indenture also will prohibit
certain restrictions on distributions from subsidiaries. In addition, the
Company may be obligated, under certain circumstances, to offer to repurchase
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest to the date of repurchase.

 

5. Optional Redemption

 

Except as set forth in the
following paragraph, the Securities may not be redeemed prior to June 15, 2002.
On and after that date, the Company may redeem the Securities in whole at any
time or in part from time to time at the following redemption prices (expressed
in percentages of principal amount), plus accrued interest to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date):

 

if
redeemed during the

12-month
period beginning June 15

of
the years set forth below:

	
   

  	
   

  	
  Percentage

  
	
  2002

  	
   

  	
  104.8125%

  
	
  2003

  	
   

  	
  103.2083

  
	
  2004

  	
   

  	
  101.6041

  
	
  2005 and thereafter

  	
   

  	
  100.0000

  

 

In addition, at any time and
from time to time prior to June 15, 2000, the Company may redeem in the
aggregate up to $36.0 million principal amount of the Securities with the
proceeds of one or more Public Equity Offerings following which there is a
Public Market (provided that a portion of the net cash proceeds thereof equal
to the amount required to redeem any such Securities is contributed to the
equity capital of the Company), at a redemption price (expressed as a
percentage of principal amount) of 109.625% plus accrued interest to the
redemption date (subject to the

 

5

 

right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date); provided, however, that at least $74.0 million aggregate
principal amount of the Securities must remain outstanding after each such
redemption.

 

6. Notice of Redemption

 

Notice of redemption will be
mailed by first-class mail at least 30 days but not more than 60 days before
the redemption date to each Holder of Securities to be redeemed at his
registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of and accrued interest on all Securities (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.

 

7. Put Provisions

 

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

 

6

 

8. Subordination

 

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

 

9. Guarantees

 

The Company’s obligations
with respect to the Securities are guaranteed, to the extent provided in the
Indenture, by the Subsidiary Guarantors.

 

10. Denominations; Transfer;
Exchange

 

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

 

11. Persons Deemed Owners

 

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

 

7

 

12. Unclaimed Money

 

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

 

13. Discharge and Defeasance

 

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

 

14. Amendment, Waiver

 

Subject to certain exceptions
set forth in the Indenture, (i) the Indenture or the Securities may be amended
with the written consent of the Holders of at least a majority (or, in certain
cases, 75%) in principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated
Securities, or to add guarantees with respect to the Securities or to secure
the Securities, or to add additional covenants or surrender rights and powers
conferred on the Company, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.

 

8

 

15. Defaults and Remedies

 

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

 

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

 

9

 

16. Trustee Dealings with the
Company

 

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

 

17. No Recourse Against
Others

 

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

 

18. Authentication

 

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

 

19. Abbreviations

 

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

 

10

 

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

 

21. Holders’ Compliance with
Registration Rights Agreement.

 

Each Holder of a Security, by
acceptance hereof, acknowledges and agrees to the provisions of the
Registration Rights Agreement, including, without limitation, the obligations
of the Holders with respect to a registration and the indemnification of the
Company to the extent provided therein.

 

22. Governing Law.

 

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

 

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

 

Roller Bearing Company of
America, Inc.

60 Round Hill Road

P.O. Box 430

Fairfield, Connecticut
06430-0430

 

Attention of: Secretary

 

11

 

ASSIGNMENT
FORM

 

To assign this Security, fill
in the form below:

 

I or we assign and transfer
this Security to

 

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

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

 

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

 

 

	
  Date:

  	
   

  	
  Your Signature:

  	
   

  	
   

  

 

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

 

12

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have
this Security purchased by the Company pursuant to Section 4.06 or 4.09 of the
Indenture, check the box:

 

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

 

	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as

  
	
   

  	
   

  	
  your name appears

  
	
   

  	
   

  	
  on the other side

  
	
   

  	
   

  	
  of this Security.)

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
  (Signature
  must be guaranteed)

  	
   

  
								

 

13

 

RULE 144A/REGULATION S
APPENDIX

 

FOR
OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO

RULE 144A AND TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN

RELIANCE ON REGULATION S.

 

PROVISIONS
RELATING TO INITIAL SECURITIES,

PRIVATE EXCHANGE SECURITIES

AND EXCHANGE SECURITIES

 

1. Definitions

 

1.1 Definitions

 

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

 

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

 

“Exchange Securities” means
the 9-5/8% Senior Subordinated Notes Due 2007 to be issued pursuant to this
Indenture in connection with a Registered Exchange Offer pursuant to the
Registration Rights Agreement.

 

“Initial Purchaser” means
Credit Suisse First Boston Corporation.

 

“Initial Securities” means
the 9-5/8% Senior Subordinated Notes Due 2007, issued under this Indenture on
or about the date hereof. 

 

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

 

“Private Exchange Securities”
means the 9-5/8% Senior Subordinated Notes Due 2007 to be issued pursuant to
this Indenture to the Initial Purchasers in a Private Exchange.

 

 

“Purchase Agreement” means
the Purchase Agreement dated June 17, 1997, among the Company, the Subsidiary
Guarantors and the Initial Purchaser.

 

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

 

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

 

“Registration Rights
Agreement” means the Registration Rights Agreement dated June 17, 1997, among
the Company, the Subsidiary Guarantors and the Initial Purchaser.

 

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

“Securities Act” means the
Securities Act of 1933.

 

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

 

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

 

“Transfer Restricted
Securities” means Securities that bear or are required to bear the legend set
forth in Section 2.3(b) hereto. 

 

2

 

1.2 Other Definitions

 

	
  Term

  	
   

  	
  Defined in

  Section:

  
	
  “Agent Members”

  	
   

  	
  2.1(b)

  
	
  “Global Security”

  	
   

  	
  2.1(a)

  
	
  “Regulation S”

  	
   

  	
  2.1(a)

  
	
  “Rule 144A”

  	
   

  	
  2.1(a)

  

 

2. The Securities.

 

2.1 Form and Dating.

 

The Initial Securities are
being offered and sold by the Company pursuant to the Purchase Agreement.

 

(a) Global Securities.
Initial Securities offered and sold to a QIB in reliance on Rule 144A under the
Securities Act (“Rule 144A”) or in reliance on Regulation S under the
Securities Act (“Regulation S”), in each case as provided in the Purchase
Agreement, shall be issued initially in the form of one or more permanent
global Securities in definitive, fully registered form without interest coupons
with the global securities legend and restricted securities legend set forth in
Exhibit 1 hereto (each, a Global Security”), which shall be deposited on behalf
of the purchasers of the Initial Securities represented thereby with the
Trustee, at its New York office, as custodian for the Depositary (or with such
other custodian as the Depositary may direct), 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 hereinafter provided. The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depositary or its
nominee as hereinafter provided.

 

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

 

3

 

The Company shall execute and
the Trustee shall, in accordance with this Section 2.1(b), authenticate and
deliver initially one or more Global Securities that (a) shall be registered in
the name of the Depositary for such Global Security or Global Securities or the
nominee of such Depositary and (b) shall 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.

 

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

 

2.2 Authentication. The
Trustee shall authenticate and deliver: (1) Initial Securities for original
issue in an aggregate principal amount of $110,000,000 and (2) Exchange
Securities or Private Exchange Securities for issue only in a Registered
Exchange Offer or a Private Exchange, respectively, pursuant to the
Registration Rights Agreement, for a like principal amount of Initial
Securities, in each case upon a written order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is
to be authenticated and whether the Securities are to be Initial Securities,
Exchange Securities or Private Exchange Securities. The aggregate principal
amount of Securities outstanding at any time may not exceed $110,000,000 except
as provided in Section 2.07 of this Indenture.

 

4

 

2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities. (i) The transfer and exchange
of Global Securities or beneficial interests therein shall 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 Security
shall 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 Security. The Registrar shall, 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 Security and to debit the
account of the Person making the transfer the beneficial interest in the Global
Security being transferred.

 

(ii) Notwithstanding any
other provisions of this Rule 144A/Regulation S Appendix (other than the
provisions set forth in Section 2.4), a Global Security 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.

 

(iii) In the event that a
Global Security is exchanged for Securities in definitive registered form
pursuant to Section 2.4 or Section 2.09 of the Indenture prior to the
consummation of a Registered Exchange Offer or the effectiveness of a Shelf
Registration Statement with respect to such Securities, such Securities may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Securities 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.

 

5

 

(b) Legends.

 

(i) Except as permitted by
the following paragraphs (ii), (iii) and (iv), each Security certificate
evidencing the Global Securities (and all Securities issued in exchange
therefor or in substitution thereof) shall bear a legend in substantially the
following form:

 

“THIS SECURITY (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A  TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”),
AND THIS SECURITY MAY NOT BE OFFERED,
SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER
OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED
ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (ii) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
904 UNDER THE SECURITIES ACT,
(iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (iv) TO THE COMPANY OR (v)
PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (v) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM
IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)ABOVE.

 

BY ITS ACQUISITION HEREOF,
THE HOLDER REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THIS 

 

6

 

SECURITY IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S.

 

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

 

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

 

(iv) Upon the consummation of
a Registered Exchange Offer with respect to the Initial Securities pursuant to
which Holders of such Initial Securities are offered Exchange Securities in
exchange for their Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be issued
in global form will cease to apply and certificated Initial Securities with the
Restricted Securities Legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated or global form (without the
legends set forth above) will be available to Holders that

 

7

 

exchange such Initial Securities
in such Registered Exchange Offer.

 

(v) Upon the consummation of
a Private Exchange with respect to the Initial Securities pursuant to which
Holders of such Initial Securities are offered Private Exchange Securities in
exchange for their Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be issued
in global form will still apply, and Private Exchange Securities in global form
with the Restricted Securities Legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such Private
Exchange.

 

(e) Cancelation or Adjustment
of Global Security. At such time as all beneficial interests in a Global
Security have either been exchanged for certificated Securities, redeemed,
repurchased or canceled, such Global Security shall be returned to the
Depositary for cancelation or retained and canceled by the Trustee. At any time
prior to such cancelation, if any beneficial interest in a Global Security is
exchanged for certificated Securities, redeemed, repurchased or canceled, the
principal amount of Securities represented by such Global Security shall be
reduced and an adjustment shall be made on the books and records of the Trustee
(if it is then the Securities Custodian for such Global Security) with respect
to such Global Security, by the Trustee or the Securities Custodian, to reflect
such reduction.

 

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

 

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

 

(ii) No service charge shall
be made for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax, assessments or
similar governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable upon

 

8

 

exchange or transfer pursuant
to Sections 3.06, 4.09 and 9.05 of the Indenture).

 

(iii) The Registrar or
co-registrar shall not be required to register the transfer of or exchange of
(a) any certificated Security selected for redemption in whole or in part
pursuant to Article 3 of this Indenture, except the unredeemed portion of any
certificated Security being redeemed in part, or (b) any Security for a period
beginning 15 Business Days before the mailing of a notice of an offer to
repurchase or redeem Securities or 15 Business Days before an interest payment
date.

 

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

 

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

 

(g) No Obligation of the Trustee.

 

(i) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of or 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 or member thereof with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
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 Securities. All notices and communications to be given to the
Holders and all

 

9

 

payments to be made to
Holders under the Securities shall be given or made only to or upon the order
of the registered Holders (which shall be the Depositary or its nominee in the
case of a Global Security). The rights of beneficial owners in any Global
Security shall be exercised only through the Depositary subject to the
applicable rules and procedures of the Depositary. The Trustee may rely and
shall be fully protected in relying upon information furnished by the
Depositary with respect to its members, participants and any beneficial owners.

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

 

2.4 Certificated Securities.

 

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

 

10

 

(b) Any Global Security that
is transferable to the beneficial owners thereof pursuant to this Section shall
be surrendered by the Depositary to the Trustee located in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or from time to
time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Initial Securities of authorized
denominations. Any portion of a Global Security transferred pursuant to this
Section shall 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 certificated Initial Security
delivered in exchange for an interest in the Global Security shall, except as
otherwise provided by Section 2.3(b), bear the Restricted Securities Legend set
forth in Exhibit 1 hereto.

 

(c) In the event of the
occurrence of any of the events specified in Section 2.4(a), the Company will
promptly make available to the Trustee a reasonable supply of certificated Securities
in definitive, fully registered form without interest coupons.

 

2.5 Proxies.

 

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

 

11

 

	
   

  	
  EXHIBIT
  1

  
	
   

  	
  to

  
	
   

  	
  RULE
  144A/REGULATION S APPENDIX

  

 

[FORM
OF FACE OF INITIAL SECURITY]

 

[Global
Securities Legend]

 

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

 

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

 

[Restricted
Securities Legend]

 

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

 

THE HOLDER OF THIS SECURITY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) TO A PERSON WHOM

 

 

THE SELLER REASONABLY
BELIEVES IS A QIB (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (iv) TO THE COMPANY OR (v) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH
(v) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

 

BY ITS ACQUISITION HEREOF,
THE HOLDER REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S.

 

2

 

	
  CUSIP
  No.

  	
   

  
	
  $

  	
   

  

 

9-5/8%
Senior Subordinated Notes Due 2007

 

ROLLER BEARING COMPANY OF
AMERICA, INC., a Delaware corporation, promises to pay to, or registered
assigns, the principal sum of Dollars on June 15, 2007.

 

Interest Payment Dates:  June 15 and December 15

Record Dates:  June 1 and December 1

 

3

 

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

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  ROLLER BEARING COMPANY OF

  AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Secretary

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  UNITED STATES TRUST

  COMPANY OF NEW YORK,

  	
   

  
	
   

  	
  as Trustee, certifies that

  	
   

  
	
   

  	
  this is one of

  	
   

  	
  [Seal]

  
	
   

  	
  the Securities referred

  	
   

  
	
   

  	
  to in the Indenture.

  	
   

  
	
   

  	
   

  
	
  by

  	
   

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  
									

 

4

 

[FORM
OF REVERSE SIDE OF INITIAL SECURITY]

9-5/8%
Senior Subordinated Note Due 2007

 

1. Interest

 

Roller Bearing Company of
America, Inc., a Delaware corporation (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the “Company”),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above; provided, however, that if a Registration Default (as
defined in the Registration Rights Agreement) occurs, additional interest will
accrue on this Security at a rate of 0.50% per annum from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured. The Company will pay
interest semiannually on June 15 and December 15 of each year, commencing on
December 15, 1997. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
June 23, 1997. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay interest on overdue principal at
the rate borne by the Securities plus 1% per annum, and it shall pay interest
on overdue installments of interest at the same rate to the extent lawful.

 

2. Method of Payment

 

The Company will pay interest
on the Securities (except defaulted interest) to the Persons who are registered
holders of Securities at the close of business on the June 1 or December 1 next
preceding the interest payment date even if Securities are canceled after the
record date and on or before the interest payment date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company will
pay principal and interest in 

 

5

 

money of the United States
that at the time of payment is legal tender for payment of public and private
debts. Payments in respect of the Securities represented by a Global Security
(including principal, premium and interest) will be made by wire transfer of
immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a certificated
Security (including principal, premium and interest) by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on
a certificated Security will be made by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).

 

3. Paying Agent and Registrar

 

Initially, United States
Trust Company of New York, a New York trust company (“Trustee”), will act as
Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.

 

4. Indenture

 

The Company issued the
Securities under an Indenture dated as of June 15, 1997 (“Indenture”), among
the Company, the Subsidiary Guarantors and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and

 

6

 

Securityholders are referred
to the Indenture and the Act for a statement of those terms.

 

The Securities are general
unsecured obligations of the Company limited to $110,000,000 aggregate
principal amount (subject to Section 2.07 of the Indenture). The Indenture
contains certain covenants which, among other things, limit (a) the incurrence
of additional indebtedness by the Company and certain of its subsidiaries, (b)
the payment of Restricted Payments (c) certain transactions with affiliates,
(d) sales of assets, including capital stock of subsidiaries, (e) sales and
issuances of capital stock by certain subsidiaries and (f) certain
consolidations and mergers. The Indenture also will prohibit certain
restrictions on distributions from subsidiaries. In addition, the Company may
be obligated, under certain circumstances, to offer to repurchase Securities at
a purchase price equal to 101% of the principal amount thereof, plus accrued
and unpaid interest to the date of repurchase.

 

5. Optional Redemption

 

Except as set forth in the
following paragraph, the Securities may not be redeemed prior to June 15, 2002.
On and after that date, the Company may redeem the Securities in whole at any
time or in part from time to time at the following redemption prices (expressed
in percentages of principal amount), plus accrued interest to the

 

7

 

redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date):

if
redeemed during the 12-month

period
beginning June 15 of the

years
set forth below:

 

	
   

  	
   

  	
  Percentage

  
	
  2002

  	
   

  	
  104.8125%

  
	
  2003

  	
   

  	
  103.2083

  
	
  2004

  	
   

  	
  101.6041

  
	
  2005 and thereafter

  	
   

  	
  100.0000

  

 

In addition, at any time and
from time to time prior to June 15, 2000, the Company may redeem in the
aggregate up to $36.0 million principal amount of the Securities with the
proceeds of one or more Public Equity Offerings following which there is a
Public Market (provided that a portion of the net cash proceeds thereof equal
to the amount required to redeem any such Securities is contributed to the
equity capital of the Company), at a redemption price (expressed as a
percentage of principal amount) of 109.625% plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least $74.0 million aggregate principal amount of
the Securities must remain outstanding after each such redemption.

 

6. Notice of Redemption

 

Notice of redemption will be
mailed by first-class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Securities to be redeemed at his registered
address. Securities in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Securities (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are
satisfied,

 

8

 

on and after such date
interest ceases to accrue on such Securities (or such portions thereof) called
for redemption.

 

7. Put Provisions

 

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

 

8. Subordination

 

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

 

9. Guarantees

 

The Company’s obligations
with respect to the Securities are guaranteed, to the extent provided in the
Indenture, by the Subsidiary Guarantors.

 

10. Denominations; Transfer;
Exchange

 

The Securities are in
registered form without coupons in denominations of $1,000 and whole multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees

 

9

 

required by law or permitted
by the Indenture. The Registrar need not register the transfer of or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.

 

11. Persons Deemed Owners

 

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

 

12. Unclaimed Money

 

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

 

13. Discharge and Defeasance

 

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

 

14. Amendment, Waiver

 

Subject to certain exceptions
set forth in the Indenture, (i) the Indenture or the Securities may be amended
with the written consent of the Holders of at least a majority (or, in certain
cases, 75%) in principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with the

 

10

 

written consent of the
Holders of a majority in principal amount outstanding of the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent
of any Securityholder, the Company and the Trustee may amend the Indenture or
the Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to
add additional covenants or surrender rights and powers conferred on the
Company, or to comply with any request of the SEC in connection with qualifying
the Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder.

 

15. Defaults and Remedies

 

Under the Indenture, Events
of Default include (i) default for 30 days in payment of interest on the
Securities; (ii) default in payment of principal on the Securities at maturity,
upon redemption pursuant to paragraph 5 of the Securities, upon acceleration or
otherwise, or failure by the Company to redeem or purchase Securities when
required; (iii) failure by the Company to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company if the amount
accelerated (or so unpaid) exceeds $5 million; (v) certain events of bankruptcy
or insolvency with respect to the Company and the Significant Subsidiaries;
(vi) certain judgments or decrees for the payment of money in excess of $5
million; and (vii) certain events with respect to the guarantees of the Company’s
obligations under the Securities by the Subsidiary Guarantors. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately or, in certain circumstances, after giving notice to the
Representative under the Credit Agreement. Certain events of bankruptcy or

 

11

 

insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.

 

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

 

16. Trustee Dealings with the
Company

 

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

17. No Recourse Against
Others

 

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

 

12

 

18. Authentication

 

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

 

19. Abbreviations

 

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

 

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

 

21. Holders’ Compliance with
Registration Rights Agreement.

 

Each Holder of a Security, by
acceptance hereof, acknowledges and agrees to the provisions of the
Registration Rights Agreement, including, without limitation, the obligations
of the Holders with respect to a registration and the indemnification of the
Company to the extent provided therein.

 

13

 

22. Governing Law.

 

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

 

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

Roller Bearing Company of
America, Inc.

60 Round Hill Road

P.O. Box 430

Fairfield, Connecticut
06430-0430

 

Attention of: Secretary

 

ASSIGNMENT
FORM

 

To assign this Security, fill
in the form below:

 

I or we assign and transfer
this Security to

 

 

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

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

 

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

 

 

	
  Date:

  	
   

  	
  Your
  Signature:

  	
   

  	
   

  

 

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

 

14

 

In connection with any
transfer of any of the Securities evidenced by this certificate occurring prior
to the expiration of the period referred to in Rule 144(k) under the Securities
Act after the later of the date of original issuance of such Securities and the
last date, if any, on which such Securities were owned by the Company or any
Affiliate of the Company, the undersigned confirms that such Securities 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 of 1933; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  o

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (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 of 1933;
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  o

  	
   

  	
  pursuant to another
  available exemption from registration provided by Rule 144 under the
  Securities Act of 1933.

  

 

15

 

Unless one of the boxes is
checked, the Trustee will refuse to register any of the Securities 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 may
require, prior to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Company has reasonably requested
to confirm that such transfer is being made pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of the Securities
Act of 1933, such as the exemption provided by Rule 144 under such Act.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature
  must be guaranteed

  	
   

  
	
  Signature

  
				

 

TO BE COMPLETED BY PURCHASER
IF (3) ABOVE IS CHECKED.

 

The undersigned represents
and warrants that it is purchasing this Security for its own account or an
account with respect to which it exercises sole investment discretion and that
it and any such account is a “qualified institutional buyer” within the meaning
of Rule 144A under the Securities Act of 1933, and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has

 

16

 

determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned’s foregoing representations in order to claim the exemption from
registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:

  	
  To be executed by

  
	
   

  	
   

  	
   

  	
  an
  executive officer 

  
						

 

17

 

[TO
BE ATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY

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

 

	
  Date of

  Exchange

  	
   

  	
  Amount of decrease

  in Principal

  Amount of this

  Global Security

  	
   

  	
  Amount of increase

  in Principal

  Amount of this

  Global Security

  	
   

  	
  Principal amount

  of this Global

  Security following

  such decrease or

  increase)

  	
   

  	
  Signature of

  authorized officer

  of Trustee or

  Securities

  Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

18

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have
this Security purchased by the Company pursuant to Section 4.06 or 4.09 of the
Indenture, check the box:   o

 

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

 

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your name

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  appears on the other side
  of

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  this Security.)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
  (Signature
  must be guaranteed) 

  	
   

  
							

 

19

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