Document:

<Page>

                                                                   EXHIBIT 10.17

                                    GUARANTY

       GUARANTY dated as of November 10, 2003, made by the undersigned (the
"GUARANTOR") in favor of JPMorgan Chase Bank and/or any of its subsidiaries or
affiliates (individually or collectively, as the context may require, the
"BANK").

       PRELIMINARY STATEMENTS: The Bank has entered, or may from time to time
enter, into agreements or arrangements with Navigation Technologies North
America, LLC (the "BORROWER") providing for credit extensions or financial
accommodation to the Borrower of any kind whatsoever, including but not limited
to the making of loans, advances or overdrafts, whether or not secured, discount
or purchase of notes, securities or other instruments or property, creation of
acceptances, issuance or confirmation of letters of credit, guaranties or
indemnities, entering into foreign exchange or precious metals contracts or
interest rate or currency swap or protection agreements or any other kind of
contract or agreement under which the Borrower may be indebted to the Bank in
any manner (all of the foregoing agreements or arrangements being the
"FACILITIES" and any writing evidencing, supporting or securing a Facility,
including but not limited to this Guaranty and the Credit Agreement of even date
herewith between the Borrower and the Bank (the "Credit Agreement"), as such
writing may be amended, modified or supplemented from time to time, a "FACILITY
DOCUMENT"). The Guarantor owns a substantial amount of the stock or other
ownership interests of the Borrower and is financially interested in its
affairs.

       THEREFORE, in order to induce the Bank to extend credit or give financial
accommodation under the Facilities, the Guarantor agrees as follows:

       Section 1.  GUARANTY OF PAYMENT. The Guarantor unconditionally and
irrevocably guarantees to the Bank the punctual payment of all sums now owing or
which may in the future be owing by the Borrower under the Facilities, when the
same are due and payable, whether on demand, at stated maturity, by acceleration
or otherwise, and whether for principal, interest, fees, expenses,
indemnification or otherwise (all of the foregoing sums being the
"LIABILITIES"). The Liabilities include, without limitation, interest accruing
after the commencement of a proceeding under bankruptcy, insolvency or similar
laws of any jurisdiction at the rate or rates provided in the Facility
Documents. This Guaranty is a guaranty of payment and not of collection only.
The Bank shall not be required to exhaust any right or remedy or take any action
against the Borrower or any other person or entity or any collateral. The
Guarantor agrees that, as between the Guarantor and the Bank, the Liabilities
may be declared to be due and payable for the purposes of this Guaranty
notwithstanding any stay, injunction or other prohibition which may prevent,
delay or vitiate any declaration as regards the Borrower and that in the event
of a declaration or attempted declaration, the Liabilities shall immediately
become due and payable by the Guarantor for the purposes of this Guaranty.

       Section 2.  GUARANTY ABSOLUTE. The Guarantor guarantees that the
Liabilities shall be paid strictly in accordance with the terms of the
Facilities. The liability of the Guarantor under this Guaranty is absolute and
unconditional irrespective of: (a) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Facility Documents or
Liabilities, or any other amendment or waiver of or any consent to departure
from any of the terms of any Facility Document or Liability, including any
increase or decrease in the rate of interest thereon; (b) any release or
amendment or waiver of, or consent to departure from, any other guaranty or

                                        4
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support document, or any exchange, release or non-perfection of any collateral,
for all or any of the Facility Documents or Liabilities; (c) any present or
future law, regulation or order of any jurisdiction (whether of right or in
fact) or of any agency thereof purporting to reduce, amend, restructure or
otherwise affect any term of any Facility Document or Liability; (d) without
being limited by the foregoing, any lack of validity or enforceability of any
Facility Document or Liability; and (e) any other setoff, defense or
counterclaim whatsoever (in any case, whether based on contract, tort or any
other theory) with respect to the Facility Documents or the transactions
contemplated thereby which might constitute a legal or equitable defense
available to, or discharge of, the Borrower or a guarantor.

       Section 3.  GUARANTY IRREVOCABLE. This Guaranty is a continuing guaranty
of the payment of all Liabilities now or hereafter existing under the Facilities
and shall remain in full force and effect until payment in full of all
Liabilities and other amounts payable under this Guaranty and until the
Facilities are no longer in effect or, if earlier, when the Guarantor has given
the Bank written notice that this Guaranty has been revoked; PROVIDED that any
notice under this Section shall not release the Guarantor from any Liability,
absolute or contingent, existing prior to the Bank's actual receipt of the
notice at its branches or departments responsible for the Facilities and
reasonable opportunity to act upon such notice.

       Section 4.  REINSTATEMENT. This Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of any of the
Liabilities is rescinded or must otherwise be returned by the Bank on the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as
though the payment had not been made.

       Section 5.  SUBROGATION. The Guarantor shall not exercise any rights
which it may acquire by way of subrogation, by any payment made under this
Guaranty or otherwise, until all the Liabilities have been paid in full and the
Facilities are no longer in effect. If any amount is paid to the Guarantor on
account of subrogation rights under this Guaranty at any time when all the
Liabilities have not been paid in full, the amount shall be held in trust for
the benefit of the Bank and shall be promptly paid to the Bank to be credited
and applied to the Liabilities, whether matured or unmatured or absolute or
contingent, in accordance with the terms of the Facilities. If the Guarantor
makes payment to the Bank of all or any part of the Liabilities and all the
Liabilities are paid in full and the Facilities are no longer in effect, the
Bank shall, at the Guarantor's request, execute and deliver to the Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Guarantor of an
interest in the Liabilities resulting from the payment.

       Section 6.  SUBORDINATION. Without limiting the Bank's rights under any
other agreement, any liabilities owed by the Borrower to the Guarantor in
connection with any extension of credit or financial accommodation by the
Guarantor to or for the account of the Borrower, including but not limited to
interest accruing at the agreed contract rate after the commencement of a
bankruptcy or similar proceeding, are hereby subordinated to the Liabilities,
and such liabilities of the Borrower to the Guarantor, if the Bank so requests,
shall be collected, enforced and received by the Guarantor as trustee for the
Bank and shall be paid over to the Bank on account of the Liabilities but
without reducing or affecting in any manner the liability of the Guarantor under
the other provisions of this Guaranty.

       Section 7.  PAYMENTS GENERALLY. All payments by the Guarantor shall be
made in the manner, at the place and in the currency (the "PAYMENT CURRENCY")
required by the Facility

                                        5
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Documents; PROVIDED, HOWEVER, that (if the Payment Currency is other than U.S.
dollars) the Guarantor may, at its option (or, if for any reason whatsoever the
Guarantor is unable to effect payments in the foregoing manner, the Guarantor
shall be obligated to) pay to the Bank at its principal office the equivalent
amount in U.S. dollars computed at the selling rate of the Bank or a selling
rate chosen by the Bank, most recently in effect on or prior to the date the
Liability becomes due, for cable transfers of the Payment Currency to the place
where the Liability is payable. In any case in which the Guarantor makes or is
obligated to make payment in U.S. dollars, the Guarantor shall hold the Bank
harmless from any loss incurred by the Bank arising from any change in the value
of U.S. dollars in relation to the Payment Currency between the date the
Liability becomes due and the date the Bank is actually able, following the
conversion of the U.S. dollars paid by the Guarantor into the Payment Currency
and remittance of such Payment Currency to the place where such Liability is
payable, to apply such Payment Currency to such Liability.

       Section 8.  CERTAIN TAXES. The Guarantor further agrees that all payments
to be made hereunder shall be made without setoff or counterclaim and free and
clear of, and without deduction for, any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings or restrictions or conditions of any
nature whatsoever now or hereafter imposed, levied, collected, withheld or
assessed by any country or by any political subdivision or taxing authority
thereof or therein ("TAXES"). If any Taxes are required to be withheld from any
amounts payable to the Bank hereunder, the amounts so payable to the Bank shall
be increased to the extent necessary to yield to the Bank (after payment of all
Taxes) the amounts payable hereunder in the full amounts so to be paid. Whenever
any Tax is paid by the Guarantor, as promptly as possible thereafter, the
Guarantor shall send the Bank an official receipt showing payment thereof,
together with such additional documentary evidence as may be required from time
to time by the Bank.

       Section 9.  REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants that: (a) this Guaranty (i) has been authorized by all necessary
action; (ii) does not violate any agreement, instrument, law, regulation or
order applicable to the Guarantor; (iii) does not require the consent or
approval of any person or entity, including but not limited to any governmental
authority, or any filing or registration of any kind; and (iv) is the legal,
valid and binding obligation of the Guarantor enforceable against the Guarantor
in accordance with its terms, except to the extent that enforcement may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally; and (b) in executing and delivering this Guaranty,
the Guarantor has (i) without reliance on the Bank or any information received
from the Bank and based upon such documents and information it deems
appropriate, made an independent investigation of the transactions contemplated
hereby and the Borrower, the Borrower's business, assets, operations, prospects
and condition, financial or otherwise, and any circumstances which may bear upon
such transactions, the Borrower or the obligations and risks undertaken herein
with respect to the Liabilities; (ii) adequate means to obtain from the Borrower
on a continuing basis information concerning the Borrower; (iii) has full and
complete access to the Facility Documents and any other documents executed in
connection with the Facility Documents and expressly confirms the
representations and warranties of Article III of the Credit Agreement, in
respect of the Guarantor; and (iv) not relied and will not rely upon any
representations or warranties of the Bank not embodied herein or any acts
heretofore or hereafter taken by the Bank (including but not limited to any
review by the Bank of the affairs of the Borrower).

       Section 10. REMEDIES GENERALLY. The remedies provided in this Guaranty
are cumulative and not exclusive of any remedies provided by law.

                                        6
<Page>

       Section 11. SETOFF. The Guarantor agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim the
Bank may otherwise have, the Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of the Guarantor at any of the Bank's offices, in U.S. dollars
or in any other currency, against any amount payable by the Guarantor under this
Guaranty which is not paid when due (regardless of whether such balances are
then due to the Guarantor), in which case it shall promptly notify the Guarantor
thereof; PROVIDED that the Bank's failure to give such notice shall not affect
the validity thereof.

       Section 12. FORMALITIES. The Guarantor waives presentment, notice of
dishonor, protest, notice of acceptance of this Guaranty or incurrence of any
Liability and any other formality with respect to any of the Liabilities or this
Guaranty.

       Section 13. AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Guaranty, nor consent to any departure by the Guarantor
therefrom, shall be effective unless it is in writing and signed by the Bank,
and then the waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of the Bank
to exercise, and no delay in exercising, any right under this Guaranty shall
operate as a waiver or preclude any other or further exercise thereof or the
exercise of any other right.

       Section 14. EXPENSES. The Guarantor shall reimburse the Bank on demand
for all costs, expenses and charges (including without limitation fees and
charges of external legal counsel for the Bank and costs allocated by its
internal legal department) incurred by the Bank in connection with the
preparation, performance or enforcement of this Guaranty. The obligations of the
Guarantor under this Section shall survive the termination of this Guaranty.

       Section 15. ASSIGNMENT. This Guaranty shall be binding on, and shall
inure to the benefit of the Guarantor, the Bank and their respective successors
and assigns; PROVIDED that the Guarantor may not assign or transfer its rights
or obligations under this Guaranty. Without limiting the generality of the
foregoing: (a) the obligations of the Guarantor under this Guaranty shall
continue in full force and effect and shall be binding on any successor
partnership and on previous partners and their respective estates if the
Guarantor is a partnership, regardless of any change in the partnership as a
result of death retirement or otherwise; and (b) the Bank may assign, sell
participations in or otherwise transfer its rights under the Facilities to any
other person or entity, and the other person or entity shall then become vested
with all the rights granted to the Bank in this Guaranty or otherwise.

       Section 16. CAPTIONS. The headings and captions in this Guaranty are for
convenience only and shall not affect the interpretation or construction of this
Guaranty.

       Section 17. GOVERNING LAW, ETC. THIS GUARANTY SHALL BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK. THE GUARANTOR CONSENTS TO THE NONEXCLUSIVE
JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF NEW
YORK. SERVICE OF PROCESS BY THE BANK IN CONNECTION WITH ANY SUCH DISPUTE SHALL
BE BINDING ON THE GUARANTOR IF SENT TO THE GUARANTOR BY REGISTERED MAIL AT THE
ADDRESS SPECIFIED BELOW OR AS OTHERWISE SPECIFIED BY THE GUARANTOR FROM TIME TO
TIME. THE GUARANTOR WAIVES ANY RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL IN ANY

                                        7
<Page>

ACTION RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED TO THIS GUARANTY
OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION. TO THE EXTENT THAT
THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR
OTHERWISE), THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS GUARANTY.

BY ITS ACCEPTANCE OF THIS GUARANTY, THE BANK WAIVES ANY RIGHT THE BANK MAY HAVE
TO JURY TRIAL IN ANY ACTION RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

       18. INTEGRATION; EFFECTIVENESS. This Guaranty alone sets forth the entire
understanding of the Guarantor and the Bank relating to the guarantee of the
Liabilities and constitutes the entire contract between the parties relating to
the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. This
Guaranty shall become effective when it shall have been executed and delivered
by the Guarantor to the Bank. Delivery of an executed signature page of this
Guaranty by telecopy shall be effective as delivery of a manually executed
signature page of this Guaranty.

       IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its authorized officer as of the date first above
written.

                     NAVIGATION TECHNOLOGIES CORPORATION

                     By: /s/ David B. Mullen
                         -------------------
                     Name: David B. Mullen
                           ---------------
                     Title: Executive Vice President and Chief Financial Officer
                            ----------------------------------------------------

                              ADDRESS:
                              222 Merchandise Mart - Suite 900
                              Chicago, Illinois 60654

STATE OF ILLINOIS)
COUNTY OF COOK   ) ss:

       On the 10th day of November, 2003, before me came Davide B. Mullen, to me
known, who, being by me duly sworn, did depose and say that he resides at
________________________; that he is Executive Vice President and Chief
Financial Officer of NAVIGATION TECHNOLOGIES CORPORATION, the corporation
described in and which executed the foregoing instrument; and that he/she signed
his/her name thereto by like order.

                              /s/ Rosemary Dumais
                              -------------------
                              Notary Public

                                        8Exhibit 4.1

 

EXECUTION COPY

 

 

Sensus Metering Systems Inc.

Issuer

 

 

Sensus Metering Systems (Bermuda 2) Ltd.

Parent

 

 

Subsidiary Guarantors

 

 

85/8% Senior Subordinated Notes Due 2013

 

 

 

INDENTURE

 

Dated as of December 17, 2003

 

 

U.S. Bank National Association

Trustee

 

 

 

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)

  	
   

  	
   

  	
  11.02

  
	
   

  	
  (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

  

N.A. means Not Applicable.

 

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

 

 

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 TIA

  	
   

  
	
  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

  	
  Transfer and Exchange

  	
   

  
	
  SECTION 2.07

  	
  Replacement Securities

  	
   

  
	
  SECTION 2.08

  	
  Outstanding Securities

  	
   

  
	
  SECTION 2.09

  	
  Temporary Securities

  	
   

  
	
  SECTION 2.10

  	
  Cancellation

  	
   

  
	
  SECTION 2.11

  	
  Defaulted Interest

  	
   

  
	
  SECTION 2.12

  	
  CUSIP Numbers

  	
   

  
	
  SECTION 2.13

  	
  Issuance of Additional Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  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 Line of Business

  	
   

  
	
  SECTION 4.09

  	
  Change of Control

  	
   

  
	
  SECTION 4.10

  	
  Future Guarantors

  	
   

  
	
  SECTION 4.11

  	
  Compliance Certificate

  	
   

  
	
  SECTION 4.12

  	
  Further Instruments and Acts

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 5

  
	
   

  	
   

  	
   

  
	
  Successor Company

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  When Parent or 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

  	
   

  
	
  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.

  	
  Undertaking for Costs

  	
   

  
	
  SECTION 6.11.

  	
  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

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 9

  
	
   

  	
   

  	
   

  
	
  Amendments

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
  Without Consent of Holders

  	
   

  
	
  SECTION 9.02

  	
  With Consent of Holders

  	
   

  
	
  SECTION 9.03

  	
  Compliance with TIA

  	
   

  
	
  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

  	
   

  
	
  SECTION 9.07

  	
  Payment for Consent

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 10

  
	
   

  	
   

  	
   

  
	
  Subordination

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  Agreement To Subordinate

  	
   

  
	
  SECTION 10.02.

  	
  Liquidation, Dissolution, Bankruptcy

  	
   

  
	
  SECTION 10.03.

  	
  Default on Senior Indebtedness of the Company

  	
   

  
	
  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 of the Company

  	
   

  
	
  SECTION 10.16.

  	
  Reliance by Holders of Senior Indebtedness of the Company on
  Subordination Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 11

  
	
   

  	
   

  	
   

  
	
  Guarantees

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  Guarantees

  	
   

  
	
  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

  	
   

  
	
  SECTION 11.07.

  	
  Contribution

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 12

  
	
   

  	
   

  	
   

  
	
  Subordination of Guarantees

  
	
   

  	
   

  	
   

  
	
  SECTION 12.01.

  	
  Agreement To Subordinate

  	
   

  
	
  SECTION 12.02.

  	
  Liquidation, Dissolution, Bankruptcy

  	
   

  
	
  SECTION 12.03.

  	
  Default on Senior Indebtedness of 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
  Company

  	
   

  
	
  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 Events of
  Default 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 Guarantor

  	
   

  

 

 

	
  SECTION 12.15.

  	
  Reliance by Holders of Senior Indebtedness of Guarantors on
  Subordination Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 13

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01.

  	
  TIA 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

  	
   

  
	
  SECTION 13.14

  	
  Consent to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  Rule 144A/Regulation S/IAI Appendix

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  1 – Exhibit 1- Form of Initial Security

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  A – Form of Exchange Security or Private Exchange Security

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  2 – Form of Transferee Letter of Representation

  	
   

  

 

 

INDENTURE dated as of December 17, 2003,
among Sensus Metering Systems Inc., a Delaware corporation (the “Company”),
Sensus Metering Systems (Bermuda 2) Ltd., a company organized under the laws of
Bermuda (“Parent”), the SUBSIDIARY GUARANTORS (as defined below) from time to
time party hereto and U.S. Bank National Association (the “Trustee”).

 

Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company’s Initial
Securities, Exchange Securities and Private Exchange Securities (collectively,
the “Securities”):

 

Article 1

 

Definitions and Incorporation by Reference

 

SECTION 1.01                    Definitions.

 

“Acquisition” means the acquisition of the
metering systems business of Invensys plc by certain subsidiaries of Parent
pursuant to the Stock Purchase Agreement dated as of October 21, 2003, as
amended pursuant to First Amendment to Stock Purchase Agreement, by and among
IMS Meters Holdings, Inc. (renamed Sensus Metering Systems Inc. on
December 2, 2003) and the sellers named therein.

 

“Additional Assets” means (1) any property, plant or equipment used in a Related Business;
(2) the Capital Stock of a Person that becomes a Restricted Subsidiary as
a result of the acquisition of such Capital Stock by Parent, the Company or
another Restricted Subsidiary; or (3) 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
clause (2) or (3) above is primarily engaged in a Related Business.

 

“Additional Securities” means, subject to the
Company’s compliance with Section 4.03, 85/8  % Senior

 

1

 

Subordinated Notes Due 2013 issued from time
to time after the Issue Date under the terms of this Indenture (other than
pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other
than Exchange Securities or Private Exchange Securities issued pursuant to an
exchange offer for other Securities outstanding under this Indenture).

 

“Adjusted Treasury Rate” means, with respect to any redemption date, (i) the yield, under the heading
which represents the average for the immediately preceding week, appearing in
the most recently published statistical release designated “H.15(519)” or any
successor publication which is published weekly by the Board of Governors of
the Federal Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under the
caption “Treasury Constant Maturities,” for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after December 15, 2008, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the
Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on
a straight line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per year equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date, in each case calculated on
the third Business Day immediately preceding the redemption date,
plus 0.50%.

 

“Affiliate” of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person.  For
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 and 4.06 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 Parent
or of rights

 

2

 

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.

 

“Applicable Premium”
means with respect to a Security at any redemption date, the greater of
(1) 1.00% of the principal amount of such Security at such time and
(2) the excess of (A) the present value at such time of (i) the
redemption price of such Security on December 15, 2008 (such redemption price
being described in the fourth paragraph of paragraph 5 of the Securities,
exclusive of any accrued interest) plus (ii) all required remaining
scheduled interest payments due on such Security through December 15, 2008,
computed using a discount rate equal to the Adjusted Treasury Rate, over
(B) the principal amount of such Security on such redemption date.

 

“Asset Disposition” means any sale, lease (other than an operating
lease entered into in the ordinary course of business), transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
Parent or any Restricted Subsidiary, including any disposition by means of a
merger, amalgamation, consolidation or similar transaction (each referred to
for the purposes of this definition as a “disposition”), of

 

(1)          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 Parent or a
Restricted Subsidiary);

 

(2)          all or substantially all
the assets of any division or line of business of Parent or any Restricted
Subsidiary; or

 

(3)          any other assets of
Parent or any Restricted Subsidiary outside of the ordinary course of business
of the Company or such Restricted Subsidiary

 

(other than, in the case of (1), (2) and (3) above, (A) a
disposition by a Restricted Subsidiary to Parent or the Company or by Parent,
the Company or a Restricted Subsidiary to a Wholly Owned Subsidiary,
(B) for purposes of Section 4.06 only, (i) a disposition that
constitutes a Restricted Payment (or would constitute a Restricted Payment but
for the exclusions from the definitions thereof) permitted by Section 4.04
and (ii) a disposition

 

3

 

of all or substantially all the assets of Parent in accordance with
Section 5.01, (C) a disposition of assets with a Fair Market Value of
less than $2.5 million, (D) a disposition of cash or Temporary Cash
Investments, (E) the creation of a Lien (but not the sale or other
disposition of the property subject to such Lien), (F) the disposition of
inventory or obsolete or worn out equipment in the ordinary course of business,
(G) the good faith surrender or waiver of contract rights, tort claims or
statutory rights, (H) sales or grants of licenses or sublicenses to use
the patents, copyright and other intellectual property of Parent or any of the
Restricted Subsidiaries to the extent such license does not interfere with the
business of Parent or any Restricted Subsidiary and (I) any transfer or
sale of accounts receivable and related assets of the type specified in the
definition of “Qualified Receivables Transaction” to a Receivables Subsidiary
for the Fair Market Value thereof, including cash in an amount at least equal
to 75% of the book value thereof as determined in accordance with GAAP, it
being understood that, for the purposes of this clause (I), investments
received in exchange for the transfer of accounts receivable and related assets
will be deemed to constitute cash if the Receivables Subsidiary or other payor
is required to repay such investments as soon as practicable from available
cash collections less amounts required to be established as reserves pursuant
to contractual agreements with entities that are not Affiliates of Parent
entered into as part of a Qualified Receivables Transaction).

 

“Average Life” means, as of the date of determination, with respect to
any Indebtedness, the quotient obtained by dividing (1) 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 or redemption or similar payment
with respect to such Indebtedness multiplied by the amount of such payment by
(2) the sum of all such payments.

 

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

 

“Board of Directors” with respect to a Person means the Board of
Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board.

 

4

 

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

 

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

 

“Capital Stock” of any Person means any and all shares, interests
(including partnership 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:

 

(1)          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 (1) 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 50% of the total voting power of the Voting Stock of
Parent;

 

(2)          during any consecutive
two-year period, individuals who at the beginning of such period constituted
the Parent Board (together with any new directors whose election or appointment
by such Parent Board or whose nomination for election by the shareholders of
Parent was approved by a vote of a majority of the directors of Parent then
still in office who were either directors at the beginning of such period or
whose election, appointment or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Parent Board
then in office;

 

5

 

(3)          the adoption of a plan
relating to the liquidation, winding up or dissolution of Parent or the
Company;

 

(4)          the merger, amalgamation
or consolidation of Parent with or into another Person or the merger or
amalgamation of another Person with or into Parent, or the sale of all or
substantially all the assets of Parent (determined on a consolidated basis) to
another Person other than (A) a transaction in which the survivor,
continuing entity or transferee is a Person that is controlled by the Permitted
Holders or (B) a transaction following which (i) in the case of a
merger, amalgamation or consolidation transaction, holders of securities that
represented 100% of the Voting Stock of Parent immediately prior to such
transaction (or other securities into which such securities are converted as
part of such merger, amalgamation or consolidation transaction) own directly or
indirectly at least a majority of the voting power of the Voting Stock of the
surviving or continuing Person in such merger, amalgamation or consolidation
transaction immediately after such transaction and in substantially the same
proportion as before the transaction and (ii) in the case of a sale of
assets transaction, each transferee becomes an obligor in respect of the Parent
Guaranty and a Subsidiary of the transferor of such assets; or

 

(5)          the failure of Parent to
beneficially own, directly or indirectly, 100% of the Voting Stock of the
Company.

 

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

 

“Company” means the party named as such in the introductory paragraph
of 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.

 

“Commodity Price Protection Agreement” means,
with respect to any Person, any forward contract, commodity swap, commodity
option or other similar agreement or arrangement entered into to protect such
Person or its Subsidiaries
against fluctuations in commodity prices.

 

“Comparable Treasury Issue” means the United States Treasury security
selected by the Quotation Agent as

 

6

 

having a maturity comparable to the remaining term from the redemption
date to December 15, 2008, that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of a maturity most nearly equal to December 15,2008.

 

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

 

“Consolidated Coverage Ratio” as of any date of determination means the
ratio of

 

(1)                                  the
aggregate amount of EBITDA for the period of the most recent four consecutive
fiscal quarters ending prior to the date of such determination to

 

(2)                                  Consolidated
Interest Expense for such four fiscal quarters;

 

provided, however, that

 

(A)                              if Parent 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,

 

(B)                                if Parent or any
Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged
any Indebtedness since the beginning of such period or if any Indebtedness is
to be repaid, repurchased, defeased or otherwise discharged (in each case other
than Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the date
of the transaction giving rise to the need to calculate the Consolidated Coverage
Ratio, EBITDA and Consolidated Interest Expense for such period shall be
calculated

 

7

 

on a pro
forma basis as if such discharge had occurred on the first day of such
period and as if Parent 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,

 

(C)                                if since the beginning
of such period Parent or any Restricted Subsidiary shall have made any Asset
Disposition, 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 Parent or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to Parent 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 Parent and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale),

 

(D)                               if since the beginning
of such period Parent or any Restricted Subsidiary (by merger, amalgamation 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

 

(E)                                 if since the beginning
of such period any Person (that subsequently became a Restricted

 

8

 

Subsidiary or was merged or amalgamated with or into Parent or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Disposition, any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (C) or (D) above if made by
Parent 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.  Any such pro  forma
calculations may include operating expense reductions (net of associated
expenses) for such period resulting from the acquisition or other Investment
which is being given pro  forma effect that (a) would be
permitted to be reflected on pro forma financial statements pursuant to
Rule 11-02 of Regulation S-X under the Securities Act or
(b) have been realized or for which substantially all the steps necessary
for realization have been taken or, at the time of determination, are
reasonably expected to be taken within 90 days immediately following any
such acquisition or other Investment, including, but not limited to, the
execution, termination, renegotiation or modification of any contracts, the
termination of any personnel or the closing of any facility, as applicable, provided
that, in any case, such adjustments shall be calculated on an annualized basis
and such adjustments are set forth in an Officers’ Certificate signed by
Parent’s chief financial officer and another Officer which states in detail
(i) the amount of such adjustment or adjustments, (ii) that such
adjustment or adjustments are based on the reasonable good faith beliefs of the
Officers executing such Officers’ Certificate at the time of such execution and
(iii) that such adjustment or adjustments and the plan or plans related
thereto have been reviewed and approved by the Parent Board.  Any such Officers’ Certificate will be provided
to the Trustee if Parent Incurs any Indebtedness or takes any other action
under this Indenture in reliance thereon. 
If any Indebtedness bears a floating rate of

 

9

 

interest and is being given pro  forma effect, the
interest on such Indebtedness shall be calculated as if the rate in effect on
the date of determination had been the applicable rate for the entire period
(taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of
12 months).

 

If any Indebtedness is incurred under a revolving credit facility and
is being given pro  forma effect, the interest on such
Indebtedness shall be calculated based on the average daily balance of such
Indebtedness for the four fiscal quarters subject to the pro  forma
calculation to the extent that such Indebtedness was incurred solely for
working capital purposes.

 

“Consolidated Interest Expense” means, for
any period, the total interest expense of Parent and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent incurred by Parent or any Restricted Subsidiary, without
duplication:

 

(1)          interest expense
attributable to Capital Lease Obligations;

 

(2)          amortization of debt
discount;

 

(3)          capitalized interest;

 

(4)          non-cash interest
expense;

 

(5)          commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers’
acceptance financing;

 

(6)          net payments pursuant to
Hedging Obligations;

 

(7)          dividends accrued in
respect of all Preferred Stock of Parent that is Disqualified Stock and all
Preferred Stock of any Restricted Subsidiary, in each case to the extent held
by Persons other than Parent or a Wholly Owned Subsidiary (other than dividends
payable solely in Capital Stock (other than Disqualified Stock)); provided,
however, that such dividends will be multiplied by a fraction, the
numerator of which is one and the denominator of which is one minus the
effective combined tax rate of the issuer of such Preferred Stock (expressed as
a decimal)

 

10

 

for such period (as estimated by the chief
financial officer of Parent in good faith); and

 

(8)          interest accruing on any
Indebtedness of any other Person to the extent such Indebtedness is Guaranteed
by (or secured by the assets of) Parent or any Restricted Subsidiary; minus, to the extent included in such total
interest expense, and to the extent incurred by Parent or any Restricted
Subsidiary, (A) amortization or write off of debt issuance costs and
deferred financing costs and (B) interest expense attributable to
dividends in respect of all Preferred Stock of Parent that is not Disqualified
Stock pursuant to Statement of Financial Accounting Standards No. 150,
“Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity”.

 

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

 

(1)          any net income of any
Person (other than Parent) if such Person is not a Restricted Subsidiary,
except that

 

(A)                              subject to the exclusion
contained in clause (4) below, Parent’s equity in the net income of any
such Person for such period shall be included in such Consolidated Net Income
up to the aggregate amount of cash actually distributed by such Person during
such period to Parent 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 (3)
below); and

 

(B)                                Parent’s equity in a
net loss of any such Person for such period shall be included in determining
such Consolidated Net Income;

 

(2)          any net income (or loss)
of any Person acquired by Parent or a Subsidiary in a pooling of interests
transaction for any period prior to the date of such acquisition;

 

11

 

(3)          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 Parent (but, in the case of any Foreign Subsidiary, only
to the extent cash equal to such net income (or a portion thereof) for such
period is not readily procurable to Parent from such Foreign Subsidiary
pursuant to intercompany loans, repurchases of Capital Stock or otherwise),
except that

 

(A)                              subject to the exclusion
contained in  clause (4) below,
Parent’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 during such
period to Parent 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)                                Parent’s equity in a
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;

 

(4)          any gain (or loss)
realized upon the sale or other disposition of any assets of Parent, its
consolidated Subsidiaries or any other Person (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;

 

(5)          extraordinary gains or
losses;

 

(6)          the cumulative effect of
a change in accounting principles;

 

(7)          any non-recurring fees,
charges or other expenses (including bonus and retention payments but excluding
non-cash compensation charges) made or incurred in connection with the
Acquisition or the financing thereof;

 

12

 

(8)          Systems/Organizational
Establishment Expenses; and

 

(9)          interest expense
attributable to dividends in respect of all Preferred Stock of Parent that is
not Disqualified Stock pursuant to Statement of Financial Accounting Standards
No. 150, “Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity”; in each case, for such
period.  Notwithstanding the foregoing,
for the purpose of Section 4.04 only, there shall be excluded from
Consolidated Net Income any repurchases, repayments or redemptions of
Investments, proceeds realized on the sale of Investments or return of capital
to Parent or a Restricted Subsidiary to the extent such repurchases,
repayments, redemptions, proceeds or returns increase the amount of Restricted
Payments permitted under such Section pursuant to Section 4.04(a)(3)(D).

 

“Credit Agreement” means the Credit Agreement to be entered into on the
Issue Date by and among Parent, the Company, Sensus Metering Systems (LuxCo 2)
s.a.r.l., the lenders referred to therein, Credit Suisse First Boston, as
Administrative Agent, European Administrative Agent, U.S. Collateral Agent and
European Collateral Agent, and Goldman Sachs Credit Partners L.P., as
Syndication Agent, together with the related documents thereto (including the
term loan facilities and revolving loan facilities thereunder, any guarantees
and security documents), as amended, extended, renewed, restated, replaced,
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 Refinance or otherwise replace, 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.

 

“Currency Agreement” means, with respect to any Person, any foreign
exchange contract, currency swap agreement, futures contract, options contract,
synthetic cap or other similar agreement with respect to currency values
designed to protect such Person or its Subsidiaries against fluctuations in
currency exchanges.

 

13

 

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

 

“Designated Senior Indebtedness”, with
respect to a Person, means (1) the Bank Indebtedness and (2) any
other Senior Indebtedness of such Person 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
$25.0 million and is specifically designated by such Person in the
instrument evidencing or governing such Senior Indebtedness as “Designated
Senior Indebtedness” for purposes of this Indenture.

 

“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 at the option of the holder) or
upon the happening of any event:

 

(1)          matures or is
mandatorily redeemable (other than redeemable only for Capital Stock of such
Person which is not itself Disqualified Stock) pursuant to a sinking fund
obligation or otherwise;

 

(2)          is convertible or
exchangeable at the option of the holder for Indebtedness or Disqualified
Stock; or

 

(3)          is mandatorily
redeemable or must be purchased upon the occurrence of certain events or
otherwise, in whole or in part, in each case on or prior to the 91st day
after the Stated Maturity of the Securities; provided, however,
that any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or
“change of control” occurring prior to the first anniversary of the Stated
Maturity of the Securities shall not constitute Disqualified Stock if
(A) the “asset sale” or “change of control” provisions applicable to such
Capital Stock are not more favorable to the holders of such Capital Stock than
the terms applicable to the Securities in Sections 4.06 and 4.09 of this
Indenture and (B) any such requirement only becomes operative after
compliance with

 

14

 

such terms applicable to the Securities, including the purchase of any
Securities tendered pursuant thereto.

 

The amount of any Disqualified Stock that does not have a fixed
redemption, repayment or repurchase price will be calculated in accordance with
the terms of such Disqualified Stock as if such Disqualified Stock were
redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to the Indenture; provided,
however, that if such Disqualified Stock could not be required to be
redeemed, repaid or repurchased at the time of such determination, the
redemption, repayment or repurchase price will be the book value of such
Disqualified Stock as reflected in the most recent financial statements of such
Person.

 

“EBITDA” for any period means the sum of Consolidated Net Income, plus
the following, without duplication, to the extent deducted in calculating such
Consolidated Net Income:

 

(1)          all income tax expense
of Parent and its consolidated Restricted Subsidiaries;

 

(2)          Consolidated Interest
Expense;

 

(3)          depreciation and
amortization expense of Parent and its consolidated Restricted Subsidiaries (including any increased expense or depreciation or
amortization charges resulting from purchase accounting adjustments or inventory
write-ups with respect to acquisitions and amortization charges or write-off of
deferred financing costs and debt issuance costs);

 

(4)          all other non-cash
charges of Parent and its consolidated Restricted Subsidiaries (minus, with
respect to any such non-cash charge occurring after the Issue Date that was
previously added in a prior period to Consolidated Net Income to calculate
EBITDA and that represents an accrual of or reserve for cash expenditures in
any future period, any payments made during such period);

 

(5)          any non-capitalized
costs incurred in connection with financings, acquisitions or dispositions
(including financing and refinancing fees and any premium or penalty paid in
connection with redeeming or retiring Indebtedness prior to its Stated Maturity
thereof pursuant to the agreements governing such Indebtedness);

 

15

 

(6)          any restructuring costs
and other similar costs that are (A) added to net income to calculate
“Adjusted EBITDA” as set forth in the Offering Circular for the twelve-month
period ended September 30, 2003 or set forth in the section of the
Offering Circular entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity and Capital Resources—After the
Acquisition” with respect to the second half of fiscal year 2004 and fiscal
year 2005 or (B) incurred in connection with acquisitions consummated
after the Issue Date; and

 

(7)          expenses attributable to
Incentive Arrangements; 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, including by
reason of minority interests) that the net income or loss of such Restricted
Subsidiary was included in calculating Consolidated Net Income and
(A) only if a corresponding amount would be permitted at the date of
determination to be dividended to Parent 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 or (B) in the case of
any Foreign Subsidiary, only if a corresponding amount of cash is readily
procurable to Parent from such Foreign Subsidiary pursuant to intercompany
loans, repurchases of Capital Stock or otherwise, provided that to the
extent cash of such Foreign Subsidiary provided the basis for including the net
income of such Foreign Subsidiary in Consolidated Net Income pursuant to
clause (3) of the definition of “Consolidated Net Income,” such cash shall
not be taken into account for the purposes of determining readily procurable
cash under this clause (B).

 

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

 

“Equity Offering” means (i) an underwritten primary public
offering of common stock of the Company or Parent pursuant to an effective
registration statement under the Securities Act or (ii) any private
placement of common

 

16

 

stock of
the Company or Parent to any Person other than issuances upon exercise of
options by employees of Parent or any of the Restricted Subsidiaries.

 

“Fair Market Value” means, with respect to
any property or asset, the price which could be negotiated in an arm’s-length,
free market transaction for cash between a willing seller and a willing and
able buyer, neither of whom is under undue pressure or compulsion to complete
the transaction.  Fair Market Value will
be determined in good faith by the Parent Board, whose determination will be
conclusive.

 

“Foreign Subsidiary” means any Restricted Subsidiary of Parent that
(1) is not organized under the laws of the United States of America or any
State thereof or the District of Columbia or (2) is organized under the
laws of the United States of America or any State thereof or the District of
Columbia whose only assets, other than immaterial assets, consist of shares of
Capital Stock of a Person described in clause (1) above.

 

“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

 

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

 

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

 

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

 

(4)          the rules and
regulations of the SEC governing the inclusion of financial statements
(including pro  forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act,
including opinions and pronouncements in staff accounting bulletins and similar
written statements from the accounting staff of the SEC.  All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP.

 

17

 

“Guarantee” means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person

 

(1)          to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness 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

 

(2)          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.

 

“Guarantor” means any of
Parent and the Subsidiary Guarantors.

 

“Guaranty” means any of the Parent Guaranty
and the Subsidiary Guarantees.

 

“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, Currency Agreement or Commodity
Price Protection Agreement.

 

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

 

“Incentive Arrangements” means any
(i) earn-out agreements, (ii) stock appreciation rights,
(iii) ”phantom” stock plans, (iv) employment agreements,
(v) non-competition agreements and (vi)  incentive and bonus plans entered
into

 

18

 

by Parent or any Restricted Subsidiary for
the benefit of, and in order to retain, executives, officers or employees of
Persons or businesses in connection with the acquisition of the Capital Stock
of such Persons or the acquisition of such businesses by Parent or such
Restricted Subsidiary.

 

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

 

Solely for purposes of determining compliance with Section 4.03:

 

(1)          amortization of debt
discount or the accretion of principal with respect to a non-interest bearing
or other discount security;

 

(2)          the payment of regularly
scheduled interest in the form of additional Indebtedness of the same
instrument or the payment of regularly scheduled dividends on Capital Stock in
the form of additional Capital Stock of the same class and with the same terms;
and

 

(3)          the obligation to pay a
premium in respect of Indebtedness arising in connection with the issuance of a
notice of redemption or making of a mandatory offer to purchase such
Indebtedness

 

will not be deemed to be the Incurrence of Indebtedness.

 

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

 

(1)          the principal 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,
including, in each case, any premium on such indebtedness to the extent such
premium has become due and payable;

 

(2)          all Capital Lease
Obligations of such Person;

 

19

 

(3)          all Obligations of such
Person issued or assumed as the deferred purchase price of property, which
purchase price is due more than 90 days after the purchase of such
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);

 

(4)          all obligations of such
Person for the reimbursement of any obligor on any letter of credit, bankers’
acceptance or similar credit transaction (other than obligations with respect
to letters of credit securing obligations (other than obligations described in
clauses (1) through (3) 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);

 

(5)          the amount of all
obligations of such Person with respect to the redemption, repayment or other
repurchase of any Disqualified Stock of such Person or of any Preferred Stock
of any Subsidiary of such Person or that are determined by the value of such
Disqualified Stock or Preferred Stock, as applicable,  the principal amount of such Disqualified Stock or Preferred
Stock, as applicable, to be determined in accordance with this Indenture (but
excluding, in each case, accrued dividends);

 

(6)          all obligations of the
type referred to in clauses (1) through (5) 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;

 

(7)          all obligations of the
type referred to in clauses (1) through (6) 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 and the amount
of the obligation so secured; and

 

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

 

20

 

Obligations to be equal at any
time to the termination value of such agreement or arrangement giving rise to
such Obligations that would be payable by such Person at any time).

 

Notwithstanding the foregoing, in connection with the purchase by
Parent or any Restricted Subsidiary of any business, the term “Indebtedness”
will exclude post-closing payment adjustments to which the seller may become
entitled to the extent such payment is determined by a final closing balance
sheet or such payment depends on the performance of such business after the
closing (including pursuant to an earn-out agreement or any stock appreciation
rights).

 

The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all obligations as described above; provided,
however, that in the case of Indebtedness sold at a discount, the amount
of such Indebtedness at any time will be the accreted value thereof at such
time.

 

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

 

“Independent Qualified Party” means an
investment banking firm, accounting firm or appraisal firm of national
standing; provided, however, that such firm is not an Affiliate of the Company.

 

“Interest Rate Agreement”
means, with respect to any Person, any interest rate swap agreement, interest rate cap agreement or other
financial agreement or arrangement with respect to exposure of such Person or
its Subsidiaries to 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 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 for
value of Capital Stock, Indebtedness or other similar instruments issued by
such Person.  If Parent or any Restricted Subsidiary issues, sells or otherwise
disposes of any Capital Stock of a Person that is a Restricted Subsidiary

 

21

 

such that,
after giving effect thereto, such Person is no longer a Restricted Subsidiary,
any Investment by Parent or any Restricted Subsidiary in such Person remaining
after giving effect thereto will be deemed to be a new Investment at such
time.  The acquisition by Parent or any
Restricted Subsidiary of a Person that holds an Investment in a third Person
will be deemed to be an Investment by Parent or such Restricted Subsidiary in
such third Person at such time.  Except
as otherwise provided for herein, the amount of an Investment shall be its Fair
Market Value at the time the Investment is made and without giving effect to
subsequent changes in value.

 

For purposes of the definition of “Unrestricted Subsidiary”, the definition of “Restricted Payment” and
Section 4.04.

 

(1)          “Investment” shall
include the portion (proportionate to Parent’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, Parent shall be deemed to continue to
have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount
(if positive) equal to (A) Parent’s “Investment” in such Subsidiary at the
time of such redesignation less (B) the portion (proportionate to Parent’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

 

(2)          any property transferred
to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value
at the time of such transfer.

 

“Issue Date” means December 17, 2003.

 

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

 

“Lien” means 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).

 

22

 

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

 

“Net Available Cash” from an
Asset Disposition means cash payments received therefrom (including any cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise and proceeds from the sale or other
disposition of any securities received as consideration, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations
relating to such properties or assets or received in any other non-cash form),
in each case net of

 

(1)          all legal, title and
recording tax expenses, commissions and other fees and expenses incurred, and
all Federal, state, provincial, foreign and local taxes required to be accrued
as a liability under GAAP, as a consequence of such Asset Disposition;

 

(2)          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;

 

(3)          all distributions and
other payments required to be made to minority interest holders in Restricted
Subsidiaries as a result of such Asset Disposition;

 

(4)          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 Parent or any Restricted Subsidiary after
such Asset Disposition; and

 

(5)          any portion of the
purchase price from an Asset Disposition placed in escrow, whether as a reserve
for adjustment of the purchase price, for satisfaction of indemnities in
respect of such Asset Disposition or otherwise in connection with that Asset
Disposition; provided, however, that upon the termination of that
escrow, Net Available Cash will be increased by any portion

 

23

 

of funds in the escrow that are released to
the Company or any Restricted Subsidiary.

 

“Net Cash Proceeds”, with respect to any issuance or sale of Capital
Stock or Indebtedness, 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,
indemnifications, reimbursements, and other amounts payable pursuant to the
documentation governing such Indebtedness.

 

“Offering Circular” means the final offering circular dated as of December 11, 2003, used in connection
with the offering of the Securities.

 

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

 

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

 

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

 

“Parent” means Sensus Metering Systems
(Bermuda 2) Ltd., a company organized under the laws of Bermuda, and its successors.

 

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

 

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

 

“Permitted Acquisition Payments” means, without duplication,
the following payments and distributions: 
(i) payments to Invensys plc and certain of its Subsidiaries

 

24

 

on the
Issue Date in connection with the Acquisition, (ii) payments to Invensys
plc and certain of its Subsidiaries relating to any purchase price adjustment
in connection with the Acquisition, provided such payments are on the terms and
conditions set forth in the definitive documentation for the Acquisition as in
effect on the Issue Date and (iii) the payment of transaction fees and
expenses relating to the Acquisition not in excess of $35.0 million in the
aggregate.

 

“Permitted Holders” means the Resolute Fund
L.P., GS Capital Partners 2000, L.P. and their respective Affiliates.  Except for a Permitted Holder
specifically identified by name, in determining whether Voting Stock is owned by a Permitted Holder, only Voting
Stock acquired by a Permitted Holder in its described capacity will be treated
as “beneficially owned” by such Permitted Holder.

 

“Permitted Investment” means an Investment by Parent or any Restricted Subsidiary in

 

(1)          Parent, 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;

 

(2)          another Person if as a
result of such Investment, such other Person is merged, amalgamated or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, Parent or a Restricted Subsidiary; provided, however,
that such Person’s primary business is a Related Business;

 

(3)          cash and Temporary Cash
Investments;

 

(4)          receivables owing to
Parent or any Restricted Subsidiary if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; provided, however, that such trade terms may include
such concessionary trade terms as Parent or any such Restricted Subsidiary
deems reasonable under the circumstances;

 

(5)          payroll, travel,
commission and similar advances to cover matters that are expected at the time
of such advances ultimately to be treated as expenses for

 

25

 

accounting purposes and that are made in the
ordinary course of business;

 

(6)          loans or advances to
employees made in the ordinary course of business consistent with past
practices of Parent or such Restricted Subsidiary;

 

(7)          prepayments and credits
or advances to customers or suppliers in the ordinary course of business;

 

(8)          stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to Parent or any Restricted Subsidiary or in satisfaction of
judgments;

 

(9)          any Person to the extent
such Investment represents the non-cash portion of the consideration received
for (a) an Asset Disposition as permitted pursuant to Section 4.06 or
(b) a disposition of assets not constituting an Asset Disposition;

 

(10)    any Person where such
Investment was acquired by Parent or any of the Restricted Subsidiaries
(a) in exchange for any other Investment or accounts receivable held by
Parent or any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer of such
other Investment or accounts receivable or (b) as a result of a
foreclosure by Parent or any of the Restricted Subsidiaries with respect to any
secured Investment or other transfer of title with respect to any secured
Investment in default;

 

(11)    any Person to the extent such
Investments consist of prepaid expenses, negotiable instruments held for
collection and lease, utility and workers’ compensation, performance and other
similar deposits made in the ordinary course of business by Parent or any
Restricted Subsidiary;

 

(12)    any Person to the extent such
Investments consist of Hedging Obligations otherwise permitted under
Section 4.03;

 

(13)    any Person to the extent such
Investment existed on the Issue Date, and any extension, modification or
renewal of any such Investments existing on the Issue Date, but only to the
extent not involving additional advances, contributions or other Investments of
cash or other assets

 

26

 

or other increases thereof (other than as a
result of the accrual or accretion of interest or original issue discount or
the issuance of pay-in-kind securities, in each case, pursuant to the terms of
such Investment as in effect on the Issue Date);

 

(14)    any Investment by Parent or a
Restricted Subsidiary in a Receivables Subsidiary, or any Investment by a
Receivables Subsidiary in another Person, in each case in connection with a
Qualified Receivables Transaction; provided, however, that such
Investment is in the form of a purchase money note, equity or residual interest
or limited liability company interest; and

 

(15)    Persons to the extent such
Investments, when taken together with all other Investments made pursuant to
this clause (15) outstanding on the date such Investment is made, do not
exceed the greater of (a) $25.0 million and (b) 3% of
consolidated Total Assets of Parent and the Restricted Subsidiaries.

 

“Person” means any individual, corporation, partnership, company,
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.

 

“Qualified Receivables Transaction” means any
transaction or series of transactions entered into by Parent or any Restricted
Subsidiary pursuant to which Parent or any Restricted  Subsidiary sells, conveys or otherwise transfers to (i) a Receivables
Subsidiary (in the case of a transfer by Parent or any Restricted Subsidiary)
and (ii) any other Person (in the case of a transfer by a Receivables
Subsidiary), or grants a security interest in, any accounts

 

27

 

receivable
(whether now existing or arising in the future) of Parent or any Restricted
Subsidiary, and any assets related thereto, including all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, proceeds of such accounts receivable
and other assets (including contract rights) which are customarily transferred
or in respect of which security interests are customarily granted in connection
with asset securitization transactions involving accounts receivable.

 

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

 

“Rating Agency” means Standard & Poor’s and Moody’s or if Standard
& Poor’s or Moody’s or both shall not make a rating on the Securities
publicly available, a nationally recognized statistical rating agency or
agencies, as the case may be, selected by the Company (as certified by a
resolution of the Parent Board) which shall be substituted for
Standard & Poor’s or Moody’s or both, as the case may be.

 

“Receivables Subsidiary” means a Subsidiary
of Parent which engages in no activities other than in connection with the financing of accounts receivable or
related assets (including contract rights) and which is designated by the
Parent Board (as provided below) as a Receivables Subsidiary (a) no
portion of the Indebtedness or any other Obligations (contingent or otherwise)
of which (i) is Guaranteed by Parent or any Restricted Subsidiary (but
excluding customary representations, warranties, covenants and indemnities
entered into in connection with a Qualified Receivables Transaction),
(ii) is recourse to or obligates Parent or any Restricted Subsidiary in
any way other than pursuant to customary representations, warranties, covenants
and indemnities entered into in connection with a Qualified Receivables
Transaction or (iii) subjects any property or asset (including contract
rights) of Parent or any Restricted Subsidiary (other than accounts receivable
and related assets as provided in the definition of “Qualified Receivables Transaction”), directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
customary representations, warranties, covenants and indemnities entered into
in connection with a Qualified Receivables Transaction, (b) with which
neither Parent nor any

 

28

 

Restricted
Subsidiary has any material contract, agreement, arrangement or understanding
other than on terms no less favorable to Parent or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of Parent, other than customary fees payable in connection with
servicing accounts receivable and (c) with which neither Parent nor any
Restricted Subsidiary has any obligation to maintain or preserve such
Subsidiary’s financial condition or cause such Subsidiary to achieve certain
levels of operating results. Any such designation by the Parent Board will be
evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Parent Board giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing conditions.

 

“Reference Treasury Dealer” means Credit Suisse First Boston LLC and
its successors and assigns, Goldman, Sachs & Co. and its successors
and assigns and one other nationally recognized investment banking firm
selected by the Company that is a primary U.S. Government securities dealer.

 

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

 

“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 Parent 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:

 

29

 

(1)          such Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being Refinanced;

 

(2)          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;

 

(3)          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 (plus fees and expenses, including
any premium and defeasance costs) under the Indebtedness being Refinanced; and

 

(4)          if the Indebtedness
being Refinanced is subordinated in right of payment to the Securities or a
Guaranty, such Refinancing Indebtedness is subordinated in right of payment to
the Securities or such Guaranty at least to the same extent as the Indebtedness
being Refinanced;

 

provided  further, however, that
Refinancing Indebtedness shall not include (A) Indebtedness of a
Subsidiary of Parent that Refinances Indebtedness of Parent or Indebtedness of
a Subsidiary of the Company that Refinances Indebtedness of the Company or
(B) Indebtedness of Parent or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.

 

“Registration Rights Agreement” means the Registration Rights Agreement
dated as of the Issue Date among Parent, the Company, the Subsidiary
Guarantors, Credit Suisse First Boston LLC and Goldman, Sachs & Co.

 

“Related Business” means any business in which Parent or any of the
Restricted Subsidiaries was engaged on the Issue Date and any business similar,
related, ancillary or complementary to such business.

 

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

 

30

 

“Restricted Payment” with respect to any Person means

 

(1)          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,
amalgamation or consolidation involving such Person) or similar payment to the
direct or indirect holders of its Capital Stock (other than (A) dividends
or distributions payable solely in its Capital Stock (other than Disqualified
Stock), (B) dividends or distributions payable solely to Parent or a
Restricted Subsidiary and (C) 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));

 

(2)          the purchase, redemption
or other acquisition or retirement for value of any Capital Stock of Parent
held by any Person (other than by a Restricted Subsidiary) or of any Capital
Stock of a Restricted Subsidiary held by any Affiliate of Parent (other than by
a Restricted Subsidiary), including in connection with any merger, amalgamation
or consolidation and including the exercise of any option to exchange any
Capital Stock (other than into Capital Stock of Parent that is not Disqualified
Stock);

 

(3)          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 of Parent or any Subsidiary
Guarantor (other than (A) from Parent or a Restricted Subsidiary or
(B) the purchase, repurchase, redemption, defeasance 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 such purchase, repurchase, redemption,
defeasance or other acquisition); or

 

(4)          the making of any
Investment (other than a Permitted Investment) in any Person.

 

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

 

31

 

“Restricted U.S. Subsidiary” means each
Restricted Subsidiary of Parent,
other than the Company, that is organized under the laws of the United States
of America or any State thereof or the District of Columbia.

 

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

 

“Revolving Credit Facility Borrower” means
any Person that is a borrower  under
any Revolving Credit Facility, other than the Company or any Guarantor.

 

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

 

“Secured Indebtedness” means any Indebtedness
of Parent, the Company or
a Subsidiary Guarantor secured by a Lien.

 

“Securities” has the meaning set forth in the introduction to this
Indenture.

 

“Securities Act” means the U.S. Securities Act of 1933.

 

“Senior Indebtedness” means with
respect to any Person:

 

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

 

(2)          all other Obligations of
such Person (including interest accruing on or after the filing of any petition
in bankruptcy or for reorganization relating to such Person whether or not
post-filing interest is allowed in such proceeding) in respect of Indebtedness
described in clause (1) above, unless, in the case of clauses (1) and
(2), in the instrument creating or evidencing the same or pursuant to which the
same is outstanding it is provided that such Indebtedness or other obligations
are subordinate or pari  passu  in
right of payment to the Securities or
the Guaranty of such Person, as the case may be; provided, however,
that Senior Indebtedness shall not include:

 

32

 

(A)                              any obligation of such
Person to Parent or any Subsidiary;

 

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

 

(C)                                any accounts payable or
other liability to trade creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such liabilities);

 

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

 

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

 

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

 

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

 

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

 

“Stated Maturity” means, with respect to any 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

 

33

 

of the holder thereof upon the
happening of any contingency unless such contingency has occurred).

 

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

 

“Subsidiary” means, with respect to any Person, any corporation,
company, association, partnership or other business entity of which more than
50% of the total voting power of shares of Voting Stock is at the time owned or
controlled, directly or indirectly, by (1) such Person, (2) such
Person and one or more Subsidiaries of such Person or (3) one or more
Subsidiaries of such Person.

 

“Subsidiary
Guarantor” means each Subsidiary of the Company that executes this Indenture as
a guarantor on the Issue Date and each other Subsidiary of Parent that thereafter
guarantees the Securities pursuant to the terms of this Indenture.

 

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

 

“Systems/Organizational Establishment
Expenses” means the aggregate of all expenditures (whether paid in cash or
accrued as liabilities) by Parent and
the Restricted Subsidiaries in establishing financial, information technology
and other similar systems of Parent and the Restricted Subsidiaries, including
costs of the transition and integration of any such systems acquired in the
Acquisition, as a direct result of the establishment of the business acquired
in the Acquisition as a standalone business following the Acquisition.

 

“Temporary Cash Investments” means any of the following:

 

(1)          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;

 

34

 

(2)          investments in demand
and time deposit accounts, certificates of deposit and money market deposits
maturing within 270 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 $50.0 million (or the foreign
currency equivalent thereof) and has outstanding debt which 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;

 

(3)          repurchase obligations
with a term of not more than 30 days for underlying securities of the
types described in clause (1) above entered into with a bank meeting the
qualifications described in clause (2) above;

 

(4)          investments in
commercial paper, maturing not more than 270 days after the date of
acquisition, issued by a corporation (other than an Affiliate of Parent)
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 or “A-1” (or higher) according to Standard and Poor’s;

 

(5)          investments in
securities with maturities of one year 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 or “A” by
Moody’s;

 

(6)          investments in money market funds that invest substantially all their assets in securities of the types described in
clauses (1) through (5) above; and

 

(7)          solely in respect of the ordinary course cash management activities of
the Foreign Subsidiaries, equivalents of the investments described in
clause (1) above to the extent
guaranteed by any member state of the European Union or the country in which
the Foreign Subsidiary operates and equivalents of the investments described in

 

35

 

clause (2) above issued,
accepted or offered by (a) the local office of any commercial bank meeting
the requirements of clause (4) above in the jurisdiction of organization
of the applicable Foreign Subsidiary or (b) the local office of any
commercial bank organized under the laws of the jurisdiction of organization of
the applicable Foreign Subsidiary which commercial bank (1) has combined
capital and surplus and undivided profits of not less than $250.0 million
and (2) a long-term rating for Dollar-denominated obligations of “A-1” (or
higher) according to Standard & Poor’s or “P-1” (or higher) according
to Moody’s.

 

“Term Loan Facility” means each of 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.

 

“Term Loan Borrower” means any Person that is
a borrower under any Term Loan Facility, other than the
Company or any Guarantor.

 

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

 

“Total Assets” with respect to any Person,
means the total assets of such Person, determined in accordance with GAAP, as
set forth on such Person’s
most recent balance sheet as of a date not earlier than 30 days prior to
the time such determination is being made.

 

“Trustee” means the party named as such in the introductory paragraph of 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:

 

(1)          any Subsidiary of
Parent, other than the Company, that at the time of determination shall be
designated an 

 

36

 

Unrestricted Subsidiary by the Parent Board
in the manner provided below; and

 

(2)          any Subsidiary of an
Unrestricted Subsidiary.

 

The Parent Board may designate any Subsidiary of Parent (including any
newly acquired or newly formed Subsidiary, but excluding the Company) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock or Indebtedness of, or holds any Lien on any property of,
Parent or any other Subsidiary of Parent that is not a Subsidiary of the Subsidiary
to be so designated; provided, however, that either (A) the
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 Parent Board may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after
giving effect to such designation (A) the Company could Incur $1.00 of
additional Indebtedness under Section 4.03(a) and (B) no Default
shall have occurred and be continuing. 
Any such designation by the Parent Board shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the resolution of the
Parent Board giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the foregoing provisions.

 

“U.S.
Dollar Equivalent” means with respect to any monetary
amount in a currency other than U.S. dollars, at any time for determination
thereof, the amount of U.S. dollars obtained by converting such foreign
currency involved in such computation into U.S. dollars at the spot rate for
the purchase of U.S. dollars with the applicable foreign currency as published
in The Wall Street Journal
in the “Exchange Rates” column under the heading “Currency Trading” on the date that is two Business Days prior to
such determination.

 

Except as described in Section 4.03, whenever it is necessary to
determine whether Parent or any Restricted Subsidiary has complied with any
covenant in this Indenture or a Default has occurred and an amount is expressed in a currency
other than U.S. dollars, such amount will be treated as the U.S. Dollar
Equivalent determined as of the date such amount is initially determined in
such currency.

 

37

 

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

 

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

 

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

 

38

 

SECTION 1.02                    Other Definitions.

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
  “Affiliate Transaction”

  	
   

  	
  4.07(a)

  
	
  “Appendix”

  	
   

  	
  2.01

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	
  “Blockage Notice”

  	
   

  	
  10.03

  
	
  “Change of Control Offer”

  	
   

  	
  4.09(b)

  
	
  “covenant defeasance option”

  	
   

  	
  8.01(b)

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “legal defeasance option”

  	
   

  	
  8.01(b)

  
	
  “Offer”

  	
   

  	
  4.06(b)

  
	
  “Notice of Default”

  	
   

  	
  6.01

  
	
  “Offer Amount”

  	
   

  	
  4.06(c)(2)

  
	
  “Offer Period”

  	
   

  	
  4.06(c)(2)

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Blockage Period”

  	
   

  	
  10.03

  
	
  “Payment Default”

  	
   

  	
  10.03

  
	
  “Purchase Date”

  	
   

  	
  4.06(c)(1)

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Successor Entity”

  	
   

  	
  5.01(a)(1)

  

 

SECTION 1.03                    Incorporation by Reference of
TIA.  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, the Parent Guaranty  and the Subsidiary Guarantees;

 

“indenture security
holder” means a Securityholder;

 

“indenture to be qualified”
means this Indenture;

 

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

 

“obligor” on the indenture
securities means the Company, Parent, each Subsidiary Guarantor and any other
obligor on the indenture securities.

 

39

 

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

 

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

 

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

 

(10)    all references to the date the
Securities were originally issued shall refer to the Issue Date.

 

40

 

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/IAI 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.  An Officer shall sign the Securities for the
Company by manual or facsimile signature.

 

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

 

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 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

 

41

 

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 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
Wholly Owned Subsidiary incorporated or organized within The United States of
America may act as Paying Agent, Registrar, co-registrar or transfer agent.

 

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

 

42

 

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

 

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

 

SECTION 2.07                    Replacement Securities.  If a mutilated Security is surrendered to
the Registrar or if the Holder of a Security claims that the Security has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met 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.

 

43

 

Every replacement Security is an additional Obligation of the Company.

 

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

 

If a Security is replaced pursuant to Section 2.07, it ceases to
be outstanding unless the
Trustee and the Company receive proof satisfactory to them that the replaced Security
is held by a 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 pursuant to the terms of
this Indenture,  then on and
after that date such Securities (or portions thereof) cease to be outstanding
and interest on them ceases to accrue.

 

SECTION 2.09                    Temporary Securities.  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 2.10                    Cancellation.  The Company at any time may deliver
Securities to the Trustee for cancellation. 
The Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment.  The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act)

 

44

 

all Securities surrendered for registration
of transfer, exchange, payment or cancellation and deliver a certificate of
such destruction to the Company unless the Company directs the Trustee to
deliver canceled Securities to the Company. 
The Company may not issue new Securities to replace Securities it has
redeemed, paid or delivered to the Trustee for cancellation.

 

SECTION 2.11                    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.

 

SECTION 2.12                    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.

 

SECTION 2.13                    Issuance of Additional
Securities.  The
Company shall be entitled, subject to its compliance with Section 4.03, to
issue Additional Securities under this Indenture which shall have identical
terms as the Initial Securities issued on the Issue Date, other than with
respect to the date of issuance and issue price.  The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor shall be treated as a single class for all purposes under
this Indenture.

 

With respect to any Additional Securities, the Company shall set forth
in a resolution of the Board of Directors and an Officers’ Certificate, a copy
of each

 

45

 

which shall be delivered to the
Trustee, the following
information:

 

(1)          the aggregate principal
amount of such Additional Securities to be authenticated and delivered pursuant
to this Indenture;

 

(2)          the issue price, the
issue date and the CUSIP number of such Additional Securities; and

 

(3)          whether such Additional
Securities shall be Transfer Restricted Securities and issued in the form of
Initial Securities as set forth in the Appendix to this Indenture or shall be
issued in the form of Exchange Securities as set forth in Exhibit A.

 

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 not less than 30 nor more than 
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 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

 

46

 

portions of them the Trustee selects shall be
in principal 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 of redemption of
Securities, the Trustee, at the Company’s request made at least 45 days before
such date of redemption (unless a shorter notice shall be agreed to by the
Trustee in writing) 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

 

(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

 

47

 

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 (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment 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 cancellation.

 

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.

 

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.

 

48

 

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.  Whether or not Parent is subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, Parent
shall file with the SEC (subject to the next sentence) and provide the Trustee
and Securityholders with such annual 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 reports to be so filed and provided
at the times specified for the filings of such reports under such Sections and
containing all the information, audit reports and exhibits required for such
reports.  If at any time Parent is not
subject to the periodic reporting requirements of the Exchange Act for any
reason, Parent will nevertheless continue filing the reports specified in the
preceding sentence with the SEC within the time periods required unless the SEC
will not accept such a filing.  Parent
agrees that it will not take any action for the purpose of causing the SEC not
to accept any such filings.  If,
notwithstanding the foregoing, the SEC will not accept such filings for any
reason, Parent will post the reports specified in the preceding sentence on its
website within the time periods that would apply if Parent were required to
file those reports with the SEC. 
Notwithstanding the foregoing, Parent may satisfy such requirements
prior to the effectiveness of the Exchange Offer Registration Statement or the
Shelf Registration Statement (each as defined in the Registration Rights
Agreement) by filing with the SEC the Exchange Offer Registration Statement or
Shelf Registration Statement, to the extent that any such Registration
Statement contains substantially the same information as would be required to
be filed by Parent if it were subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, and by providing the Trustee and
Securityholders with such Registration Statement (and any amendments thereto)
promptly following the filing thereof.

 

The quarterly and annual financial information required by the
preceding paragraph will include a reasonably detailed presentation, either on
the face of the financial statements or in the footnotes thereto, and in “Management’s
Discussion and Analysis of Financial

 

49

 

Condition and Results of Operations”,
of the financial condition and
results of operations of Parent and the Restricted Subsidiaries separate from
the financial condition and results of operations of the Unrestricted
Subsidiaries, if any.

 

In addition, Parent will furnish to the Holders of the Securities and
to prospective investors, upon the requests of such Holders, any information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as
the Securities are not freely transferable under the Securities Act.

 

SECTION 4.03                    Limitation on Indebtedness.  (a)  Parent shall not, and shall
not permit any Restricted Subsidiary to, Incur, directly or indirectly, any
Indebtedness; provided, however, that Parent, the Company and the
Subsidiary Guarantors shall be entitled to Incur Indebtedness if, on the date
of such Incurrence and after giving effect thereto on a pro  forma
basis, the Consolidated Coverage Ratio exceeds 2.0 to 1.

 

(b)                                      Notwithstanding
the foregoing paragraph (a), Parent and the Restricted Subsidiaries shall
be entitled to Incur any or all of the following Indebtedness:

 

(1)          Indebtedness Incurred by
Parent, the Company, any Subsidiary Guarantor or any Revolving Credit Facility
Borrower pursuant to any Revolving Credit Facility; 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) $85 million and (B) the sum of
(i) 65% of the book value of the consolidated inventory of Parent and its
Restricted Subsidiaries and (ii) 85% of the book value of the consolidated
accounts receivable of Parent and its Restricted Subsidiaries; provided
further, however, that the aggregate principal amount of all
Indebtedness Incurred pursuant to this clause (1) by the Revolving Credit
Facility Borrowers, when added together with the amount of Indebtedness
previously Incurred by such Persons pursuant to this clause (1) and then
outstanding, does not exceed $35 million;

 

(2)          Indebtedness Incurred by
Parent, the Company, any Subsidiary Guarantor or any Term Loan Borrower
pursuant to any Term Loan Facility; provided, however, that,
after

 

50

 

giving effect to any such Incurrence, the
aggregate principal amount of all Indebtedness Incurred under this
clause (2) and then outstanding does not exceed $230 million less the
sum of all permanent principal payments actually made after the Issue Date with
respect to such Indebtedness pursuant to Section 4.06(a)(3)(A); provided
further, however, that the aggregate principal amount of all
Indebtedness Incurred pursuant to this clause (2) by the Term Loan
Borrowers, when added together with the amount of Indebtedness previously Incurred
by such Persons pursuant to this clause (2) and then outstanding, does not
exceed $30 million;

 

(3)          Indebtedness owed to and
held by Parent or any Restricted Subsidiary; provided, however,
that (A) any subsequent issuance or transfer of any Capital Stock which
results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary
or any subsequent transfer of such Indebtedness (other than to Parent or a
Restricted Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the obligor thereon, (B) if the Company
is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated in right of payment to all obligations with respect to the Notes
and (C) if a Guarantor is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated in right of payment to all obligations
of such obligor with respect to its Guaranty;

 

(4)          Indebtedness of the
Company consisting of the Securities (other than any Additional Securities);

 

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

 

(6)          Indebtedness of a
Restricted Subsidiary Incurred and outstanding on or prior to the date on which
such Subsidiary was acquired by Parent or a Restricted Subsidiary or
Indebtedness secured by a Lien on assets acquired by Parent or a Restricted
Subsidiary (in each case, other than Indebtedness Incurred in connection with,
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 Subsidiary became a Subsidiary or such Subsidiary or asset was acquired by
Parent); provided, however, that on the date of such acquisition
and after giving pro  forma effect thereto,

 

51

 

Parent would have been able to Incur at least
$1.00 of additional Indebtedness pursuant to paragraph (a) of this
Section 4.03;

 

(7)          Refinancing Indebtedness
in respect of Indebtedness Incurred pursuant to Section 4.03(a) or
pursuant to clause (4), (5) or (6) or this clause (7) of this
paragraph (b); provided, however, that to the extent such
Refinancing Indebtedness directly or indirectly Refinances Indebtedness of a
Subsidiary Incurred pursuant to clause (6), such Refinancing Indebtedness
shall be Incurred only by such Subsidiary;

 

(8)          Hedging Obligations
consisting of (A) Interest Rate Agreements related to Indebtedness
permitted to be Incurred by Parent and any Restricted Subsidiary pursuant to
this Indenture, (B) Currency Agreements not entered into for the purpose
of speculation and (C) Commodity Price Protection Agreements not entered
into for the purpose of speculation;

 

(9)          obligations in respect
of performance, bid and surety bonds and completion guarantees provided by
Parent or any Restricted Subsidiary in the ordinary course of business;

 

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

 

(11)    Indebtedness of Foreign
Subsidiaries in an aggregate principal amount, which when taken together with
all other Indebtedness of Foreign Subsidiaries Incurred pursuant to this
clause (11) and then outstanding, does not exceed the greater of
(A) $15.0 million and (B) 10% of the combined Total Assets of
the Foreign Subsidiaries;

 

(12)    Indebtedness consisting of the
Guaranty of a Guarantor and any Guarantee by a Guarantor of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to clause (1), (2),
(3), (4), (5), (11) or (17) or pursuant to clause (7) to the extent the
Refinancing Indebtedness Incurred thereunder directly or indirectly Refinances
Indebtedness Incurred pursuant to Section 4.03(a) or pursuant to
clause (4) or (5);

 

52

 

(13)    Indebtedness (including
Capital Lease Obligations) Incurred by Parent or any Restricted Subsidiary
(A) to finance the purchase, lease, construction, cost of installation or
improvement of property (real or personal) or equipment (whether through the
direct purchase of assets or the Capital Stock of any Person owning such
assets) at the time of, or within 180 days after, such purchase, lease,
installation or improvement or (B) in connection with, and to finance, the
acquisition of a business, in an aggregate principal amount which, when taken
together with the amount of Indebtedness previously incurred pursuant to this
clause (13) and then outstanding (including any Refinancing Indebtedness
with respect thereto), does not exceed the greater of (A) $30 million
and (B) 5% of the consolidated Total Assets of Parent and the Restricted
Subsidiaries;

 

(14)    Indebtedness of Parent or any
Restricted Subsidiary to the extent the net proceeds thereof are promptly
(A) used to redeem the Notes in full or (B) deposited to defease or
discharge the Notes, in each case in accordance with the terms of this
Indenture;

 

(15)    Indebtedness arising from
agreements of Parent or any Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred in connection with the disposition of any business, assets or
Subsidiary of Parent or such Restricted Subsidiary or from letters of credit,
surety bonds or performance bonds securing any obligation of Parent or a
Restricted Subsidiary pursuant to such agreements (to the extent such letters
of credit are not drawn against, or if and to the extent drawn against, the
Indebtedness representing such drawing is extinguished within five Business
Days from its Incurrence), other than Guarantees of Indebtedness Incurred by
any Person acquiring all or any portion of such business, assets or Subsidiary;
provided, however, that the maximum aggregate liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
actually received by Parent or such Restricted Subsidiary in connection with
such disposition;

 

(16)    Indebtedness of a Receivables
Subsidiary Incurred pursuant to a Qualified Receivables Transaction; and

 

(17)    Indebtedness of Parent or any
Restricted Subsidiary in an aggregate principal amount which, when taken
together with all other Indebtedness of Parent and

 

53

 

the Restricted Subsidiaries outstanding on
the date of such Incurrence (other than Indebtedness permitted by
clauses (1) through (16) above or Section 4.03(a)) does not exceed
$25 million.

 

(c)                                       Notwithstanding
the foregoing, none of Parent, the Company and any Subsidiary Guarantor shall
Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof
are used, directly or indirectly, to Refinance any Subordinated Obligations of
Parent, the Company or any Subsidiary Guarantor unless such Indebtedness shall
be subordinated to the Securities or to the applicable Guaranty to at least the
same extent as such Subordinated Obligations.

 

(d)                                      For
purposes of determining compliance with this Section 4.03, (1) any
Indebtedness Incurred under the Credit Agreement on the Issue Date will be
treated as Incurred under clauses (1) and (2) of paragraph (b) above,
(2) in the event that an item of Indebtedness (or any portion thereof)
meets the criteria of more than one of the types of Indebtedness described
herein, Parent, in its sole discretion, shall classify such item of
Indebtedness (or any portion thereof) at the time of Incurrence and shall only
be required to include the amount and type of such Indebtedness in one of the
above clauses, (3) Parent shall be entitled to divide and classify an item
of Indebtedness in more than one of the types of Indebtedness described herein
and (4) other than Indebtedness classified pursuant to clause (d)(1)
above, following the date of its Incurrence, any Indebtedness originally
classified as Incurred pursuant to one of the clauses in paragraph (b)
above may later be reclassified by Parent such that it will be deemed as having
been Incurred pursuant to Section 4.03(a) or another clause in
Section 4.03(b) above, as applicable, to the extent that such reclassified
Indebtedness could be Incurred pursuant to such new paragraph or clause at the
time of such reclassification.

 

(e)                                       Notwithstanding Sections 4.03(a) and 4.03(b),
none of Parent, the Company and any Subsidiary Guarantor shall Incur
(1) any Indebtedness if such Indebtedness is subordinate or junior in
ranking in any respect to any Senior Indebtedness of Parent, the Company or
such Subsidiary Guarantor, as applicable, unless such Indebtedness is Senior

 

54

 

Subordinated Indebtedness or is
expressly subordinated in right of payment to Senior Subordinated Indebtedness
of Parent, the Company or such Subsidiary Guarantor, as applicable, or
(2) any Secured Indebtedness that is not Senior Indebtedness of such
Person unless contemporaneously therewith such Person makes effective provision
to secure the Securities or the relevant Guaranty, as applicable, equally and
ratably with such Secured Indebtedness for so long as such Secured Indebtedness
is secured by a Lien.

 

(f)                                         For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the Incurrence of Indebtedness where the Indebtedness Incurred is
denominated in a different currency, the amount of such Indebtedness shall be
the U.S. Dollar Equivalent, determined on the date of the Incurrence, of such
Indebtedness; provided, however, that if any such Indebtedness
denominated in a different currency is subject to a Currency Agreement with
respect to U.S. dollars covering all principal, premium, if any, and interest
payable on such Indebtedness, the amount of such Indebtedness expressed in U.S.
dollars shall be as provided in such Currency Agreement.  The principal amount of any Refinancing
Indebtedness Incurred in the same currency as the Indebtedness being Refinanced
shall be the U.S. Dollar Equivalent of the Indebtedness Refinanced, determined
in accordance with the preceding sentence, except to the extent that the
principal amount of the Refinancing Indebtedness exceeds the principal amount
of the Indebtedness being Refinanced, in which case the U.S. Dollar Equivalent
of such excess shall be determined on the date such Refinancing Indebtedness is
Incurred.

 

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

 

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

 

(2)          Parent is not entitled
to Incur an additional $1.00 of Indebtedness under Section 4.03(a); or

 

(3)          the aggregate amount of
such Restricted Payment and all other Restricted Payments since the Issue Date
would exceed the sum of (without duplication):

 

55

 

 

(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 Issue Date occurs to the end of the most recent fiscal quarter
ending prior to the date of such Restricted Payment (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such deficit); plus

 

(B)                                (i) 100% of the
aggregate Net Cash Proceeds and the Fair Market Value of other property or
assets (other than Indebtedness of any Person that, upon its transfer to
Parent, would not constitute a Temporary Cash Investment of Parent) received by
Parent 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 Parent and other than an issuance or sale to an employee stock
ownership plan or to a trust established by Parent or any of its Subsidiaries
for the benefit of their employees) and (ii) 100% of any cash and the Fair
Market Value of other property or assets (other than Indebtedness of any Person
that, upon its contribution to Parent, would not constitute a Temporary Cash
Investment of Parent) received by Parent from its shareholders as a capital
contribution subsequent to the Issue Date, other than, in the case of each of
(i) and (ii), an amount not to exceed $5 million, contributed or received
by Parent after the Issue Date by members of Parent’s management, directors and
consultants or the Permitted Holders as described under the section of the
Offering Circular entitled “Certain Relationships and Related
Transactions—Investment by Management”; plus

 

(C)                                the amount by which
Indebtedness is reduced on Parent’s consolidated balance sheet upon the
conversion or exchange subsequent to the Issue Date of any Indebtedness for
Capital Stock (other than Disqualified Stock) of Parent (less the amount of any
cash, or the Fair Market Value of any other property, distributed by Parent
upon such conversion or exchange); provided, however,

 

56

 

that the foregoing amount shall not exceed the Net Cash Proceeds
received by Parent or any Restricted Subsidiary from the sale of such
Indebtedness (excluding Net Cash Proceeds from sales to a Subsidiary of Parent
or to an employee stock ownership plan or to a trust established by Parent or
any of its Subsidiaries for the benefit of their employees); plus

 

(D)                               an amount equal to the
sum of (i) the net reduction in the Investments (other than Permitted
Investments) made by Parent or any Restricted Subsidiary in any Person
resulting from repurchases, repayments or redemptions of such Investments by
such Person, the release of any Guarantees previously given by Parent or any
Restricted Subsidiary with respect to Indebtedness of any Person, proceeds
realized on the sale of such Investment and proceeds representing the return of
capital (excluding dividends and distributions otherwise included in
“Consolidated Net Income”), in each case received by Parent or any Restricted
Subsidiary, and (ii) to the extent such Person is an Unrestricted
Subsidiary, the portion (proportionate to Parent’s equity interest in such
Subsidiary) of the Fair Market Value of the net assets of such 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 Person or Unrestricted Subsidiary, the amount of
Investments (excluding Permitted Investments) previously made (and treated as a
Restricted Payment) by Parent or any Restricted Subsidiary in such Person or
Unrestricted Subsidiary.

 

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

 

(1)          any Restricted Payment
made out of the Net Cash Proceeds of the substantially concurrent sale of, or
made by exchange for, Capital Stock of Parent (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary of Parent or an
employee stock ownership plan or to a trust established by Parent or any

 

57

 

of its Subsidiaries for the benefit of their
employees) or a substantially concurrent cash capital contribution received by
Parent from its shareholders; 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
or such cash capital contribution (to the extent so used for such Restricted
Payment) shall be excluded from the calculation of amounts under
Section 4.04(a)(3)(B);

 

(2)          any purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value
of Subordinated Obligations of Parent, the Company or a Subsidiary Guarantor  made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Indebtedness of such Person
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;

 

(3)          dividends paid within
60 days after the date of declaration thereof if at such date of
declaration such dividend would have complied with this Section 4.04; provided,
however, that such dividend shall be included in the calculation of the
amount of Restricted Payments;

 

(4)          the purchase, repurchase, redemption, retirement or other acquisition of
shares of Capital Stock of Parent, any of its Subsidiaries or any direct or
indirect parent entity of Parent from employees, former employees, directors,
former directors or consultants of Parent, any of its Subsidiaries or any
direct or indirect parent entity of Parent (or permitted transferees of such
employees, former employees, directors or former directors), pursuant to the
terms of the agreements (including employment agreements) or plans approved by
the Parent Board or the Board of Directors of any direct or indirect parent
entity of Parent under which such individuals purchase or sell, or are granted
the option to purchase or sell, shares of such Capital Stock; provided, however,
that the aggregate amount of such repurchases and other acquisitions in any
calendar year shall not exceed the lesser of (A) the sum of
(x) $2.5 million and (y) the aggregate amount of Restricted
Payments permitted (but not made) pursuant to this clause (b)(4) in prior
calendar years and (B) $7.5 million; provided further, however,
that such amount in any calendar year may be increased by an amount not to
exceed (I) the Net

 

58

 

Cash Proceeds received by Parent
from the sale of Capital Stock (other than Disqualified Stock) of Parent to
employees, directors or consultants that occurs after the Issue Date, other
than an amount, not to exceed $5 million, received by Parent from such sale
after the Issue Date as described under the section of the Offering Circular
entitled “Certain Relationships and Related Transactions—Investment by
Management” (provided that the amount of such Net Cash Proceeds utilized for
any such purchase, repurchase, redemption, retirement or other acquisition will
not increase the amount available for Restricted Payments under
Section 4.04(a)(3)(B)) plus (II) the net cash proceeds of key
man life insurance policies received by Parent after the Issue Date; and provided
further, however, that such repurchases and other acquisitions shall
be excluded in the calculation of the amount of Restricted Payments;

 

(5)          dividends or
distributions to any direct or indirect parent entity of Parent to be used by
such entity solely to pay franchise taxes and other fees required to maintain
its corporate existence and to pay for general corporate and overhead expenses
(including directors’ fees and salaries, indemnification and contribution
obligations to directors and other compensation of employees) incurred by such
entity in the ordinary course of its business; provided, however,
that such dividends and distributions shall not exceed $1.0 million in the
aggregate for all such entities in any fiscal year; provided further, however,
that such dividends and distributions shall be excluded in the calculation of
the amount of Restricted Payments;

 

(6)          dividends or
distributions to holders of Capital Stock of any direct or indirect parent
entity of Parent in amounts equal to the maximum Federal, state and local
income tax rate applicable to an individual resident in New York, New York
multiplied by the sum of (x) the income of such Person for such taxable
year, as determined for Federal income tax purposes, attributable to Parent and
its Subsidiaries (other than any such income arising solely as a result of a
dividend or distribution to such Person) and (y) to the extent not taken
into account pursuant to clause (x), the net income of any Foreign
Subsidiary for such taxable year that is described in Section 951(a) of
the Code;

 

(7)          payments of dividends on
Disqualified Stock issued pursuant to Section 4.03; provided, however,
that

 

59

 

such dividends shall be excluded in the
calculation of the amount of Restricted Payments;

 

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

 

(9)          cash payments in lieu of
the issuance of fractional shares in connection with the exercise of warrants,
options or other securities convertible into or exchangeable for Capital Stock
of Parent; provided, however, that any such cash payment shall
not be for the purpose of evading the limitation of this Section 4.04 (as
determined in good faith by the Board of Directors of the Company); provided
further, however, that such payments shall be excluded in the
calculation of the amount of Restricted Payments;

 

(10)    in the event of a Change of
Control, and if no Default shall have occurred and be continuing, the payment,
purchase, redemption, defeasance or other acquisition or retirement of
Subordinated Obligations of Parent, the Company or any Subsidiary Guarantor, in
each case, at a purchase price not greater than 101% of the principal amount
(or, if such Subordinated Obligations were issued with original issue discount,
101% of the accreted value) of such Subordinated Obligations, plus any accrued
and unpaid interest thereon; provided, however, that prior to
such payment, purchase, redemption, defeasance or other acquisition or
retirement, the Company (or a third party to the extent permitted by this
Indenture) has made a Change of Control Offer with respect to the Securities as
a result of such Change of Control and has repurchased all Securities validly
tendered and not withdrawn in connection with such Change of Control Offer; provided
further, however, that such repurchase and other acquisition shall
be included in the calculation of the amount of Restricted Payments;

 

(11)    in the event of an Asset
Disposition that requires Parent to offer to repurchase Securities pursuant to
Section 4.06 and if no Default shall have occurred and be continuing, the
payment, purchase, redemption, defeasance or other acquisition or retirement of

 

60

 

Subordinated Obligations of
Parent, the Company or any Subsidiary Guarantor, in each case, at a purchase
price not greater than 100% of the principal amount (or, if such Subordinated
Obligations were issued with original issue discount, 100% of the accreted value)
of such Subordinated Obligations, plus any accrued and unpaid interest thereon;
provided, however, that (A) prior to such payment, purchase,
redemption, defeasance or other acquisition or retirement, Parent has made an
offer with respect to the Notes pursuant to the provisions of Section 4.06
and has repurchased all Securities validly tendered and not withdrawn in
connection with such offer and (B) the aggregate amount of all such
payments, purchases, redemptions, defeasances or other acquisitions or retirements
of all such Subordinated Obligations may not exceed the amount of Net Available
Cash remaining after Parent has complied with the terms of
Section 4.06(a)(3); provided further, however, that such
repurchases and other acquisitions shall be included in the calculation of the
amount of Restricted Payments;

 

(12)    payments of intercompany
subordinated Indebtedness, the Incurrence of which was permitted under
Section 4.03(b)(3); provided, however, that such payments
shall be excluded in the calculation of the amount of Restricted Payments;

 

(13)    Permitted Acquisition
Payments; provided, however, that such payments shall be excluded
in the calculation of the amount of Restricted Payments; or

 

(14)    Restricted Payments in an
amount which, when taken together with all Restricted Payments made pursuant to
this clause (14), does not exceed $20.0 million; provided, however,
that at the time of each such Restricted Payment, no Default shall have
occurred and be continuing; provided further, however, that such
Restricted Payments shall be excluded in the calculation of the amount of
Restricted Payments.

 

SECTION 4.05                    Limitation on Restrictions on
Distributions from Restricted Subsidiaries.  Parent 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 Parent or a Restricted Subsidiary or pay any Indebtedness

 

61

 

owed to Parent or the Company, (b) make
any loans or advances to Parent or the Company or (c) transfer any of its
property or assets to Parent or the Company, except:

 

(1)          with respect to
clauses (a), (b) and (c),

 

(A)                              any encumbrance or
restriction pursuant to an agreement in effect at or entered into on the Issue
Date;

 

(B)                                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 Parent (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 Parent) and outstanding on
such date;

 

(C)                                any encumbrance or
restriction pursuant to an agreement effecting a Refinancing of Indebtedness
Incurred pursuant to an agreement referred to in Section 4.05(1)(A) or (B)
or this clause (C) or contained in any amendment to an agreement referred
to in Section 4.05(1)(A) or (B) or this clause (C); provided, however,
that the encumbrances and restrictions with respect to 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;

 

(D)                               any encumbrance or
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;

 

62

 

(E)                                 any restriction
arising under applicable law, regulation or order;

 

(F)                                 any encumbrance or
restriction contained in the terms of any Indebtedness of Parent, the Company
or any Subsidiary Guarantor; provided, however, that such
encumbrances or restrictions, taken as a whole, are no more restrictive in the
aggregate than those contained in this Indenture, as determined in good faith
by the Parent Board, whose determination shall be conclusive;

 

(G)                                any encumbrance or
restriction contained in the terms of any Indebtedness of Foreign Subsidiaries
permitted to be Incurred pursuant to Section 4.03;

 

(H)                               any encumbrance or
restriction contained in any agreement or instrument governing Senior
Indebtedness (including the Credit Agreement) not Incurred in violation of the
Indenture; provided, however, that such encumbrances or
restrictions, taken as a whole, are no more restrictive in the aggregate than
those contained in the Credit Agreement as in effect on the Issue Date, as
determined in good faith by the Parent Board, whose determination shall be
conclusive;

 

(I)                                    with respect to any
Restricted Subsidiary (other than a Foreign Subsidiary), any encumbrance or
restriction contained in the terms of any Indebtedness, or any agreement
pursuant to which such Indebtedness was issued, if:

 

(x)                                   the encumbrance or
restriction applies only in the event of a payment default or a default with
respect to a financial covenant contained in such Indebtedness or agreement,

 

(y)                                 the encumbrance or
restriction is not materially more disadvantageous to the Securityholders than
is customary in comparable financings, as determined in good faith by the
Parent Board, whose determination shall be conclusive, and

 

63

 

(z)                                   such encumbrance or
restriction will not materially affect the Company’s ability to make principal
or interest payments on the Securities, as determined in good faith by the
Parent Board, whose determination shall be conclusive; and

 

(J)                                   any encumbrance or
restriction pursuant to the terms of any agreement entered into in connection
with any Qualified Receivables Transaction; provided, however,
that such encumbrance or restriction applies only to a Receivables Subsidiary;
and

 

(2)          with respect to
clause (c) only,

 

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

 

(B)                                any encumbrance or
restriction contained in security agreements or mortgages securing Indebtedness
of a Restricted Subsidiary to the extent such encumbrance or restriction
restricts the transfer of the property subject to such security agreements or
mortgages;

 

(C)                                any encumbrance or
restriction pursuant to purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired;

 

(D)                               any encumbrance or
restriction on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business;

 

(E)                                 any encumbrance or
restriction contained in customary provisions in joint venture agreements
entered into in the ordinary course of business with respect to the disposition
or distribution of assets or property of the applicable joint venture or that
restrict the transfer of interests in such joint venture; and

 

64

 

(F)                                 customary restrictions
imposed on the transfer of, or in licenses related to, copyrights, patents or
other intellectual property and contained in agreements entered into in the
ordinary course of business.

 

SECTION 4.06                    Limitation on Sales of Assets and
Subsidiary Stock. 
(a)  Parent shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Disposition unless
(1) Parent 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) of the shares and
assets subject to such Asset Disposition; (2) at least 75% of the consideration
thereof received by Parent or such Restricted Subsidiary is in the form of cash
or cash equivalents; and (3) an amount equal to 100% of the Net Available
Cash from such Asset Disposition is applied by Parent (or such Restricted
Subsidiary, as the case may be) (A) first, to the extent Parent
elects (or is required by the terms of any Indebtedness), to prepay, repay,
redeem or purchase Senior Indebtedness of Parent, the Company or any Subsidiary
Guarantor or Indebtedness (other than any Disqualified Stock) of a Wholly Owned
Subsidiary (in each case other than Indebtedness owed to Parent and any
Subsidiary) within one year from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash; (B) second,
to the extent of the balance of such Net Available Cash after application in
accordance with clause (A), to the extent Parent elects, to acquire (or enter into a binding agreement to acquire,
provided that such commitment shall be subject only to customary conditions
(other than any financing conditions) and such acquisition shall be consummated
within 90 days after the end of the one-year period referred to below in
this clause (B)) Additional Assets within one year from the later
of the date of such Asset Disposition or the receipt of such Net Available
Cash; and (C) third, to the extent of the balance of such Net
Available Cash after application in accordance with clauses (A) and (B),
to cause the Company to make an Offer to the Holders of the Securities (and to
holders of other Senior Subordinated Indebtedness of Parent, the Company or a
Subsidiary Guarantor designated by Parent) to purchase Securities (and such
other Senior Subordinated Indebtedness) pursuant to and subject to the
conditions of Section 4.06(b); provided, however, that in

 

65

 

connection with any prepayment, repayment or
purchase of Indebtedness pursuant to clause (A) or (C) above, Parent 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.  Notwithstanding the foregoing provisions of
this Section 4.06, Parent and the Restricted Subsidiaries shall not be
required to apply any Net Available Cash in accordance with this
Section 4.06(a) except to the extent that the aggregate Net Available Cash
from all Asset Dispositions that is not applied in accordance with this
Section 4.06(a) exceeds $20.0 million.  Pending application of Net Available Cash pursuant to this
Section 4.06(a), such Net Available Cash shall be invested in Temporary
Cash Investments or applied to temporarily reduce revolving credit
indebtedness.

 

For the purposes of this Section 4.06(a), the following are deemed
to be cash or cash equivalents: 
(i) the assumption of Indebtedness of Parent (other than
Obligations in respect of Disqualified Stock of Parent) or any Restricted
Subsidiary (other than Obligations in respect of Disqualified Stock or
Preferred Stock of the Company or a Subsidiary Guarantor) and the release of
Parent or such Restricted Subsidiary from all liability on such Indebtedness in
connection with such Asset Disposition and (ii) securities or other
obligations received by Parent or any Restricted Subsidiary from the transferee
that are promptly converted by Parent or such Restricted Subsidiary into cash,
to the extent of cash received in that conversion.

 

(b)                                      In
the event of an Asset Disposition that requires the purchase of Securities (and
other Senior Subordinated Indebtedness of Parent, the Company or a Subsidiary
Guarantor) pursuant to Section 4.06(a)(3)(C), the Company shall purchase
Securities tendered pursuant to an offer by the Company for the Securities (and
such other Senior Subordinated Indebtedness) (the “Offer”) at a purchase price
of 100% of their principal amount (or, in the event such other Senior
Subordinated Indebtedness was issued with significant original issue discount,
100% of the accreted value thereof), 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

 

66

 

Subordinated Indebtedness) in accordance with
the procedures (including prorating in the event of oversubscription) set forth
in Section 4.06(c).  If the
aggregate purchase price of the securities tendered pursuant to the Offer
exceeds the Net Available Cash allotted to their purchase, the Company shall
select the securities to be purchased on a pro  rata basis but in
round denominations, which in the case of the Securities will be denominations
of $1,000 principal amount or multiples thereof.  If the aggregate purchase
price of the Securities (and other Senior Subordinated Indebtedness) is less
than the Net Available Cash allotted to the purchase of Securities (and other
Senior Subordinated Indebtedness), the Company may apply the remaining Net
Available Cash for any general corporate purpose not restricted by the terms of
this Indenture.  The Company
shall not be required to make an Offer to purchase Securities (and other Senior
Subordinated Indebtedness of Parent, the Company or a Subsidiary Guarantor)
pursuant to this Section 4.06 if the Net Available Cash available therefor
is less than $20.0 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).  Upon completion of such an Offer, Net
Available Cash shall be deemed to be reduced by the aggregate amount of such
Offer.

 

(c)                                       (1)  Promptly,
and in any event within 10 days after Parent becomes obligated to make an
Offer, the Company shall deliver to the Trustee and send, by first-class mail
to each Holder, a written notice stating that the Holder may elect to have his
Securities purchased by the Company either in whole or in part (subject to
prorating as described in Section 4.06(b) 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 Parent and its Subsidiaries
which the Company in good faith believes will enable such Holders to make an
informed decision (which at a minimum will include (A) the most recently
filed Annual Report on Form 10-K (including audited consolidated financial
statements) of Parent, the most recent subsequently filed Quarterly

 

67

 

Report on Form 10-Q and any Current
Report on Form 8-K of Parent filed subsequent to such Quarterly Report,
other than Current Reports describing Asset Dispositions otherwise described in
the offering materials (or corresponding successor reports), (B) a
description of material developments in Parent’s business subsequent to the
date of the latest of such Reports, and (C) 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
(A) the amount of the Offer (the “Offer Amount”), including information as
to any other Senior Subordinated Indebtedness included in the Offer,
(B) the allocation of the Net Available Cash from the Asset Dispositions
pursuant to which such Offer is being made and (C) the compliance of such
allocation with the provisions of Section 4.06(a) and (b).  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.  If the
Offer includes other  Senior
Subordinated Indebtedness, the
deposit described in the preceding sentence may be made with any other paying
agent pursuant to arrangements satisfactory to the Trustee.   Upon the expiration of the period for which
the Offer remains open (the “Offer Period”), the Company shall deliver to the
Trustee for cancellation 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 (or cause the delivery of payment) to each tendering
Holder in the amount of the purchase price. 
In the event that the aggregate purchase price of the 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 4.06.

 

68

 

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

 

(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
have breached its obligations under this Section by virtue of its compliance
with such securities laws or regulations.

 

SECTION 4.07                    Limitation on Affiliate Transactions.  (a)  Parent shall not, and shall
not permit any Restricted Subsidiary to, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property,
employee compensation arrangements or the rendering of any service) with, or
for the benefit of, any Affiliate of Parent (an “Affiliate Transaction”) unless
(1) the terms of the Affiliate Transaction are no less favorable to Parent
or such Restricted Subsidiary than those that could be obtained at

 

69

 

the time of the Affiliate Transaction in
arm’s-length dealings with a Person who is not an Affiliate; (2) if such
Affiliate Transaction involves an amount in excess of $5.0 million, the
terms of the Affiliate Transaction are set forth in writing and a majority
of the directors of Parent disinterested with respect to such Affiliate
Transaction have determined in good faith that the criteria set forth in
clause (1) are satisfied and have approved the relevant Affiliate
Transaction as evidenced by a resolution of the Parent Board; and (3) if
such Affiliate Transaction involves an amount in excess of $20.0 million,
the Parent Board shall also have received a written opinion from an Independent
Qualified Party to the effect that such Affiliate Transaction is fair, from a
financial standpoint, to Parent and the Restricted Subsidiaries or is not less
favorable to Parent and the Restricted Subsidiaries than could reasonably be
expected to be obtained at the time in an arm’s-length transaction with a
Person who was not an Affiliate.

 

(b)                                      The
provisions of Section 4.07(a) shall not prohibit (1) any Investment
(other than a Permitted Investment) or other Restricted Payment, in each case
permitted to be made pursuant to Section 4.04; (2) 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 Parent Board, (3) loans
or advances to employees in the ordinary course of business in accordance with
the past practices of Parent or the Restricted Subsidiaries, but in any event
not to exceed $2.5 million in the aggregate outstanding at any one time;
(4) the payment of reasonable fees and compensation to, and the provision
of reasonable indemnity on behalf of, officers, directors and employees of
Parent or any Restricted Subsidiary as determined in good faith by the Parent Board;
(5) any transaction with a Restricted Subsidiary or joint venture or
similar entity which would constitute an Affiliate Transaction solely because
Parent or a Restricted Subsidiary owns an equity interest in or otherwise
controls such Restricted Subsidiary, joint venture or similar entity;
(6) the issuance or sale of any Capital Stock (other than Disqualified
Stock) of Parent; (7) any transactions
involving the Parent or any of the Restricted Subsidiaries, on the one hand,
and any nationally recognized commercial or investment bank or any of its
Affiliates, on the other hand, in connection with the

 

70

 

Acquisition, the execution of
the Credit Agreement and any amendment, modification, supplement, extension,
refinancing, replacement and other transactions related thereto, or any
management, financial advisory, financing, underwriting or placement services
or any other investment banking, capital markets, banking or similar services,
which transactions, in the reasonable determination of a majority of the
directors of Parent disinterested with respect to such transactions, are on
commercially reasonable terms; (8) any transaction with a Receivables
Subsidiary pursuant to a Qualified Receivables Transaction; (9) the
Acquisition and any transaction consummated on the Issue Date in connection
therewith and described in the Offering Circular; (10) any agreement as in
effect on the Issue Date and described in the Offering Circular under “Certain
Relationships and Related Transactions” or any renewals or extensions of any
such agreement (so long as such renewals or extensions are not less favorable
to Parent or the Restricted Subsidiaries) and the transactions evidenced
thereby; and (11) sales of inventory or other products to any Affiliate of
Parent entered into in the ordinary course of business on terms that are no
less favorable to Parent and the Restricted Subsidiaries than those that could
be obtained at the time of such sale in arm’s length dealings with a Person who
is not an Affiliate.

 

SECTION 4.08                    Limitation on Line
of Business.  Parent shall not, and
shall not permit any Restricted Subsidiary to, engage in any business other
than a Related Business.

 

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 on the date of purchase 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 any Senior Indebtedness of Parent or the Company
(including the Credit Agreement) 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

 

71

 

following any Change of Control, Parent or
the Company shall (1) repay in full all such Senior Indebtedness 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, or, at the Company’s option,
prior to such Change of Control but after the transaction giving rise to such
Change of Control is publicly announced, the Company shall mail a notice to
each Holder with a copy to the Trustee (the “Change of Control Offer”) 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 on the date of purchase, 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;

 

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

 

(4)          that the Change of
Control Offer is conditioned upon the Change of Control occurring if the notice
is mailed prior to a Change of Control; and

 

(5)          the instructions, as
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 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

 

72

 

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 Company to the Trustee for cancellation, and the
Company shall pay the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto.

 

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

 

(f)                                         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 of its compliance
with such securities laws or regulations.

 

SECTION 4.10                    Future Guarantors.  Parent shall cause each Restricted U.S.
Subsidiary that Incurs any Bank Indebtedness to, and each Foreign Subsidiary
that enters into a Guarantee of any Senior Indebtedness of Parent, the Company
or a Restricted U.S. Subsidiary to, in each case, at the same time, execute and
deliver to the Trustee a Guaranty Agreement pursuant to which such Restricted
Subsidiary will Guarantee payment of the Securities on the same terms and
conditions as those set forth in this Indenture.

 

SECTION 4.11                    Compliance
Certificate.  Parent
shall deliver to the Trustee within 120 days after the end of each fiscal
year of Parent an Officers’ Certificate stating that in the course of the
performance by the signers of their duties as Officers of Parent they would

 

73

 

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 Parent is taking or
proposes to take with respect thereto. 
Parent also shall comply with TIA § 314(a)(4).

 

SECTION 4.12                    Further Instruments and Acts.  Upon request of the Trustee, Parent and 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 Parent or Company
May Merge or Transfer Assets. 
(a)  Neither Parent nor the Company shall consolidate with or
merge with or into, or amalgamate, or convey, transfer or lease, in one
transaction or a series of transactions, directly or indirectly, all or
substantially all its assets to, any Person, unless:

 

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

 

(2)                                  immediately after
giving pro forma effect to such transaction (and treating any Indebtedness
which becomes an obligation of the Successor Entity or any Subsidiary as a
result of such transaction as having been Incurred by the Successor Entity or
such Subsidiary at the time of such transaction other than any Indebtedness of
Parent or any Restricted Subsidiary previously Incurred by Parent or such
Restricted Subsidiary at the time such entity was a

 

74

 

Restricted Subsidiary in compliance with this Indenture), no Default
shall have occurred and be continuing;

 

(3)                                  in the case of a
transaction involving Parent, immediately after giving pro forma effect to such
transaction, the Successor Entity would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a); and

 

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

 

provided, however, that clause (3)
will not be applicable to (A) a Restricted Subsidiary consolidating with,
merging into, amalgamating with or transferring all or part of its properties
and assets to Parent or the Company or (B) Parent or the Company merging
or amalgamating with an Affiliate of the Company solely for the purpose and
with the sole effect of reincorporating or continuing the Company in another
jurisdiction.

 

For purposes of this Section 5.01(a), the sale, lease, conveyance,
assignment, transfer or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of Parent, which properties
and assets, if held by Parent instead of such Subsidiaries, would constitute
all or substantially all of the properties and assets of Parent on a
consolidated basis, shall be deemed to be the transfer of all or substantially
all of the properties and assets of Parent.

 

The Successor Entity shall be the successor to Parent or the Company, as
applicable, and shall succeed to, and be substituted for, and may exercise
every right and power of, Parent or the Company, as applicable, under this
Indenture, and the predecessor of Parent or the Company, except in the case of
a lease, shall be released from the obligation to pay the principal of and
interest on the Securities, as applicable.

 

(b)                                      Parent
shall not permit any Subsidiary Guarantor to consolidate with or merge with or
into, amalgamate with or convey, transfer or lease, in one transaction or
series of transactions, all or substantially

 

75

 

all of its assets to any Person unless:  (1) (except in the case of a Subsidiary
Guarantor (x) that has been disposed of in its entirety to another Person
(other than to Parent, the Company or any other Subsidiary Guarantor), whether
through a merger, amalgamation, consolidation or sale of Capital Stock or
assets or (y) that, as a result of the disposition of all or a portion of its
Capital Stock, ceases to be a Subsidiary, in both cases, if in connection
therewith Parent provides an Officers’ Certificate to the Trustee to the effect
that Parent will comply with its obligations under Section 4.06 in respect of
such disposition) the resulting, surviving, continuing or transferee Person (if
not such Subsidiary Guarantor) shall be a Person organized and existing under
the laws of the jurisdiction under which such Subsidiary Guarantor was
organized or under the laws of the United States of America, or any State thereof
or the District of Columbia, and such Person shall expressly assume, by a
Guarantee Agreement, in a form acceptable to the Trustee, all the obligations
of such Subsidiary Guarantor, if any, under its Subsidiary Guaranty;
(2) immediately after giving effect to such transaction or transactions on
a pro  forma basis (and treating any Indebtedness which becomes an
obligation of the resulting, surviving or transferee Person as a result of such
transaction as having been issued by such Person at the time of such
transaction, other than any Indebtedness of any Subsidiary Guarantor previously
Incurred at the time such entity was a Restricted Subsidiary in compliance with
this Indenture), no Default shall have occurred and be continuing; and
(3) Parent delivers to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that such consolidation, merger, amalgamation or
transfer and such Guaranty Agreement, if any, complies with this Indenture.

 

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;

 

76

 

(2)                                  the Company
(A) defaults in the payment of the principal of any Security when the same
becomes due and payable at its Stated Maturity,
upon optional redemption, upon declaration of acceleration or otherwise, whether or not such payment shall be
prohibited by Article 10 or (B) fails to 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 or Parent
fails to comply with Section 5.01;

 

(4)                                  the Company or Parent 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, Parent or any Subsidiary Guarantor 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 Parent, 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 $20.0 million,
or its foreign currency equivalent at the time;

 

(7)                                  Parent, the Company,
a Subsidiary Guarantor 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

 

77

 

(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
Parent, the Company, a Subsidiary Guarantor or any Significant Subsidiary in an
involuntary case;

 

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

 

(C)                                orders the winding up
or liquidation of Parent, the Company, a Subsidiary Guarantor 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 $20.0 million or its foreign
currency equivalent at the time is entered against Parent, the Company, a
Subsidiary Guarantor 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; or

 

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

 

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

 

78

 

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, state or other applicable 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) or (5) 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 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 so long as any Bank Indebtedness remains outstanding, no such acceleration
shall be effective until the earlier of (1) five Business Days after the
giving of written notice to the Company and the administrative agent (or
similar agent if there is no administrative agent) under the Credit Agreement
and (2) the day on which any Bank Indebtedness is accelerated.  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

 

79

 

other act on the part of the Trustee or any
Securityholders.  The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration.  No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.  In the event of any Event of Default specified in
clause (6) above, such Event of Default and all consequences thereof shall
be annulled, waived and rescinded, automatically and without any action by the
Trustee or the Holders, if within 20 days after such Event of Default
arose

 

(x)                                   the Indebtedness
that is the basis for such Event of Default has been discharged, or

 

(y)                                 the holders thereof
have rescinded or waived the acceleration, notice or action (as the case may
be) giving rise to such Event of Default.

 

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 Securities by notice to the Trustee may waive an existing
Default and its consequences except (a) a Default in the payment of the
principal of or interest on a Security, (b) a Default arising from the
failure to redeem or purchase any Security when required pursuant to this
Indenture or (c) a Default in respect of a provision that under
Section 9.02 cannot be amended without the consent of each Securityholder

 

80

 

affected.  When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent
or other Default or impair any consequent right.

 

SECTION 6.05.                 Control
by Majority.  The
Holders of a majority in principal amount of the Securities may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture or, subject to
Section 7.01, that the Trustee determines is unduly prejudicial to the
rights of other 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 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 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 Securities do not give the Trustee a
direction inconsistent with the request during such 60-day period.

 

81

 

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.

 

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 and, if such money or property
has been

 

82

 

collected from a Guarantor, to holders of Senior Indebtedness of such
Guarantor, in each case to the extent required by Article 10 and 12;

 

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 6.10.                 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 Securities.

 

SECTION 6.11.                 Waiver of Stay or
Extension Laws.  The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.

 

83

 

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.

 

(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.

 

84

 

(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.

 

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;

 

85

 

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.

 

(f)                                         The
Trustee shall not be deemed to have notice or be charged with knowledge of any
Default or Event of Default (other than under Section 6.01(1) or 6.01(2))
unless the Trustee shall have received from the Company, any Guarantor or any
other obligor upon the Securities or from any Holder written notice thereof at
its address set forth in Section 13.02 hereof, and such notice references the
Securities and this Indenture.

 

SECTION 7.03                    Individual Rights of
Trustee.  The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. 
Any Paying Agent, 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, 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 this Indenture or
in any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee’s certificate of authentication.

 

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

 

86

 

 

that withholding the notice is in the
interests of Securityholders.

 

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

 

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

 

To secure the Company’s payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by

 

87

 

 

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 or any applicable similar foreign 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 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;

 

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

 

(4)          the Trustee otherwise
becomes incapable of acting.

 

If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the 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.

 

88

 

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 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 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 § 310(a).  The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition.  The Trustee shall comply with TIA
§ 310(b); provided, however, that there shall be excluded
from the operation of TIA § 310(b)(1) any indenture or indentures
under which

 

89

 

other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA § 310(b)(1) are met.

 

SECTION 7.11                    Preferential Collection of
Claims Against Company. 
The Trustee shall comply with TIA § 311(a), excluding any creditor
relationship listed in TIA § 311(b). 
A Trustee who has resigned or been removed shall be subject to TIA
§ 311(a) to the extent indicated.

 

Article 8

 

Discharge of Indenture; Defeasance

 

SECTION 8.01                    Discharge of Liability
on Securities; Defeasance. 
(a)  When (1) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to
Section 2.07) for cancellation or (2) all outstanding Securities have
become due and payable, whether at maturity or on a redemption date as a result
of the mailing of a notice of redemption pursuant to Article 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 Section 8.01(c), cease to be of further effect.  The Trustee shall acknowledge satisfaction
and discharge of this Indenture on demand of the Company accompanied by an
Officers’ Certificate and an Opinion of Counsel and at the cost and expense of
the Company.

 

(b)                                      Subject
to Sections 8.01(c) and 8.02, Parent and the Company at any time may
terminate (1) all their respective obligations under the Securities and
this Indenture (“legal defeasance option”) or (2) their respective
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),
6.01(9) and 6.01(10)(but, in the case of Sections 6.01(7) and (8), with
respect only to Parent, Subsidiary Guarantors and Significant Subsidiaries) and
the limitations contained in Section 5.01(a)(3) (“covenant defeasance
option”).  Parent and the Company may
exercise their legal defeasance option

 

90

 

notwithstanding its prior exercise of its
covenant defeasance option.

 

If Parent or the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto.  If Parent or 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), 6.01(9) and 6.01(10) (but, in
the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries and Subsidiary Guarantors)
or because of the failure of Parent or the Company to comply with
Section 5.01(a)(3).  If Parent or the
Company exercises its legal defeasance option or its covenant defeasance
option, Parent and each Subsidiary Guarantor, if any, shall be released from
all its obligations with respect to its Guaranty.

 

Upon satisfaction of the conditions set forth herein and upon request
of Parent or 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.  Parent
or the Company may exercise its legal defeasance option or its covenant
defeasance option only if:

 

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

 

91

 

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

 

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

 

(4)          the deposit does not
constitute a default under any other agreement binding on Parent or the Company
and is not prohibited by Article 10 or 12;

 

(5)          Parent or 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, Parent or the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (A) Parent or the Company has received
from, or there has been published by, the Internal Revenue Service a ruling, or
(B) since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the 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, Parent or 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

 

(8)          Parent or 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.

 

92

 

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
or 12.

 

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 any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, Parent’s and 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

 

93

 

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, Parent, the
Subsidiary Guarantors 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 add Guarantees with
respect to the Securities, including any Subsidiary Guarantees,
or to secure the Securities;

 

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

 

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

 

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

 

(8)          to make any amendment to
the provisions of this Indenture relating to the form, authentication, transfer
and legending of the Securities; provided, however, that
(a) compliance with this Indenture as so amended would not result in the
Securities being transferred in violation of the Securities Act or any other
applicable securities law

 

94

 

and (b) such amendment does not
materially affect the rights of Holders to transfer the Securities.

 

An amendment under this Section may not make
any change that adversely affects the rights under Article 10 or 12 of any
holder of Senior Indebtedness of the Company, Parent or of a Subsidiary
Guarantor then outstanding unless the holders of such Senior Indebtedness (or
their Representative) consent to such change.

 

After an amendment under this Section becomes effective, the Company
shall mail to 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, Parent, the
Subsidiary Guarantors 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 or waiver may
not:

 

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

 

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

 

(3)          reduce the principal of
or change 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 as described in Article 3 hereto or
paragraph (5) of the Securities;

 

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

 

(6)          impair the right of any
Holder of the Securities to receive payment of principal of and interest on
such Holder’s Securities on or after the due dates therefor or

 

95

 

to institute suit for the enforcement of any
payment on or with respect to such Holder’s Securities;

 

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

 

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

 

(9)          make any change in, or
release other than in accordance with this Indenture, the Parent Guaranty or
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 or 12 of any
holder of Senior Indebtedness of the Company, Parent or of a Subsidiary Guarantor then outstanding unless the holders of such
Senior Indebtedness (or any group or representative thereof authorized to give
a consent) consent to such change.

 

After an amendment under this Section becomes effective, the Company
shall mail to 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 9.03                    Compliance
with TIA.  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

 

96

 

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 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.

 

SECTION 9.07                    Payment
for Consent.  Neither
the Company nor any Affiliate of the Company shall, directly or

 

97

 

indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.

 

Article 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 of the Company shall rank senior to
the Securities in accordance with the provisions set forth herein.  All provisions of this Article 10 shall
be subject to Section 10.12.

 

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

 

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

 

(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 as their interests may appear, except

 

98

 

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; and

 

(3)                                  if
a distribution is made to Holders of the Securities that, due to the
subordination provisions, should not have been made to them, such Holders of
the Securities are required to hold it in trust for the holders of Senior
Indebtedness of the Company and pay it over to them as their interests may
appear.

 

SECTION 10.03.           Default on Senior
Indebtedness of the Company.  The
Company shall not pay the principal of or interest on the Securities or make
any deposit pursuant to Section 8.01 and may not purchase, redeem or
otherwise retire any Securities (collectively, “pay the Securities”) if either
of the following (a “Payment Default”) occurs (a) any Obligation on any
Designated Senior Indebtedness of the Company is not paid in full in cash when
due; or (b) any other default on Designated Senior Indebtedness of the
Company occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, the Payment
Default has been cured or waived and any such acceleration has been rescinded
or such Designated Senior Indebtedness has been paid in full in cash; provided,
however, that the Company shall be entitled to pay the Securities
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of any Designated Senior
Indebtedness with respect to which the Payment Default has occurred and is
continuing.  During the continuance of
any default (other than a Payment Default) with respect to any Designated
Senior Indebtedness of the Company pursuant to which the maturity thereof may
be accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company shall not pay the Securities for a period (a “Payment
Blockage Period”) commencing upon the receipt by the Trustee of (with a copy to
the Company) written notice (a “Blockage Notice”) of such default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter.  The Payment Blockage Period shall end
earlier if such Payment Blockage Period is terminated (1) by written
notice

 

99

 

to the Trustee and the Company from the Person or Persons who gave such
Blockage Notice; (2) because the default giving rise to such Blockage
Notice is cured, waived or otherwise no longer continuing; or (3) because
such Designated Senior Indebtedness has been discharged or repaid in full in
cash.  Notwithstanding the provisions
described in the immediately preceding two sentences (but subject to the
provisions contained in the first sentence of this Section), unless the holders
of such Designated Senior Indebtedness or the Representative of such Designated
Senior Indebtedness shall have accelerated the maturity of such Designated
Senior Indebtedness, the Company shall be entitled to resume payments on the
Securities after termination of such Payment Blockage Period.  The Securities shall not be subject to more
than one Payment Blockage Period in any consecutive 360-day period irrespective
of the number of defaults with respect to Designated Senior Indebtedness of the
Company 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 of the Company (other than the Bank
Indebtedness), the Representative of the Bank Indebtedness shall be entitled to
give another Blockage Notice within such period; provided  further,
however, that in no event shall 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, and there must be
181 days during any 360-day consecutive period during which no Payment Blockage
Period is in effect.  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 of the Company initiating such Payment Blockage
Period shall be, or be made, the basis of the commencement of a subsequent
Payment Blockage Period by the Representative of such Designated Senior
Indebtedness, whether or not within a period of 360 consecutive days,
unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days.

 

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

 

100

 

the acceleration.  If any
Designated Senior Indebtedness of the Company is outstanding, the Company shall
not pay the Securities until five Business Days after the Representatives of
all the issues of Designated Senior Indebtedness of the Company receive notice
of such acceleration and, thereafter, shall be entitled to pay the Securities
only if this Article 10 otherwise permits payment at that time.

 

SECTION 10.05.           When Distribution Must Be
Paid Over.  If a 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.

 

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

 

101

 

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 shall continue to make payments
on the Securities and shall not be charged with knowledge of the existence of
facts that under this Article 10 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
such payments are prohibited by this Article 10.  The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness of the Company shall be
entitled to give the notice; provided, however, that, if an issue
of Senior Indebtedness of the Company has a Representative, only the
Representative shall be entitled to give the notice.

 

The Trustee in its individual or any other capacity shall be entitled
to hold Senior Indebtedness of the Company with the same rights it would have if it were not
Trustee.  The Registrar and co-registrar
and the Paying Agent shall be entitled to do the same with like rights.  The Trustee shall be entitled to all the
rights set forth in this Article 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 any Person is to make a distribution
or give a notice to holders of Senior Indebtedness of the Company, such Person
shall be entitled to make such distribution or give such notice to their
Representative (if any).

 

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

 

102

 

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 of the
Company 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 (a) upon any order or decree of
a court of competent jurisdiction in which any proceedings of the nature
referred to in Section 10.02 are pending, (b) upon a certificate of
the liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or to the Securityholders or (c) upon the
Representatives of Senior Indebtedness of the Company for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article 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 shall be entitled to request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 10, and, if such evidence is not
furnished, the Trustee shall be entitled to defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.  The provisions of
Sections 7.01 and 7.02 shall be applicable to all actions

 

103

 

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 of the Company.  The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and shall not be liable to any
such holders if it shall mistakenly pay over or distribute to 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 of the Company 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.

 

Article 11

Guarantees

 

SECTION 11.01.           Guarantees.  Each 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

 

104

 

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 Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or further
assent from such Guarantor and that such Guarantor will remain bound under this
Article 11 notwithstanding any extension or renewal of any Obligation.

 

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

 

Each Guarantor further agrees that its 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 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 Guarantor giving such Guaranty and
each 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 Guarantor hereunder shall not be subject to any
reduction,

 

105

 

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 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 Guarantor or would otherwise operate as a
discharge of such Guarantor as a matter of law or equity.

 

Each Guarantor further agrees that its Guarantee herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment,
or any part thereof, of principal of or interest on any Obligation is rescinded
or must otherwise be restored by any Holder or the Trustee upon the bankruptcy
or reorganization of the Company or otherwise.

 

In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
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 Guarantor hereby promises to
and shall, upon receipt of written demand by the Trustee, forthwith pay, or
cause to be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of (A) the unpaid amount of such Obligations, (B) accrued and
unpaid interest on such Obligations (but only to the extent not prohibited by
law) and (C) all other monetary Obligations of the Company to the Holders
and the Trustee.

 

Each 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

 

106

 

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

 

Each 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.

 

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 Guarantor shall not exceed the maximum amount that
can be hereby guaranteed without rendering this Indenture, as it relates to
such 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 Guarantor and its successors and assigns and shall inure to the benefit of
the successors and assigns of the Trustee and the Holders and, in the event of
any transfer or assignment of rights by any Holder or the Trustee, the rights
and privileges conferred upon that party in this Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.

 

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

 

107

 

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
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
Guarantor in any case shall entitle such Guarantor to any other or further
notice or demand in the same, similar or other circumstances.

 

SECTION 11.06.           Release of Subsidiary Guarantor.  A Subsidiary Guarantor will be released from
its obligations under this Article 11 (other than any obligation that may have
arisen under Section 11.07)

 

(1)                                  upon
the sale or other disposition (including by way of consolidation, merger or
amalgamation) of a Subsidiary Guarantor, including the sale of disposition of
Capital Stock of a Subsidiary Guarantor following which such Subsidiary
Guarantor is no longer a Subsidiary,

 

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

 

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

 

(4)                                  at
such time as such Subsidiary Guarantor does not have any Indebtedness
outstanding that would have required such Subsidiary Guarantor to enter into a
Guaranty Agreement pursuant to Section 4.10 and the Company provides an
Officers’ Certificate to the Trustee certifying that no such Indebtedness is
outstanding and that the Company elects to have such Subsidiary Guarantor
released from this Article 11, or

 

(5)                                  upon
defeasance of the Securities or discharge of this Indenture pursuant to Article
8;

 

provided, however, that in the case of
clauses (1) and (2) above, (i) such sale or other disposition is made to a
Person other than the Company, Parent or a

 

108

 

Subsidiary
Guarantor, (ii) such sale or disposition is otherwise permitted by this
Indenture and (iii) the Company provides an Officers’ Certificate to the
Trustee to the effect that the Company will comply with its obligations under
Section 4.06.

 

At the request of the Company, the Trustee shall execute and deliver an
appropriate instrument evidencing such release.

 

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

 

Article 12

Subordination of Guarantees

 

SECTION 12.01.           Agreement To Subordinate.  Each Guarantor agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by such Guarantor’s Guaranty is 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 Guarantor and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness.  The Obligations of a Guarantor shall in all
respects rank pari  passu with all other Senior Subordinated
Indebtedness of such Guarantor and only Senior Indebtedness of such Guarantor
(including such Guarantor’s Guaranty of Senior Indebtedness of the Company)
shall rank senior to the Obligations of such 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 Guarantor to creditors upon a total or
partial liquidation or a total or partial dissolution of such Guarantor or in a
bankruptcy, reorganization, insolvency,

 

109

 

receivership or similar proceeding relating to such Guarantor or its
property:

 

(1)                                  holders of Senior
Indebtedness of such Guarantor shall be entitled to receive payment in full in
cash of such Senior Indebtedness before Securityholders shall be entitled to
receive any payment pursuant to the Guaranty of such Guarantor;

 

(2)                                  until the Senior
Indebtedness of any Guarantor is paid in full, 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 Guarantor that are subordinated to such Senior Indebtedness to at least
the same extent as Guaranty;

 

(3)          if a distribution is
made to Holders of the Securities that, due to the subordination provisions,
should not have been made to them, such Holders of the Securities are required
to hold it in trust for the holders of Senior Indebtedness of the Company and
pay it over to them as their interests may appear.

 

SECTION 12.03.           Default on Senior Indebtedness of
Guarantor.  No Guarantor shall pay
its Guaranty or purchase, redeem or otherwise retire or defease any Securities
or other Obligations, and Parent shall not make any deposit pursuant to Section 8.01
(collectively, “pay its Guaranty”) if either of the following (a “Payment
Default”) occurs (a) any Obligation on any Designated Senior Indebtedness
of such Guarantor is not paid in full in cash when due; or (b) any other
default on Designated Senior Indebtedness of such Guarantor occurs and the
maturity of such Designated Senior Indebtedness is accelerated in accordance
with its terms; unless, in either case, the Payment Default has been cured or
waived and any such acceleration has been rescinded or such Designated Senior
Indebtedness has been paid in full in cash; provided, however,
that any Guarantor shall be entitled to pay its Guaranty without regard to the
foregoing if such Guarantor and the Trustee receive written notice approving
such payment from the Representative of any Designated Senior Indebtedness with
respect to which the Payment Default has occurred and is continuing.  During the continuance of any default (other
than a Payment Default)

 

110

 

with respect to any Designated Senior Indebtedness of such Guarantor
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, such Guarantor
shall not pay its Guaranty for a period (a “Payment Blockage Period”)
commencing upon the receipt by the Trustee of (with a copy to such Guarantor)
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.  The Payment Blockage Period shall end earlier if such Payment Blockage
Period is terminated (1) by written notice to the Trustee and such
Guarantor from the Person or Persons who gave such Blockage Notice;
(2) because the default giving rise to such Blockage Notice is cured,
waived or otherwise no longer continuing; or (3) because such Designated
Senior Indebtedness has been discharged or repaid in full in cash.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of
this Section), unless the holders of such Designated Senior Indebtedness giving
such Payment Notice or the Representative of such Designated Senior
Indebtedness shall have accelerated the maturity of such Designated Senior
Indebtedness, any Guarantor shall be entitled to resume payments pursuant to
its Guaranty, and Parent shall be entitled to make deposits pursuant to
Section 8.01, after termination of such Payment Blockage Period.  No Guarantor shall be subject to more than
one Blockage Period in any consecutive 360-day period irrespective of the
number of defaults with respect to Designated Senior Indebtedness of such
Guarantor 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 of such Guarantor (other than the
Bank Indebtedness), the Representative of the Bank Indebtedness shall be
entitled to give another Blockage Notice within such period; provided  further,
however, that in no event shall 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, and there must be
181 days during any 360-day consecutive period during which no Payment
Blockage Period is in effect.  For
purposes of this Section, no default or event of default which existed or was
continuing on the date of the commencement of any

 

111

 

Payment Blockage Period with respect to the Designated Senior
Indebtedness of such Guarantor initiating such Payment Blockage Period shall
be, or be made, the basis of the commencement of a subsequent Payment Blockage
Period by the Representative of such Designated Senior Indebtedness, whether or
not within a period of 360 consecutive days, unless such default or event
of default shall have been cured or waived for a period of not less than
90 consecutive days.

 

SECTION 12.04.           Demand for Payment.  If a demand for payment is made on a
Guarantor pursuant to Article 11, the Trustee shall promptly notify the
holders of the Designated Senior Indebtedness of such Guarantor (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 Senior Indebtedness of the applicable Guarantor and pay it over to them or
their Representatives as their interests may appear.

 

SECTION 12.06.           Subrogation.  After all Senior Indebtedness of a 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 of such Guarantor.  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 Guarantor and
Securityholders, a payment by such Guarantor on such Senior Indebtedness.

 

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

 

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

 

(2)                                  prevent the Trustee
or any Securityholder from exercising its available remedies upon a default by
such Guarantor under its Guaranty, subject to the

 

112

 

rights of
holders of Senior Indebtedness of such Guarantor to receive distributions
otherwise payable to Securityholders.

 

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

 

SECTION 12.09.           Rights of Trustee and Paying Agent.  Notwithstanding Section 12.03, the
Trustee or Paying Agent shall continue to make payments on any Guaranty 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
written notice satisfactory to it that such payments are prohibited by this
Article 12.  The Company, the relevant
Guarantor, the Registrar or co-registrar, the Paying Agent, a Representative or
a holder of Senior Indebtedness of such Guarantor shall be entitled to give the
notice; provided, however, that, if an issue of Senior
Indebtedness of any Guarantor has a Representative, only the Representative
shall be entitled to give the notice.

 

The Trustee in its individual or any other capacity shall be entitled
to hold Senior Indebtedness of any Guarantor 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 Guarantor which
may at any time be held by it, to the same extent as any other holder of such
Senior Indebtedness; and nothing in Article 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 any Person is to make a
distribution or give a notice to holders of Senior Indebtedness of any
Guarantor, such Person shall be entitled to make such distribution or give such
notice to their Representative (if any).

 

113

 

SECTION
12.11.           Article 12 Not To Prevent
Events of Default or Limit Right To Demand Payment.  The failure to make a payment pursuant to a
Guaranty by reason of any provision in this Article 12 shall not be
construed as preventing the occurrence of a Default.  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
Guarantor pursuant to its Guaranty.

 

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
(a) upon any order or decree of a court of competent jurisdiction in which
any proceedings of the nature referred to in Section 12.02 are pending,
(b) upon a certificate of the liquidating trustee or agent or other Person
making such payment or distribution to the Trustee or to the Securityholders or
(c) upon the Representatives for the holders of Senior Indebtedness of any
Guarantor for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of such Senior Indebtedness and
other indebtedness of such 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 Guarantor to participate in any payment or distribution pursuant to this
Article 12, the Trustee shall be entitled to request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness of such 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 shall be
entitled to defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.  The provisions of Sections 7.01 and 7.02 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

 

114

 

acknowledge or effectuate the subordination between the Securityholders
and the holders of Senior Indebtedness of any 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 Guarantor. 
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness of any Guarantor and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Securityholders or a
Guarantor 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.

 

SECTION 12.15.           Reliance by Holders of
Senior Indebtedness of Guarantors 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 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.           TIA 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.

 

115

 

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 Guarantor:

  
	
   

  
	
  Sensus Metering Systems Inc.

  
	
  8609 Six Forks Road

  
	
  Raleigh, NC  27615

  
	
  Phone:  (919) 870-3270

  
	
  Attention:  Corporate
  Secretary

  
	
   

  
	
  with a copy to:

  
	
   

  
	
  Mayer, Brown, Rowe & Maw LLP

  
	
  1675 Broadway

  
	
  New York, NY  10019

  
	
  Attention:  James B.
  Carlson

  
	
  Phone:  (212) 506-2500

  
	
   

  
	
  if to the Trustee:

  
	
   

  
	
  U.S. Bank National Association

  
	
  60 Livingston Avenue

  
	
  St. Paul, MN 55107-2292

  
	
  Phone (651) 495-3913

  
	
  Fax (651) 495-8097

  

 

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

 

Any notice or communication mailed to a 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 § 312(b) with other Securityholders with
respect to

 

116

 

their rights under this Indenture or the Securities.  The Company, each Guarantor, the Trustee,
the Registrar and anyone else shall have the protection of TIA § 312(c).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 13.06.           When 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

 

117

 

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 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.  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.

 

SECTION 13.10.           No Recourse
Against Others.  A director,
officer, employee or stockholder, as such, of the Company or any Guarantor
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or of such Guarantor under its Guaranty or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By
accepting a 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 signed copy shall be an original, but all of them together
represent the same agreement.  One
signed copy is enough to prove this Indenture.

 

118

 

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

 

SECTION 13.14              Consent
to Jurisdiction.  Parent,
the Company and the Subsidiary Guarantors hereby submit to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Indenture or the transactions contemplated hereby.

 

119

 

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

 

	
   

  	
  SENSUS
  METERING SYSTEMS INC.,
a Delaware Corporation,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

 

	
  
[AFFIX SEAL HERE]

  	
  The Common Seal  of

  SENSUS METERING SYSTEMS (BERMUDA 2)
  LTD.,

  a Bermuda Exempted Company, as Parent, was affixed hereto in the
  presence of:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

 

	
   

  	
  INVENSYS
  METERING

  HEADQUARTERS CORP.
 (to be renamed Sensus

  Metering Headquarters Corp.)

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

 

	
   

  	
  SMITH-BLAIR,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

120

 

	
   

  	
  INVENSYS
  METERING SYSTEMS

  NORTH AMERICA INC.
(to be renamed Sensus

  Metering Systems-North America Inc.)

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

 

	
   

  	
  INVENSYS
  PRECISION DIE

  CASTING INC.
(to be renamed Sensus

  Precision Die Casting Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

 

	
   

  	
  SENSUS
  METERING SYSTEMS IP

  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

 

	
   

  	
  M&FC HOLDING COMPANY LLC,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

121

 

	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION,
as Trustee,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

122

 

RULE 144A/REGULATION S/IAI APPENDIX

 

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:

 

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

 

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

 

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

 

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

 

“Exchange Securities” means (1) the
85/8% Senior SubordinatedNotes Due 2013 issued pursuant to the Indenture in connection
with a Registered Exchange Offer
pursuant to a Registration
Rights Agreement and
(2) Additional Securities, if any, offered and sold by the Company
pursuant to a registration statement filed with the SEC under the Securities Act.

 

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

 

 

“Initial Purchasers”
means (1) with respect to the
Initial Securities issued on the Issue Date,  Credit
Suisse First Boston LLC and Goldman, Sachs & Co. and (2) with respect to each issuance of
Additional Securities, the Persons purchasing or underwriting such Additional
Securities under the related Purchase Agreement.

 

“Initial Securities” means
(1) $275,000,000 aggregate principal amount of 85/8% Senior Subordinated Notes Due 2013
issued on the Issue Date and (2) Additional Securities, if any, offered
and sold by the Company in a transaction exempt from the registration
requirements of the Securities Act.

 

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

 

“Private Exchange Securities” means any 85/8% Senior Subordinated Notes Due 2013 issued
in connection with a Private Exchange.

 

“Purchase Agreement” means (1) with
respect to the Initial Securities issued on the Issue Date, the Purchase
Agreement dated December 11, 2003, among the Company, the Guarantors and
the Initial Purchasers and (2) with respect to each issuance of Additional
Securities, the purchase agreement or underwriting agreement among the Company,
the Guarantors and the Persons purchasing or underwriting such Additional
Securities.

 

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

 

“Registered Exchange Offer” means the offer by the Company, pursuant to
a Registration Rights Agreement,
to certain Holders of Initial 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 (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated December 17, 2003,

 

2

 

among the Company, the
Guarantors and the Initial Purchasers and (2) with respect to each
issuance of Additional Securities issued in a transaction exempt from the
registration requirements of the Securities Act, the registration rights
agreement, if any, among the Company, the Guarantors and the Persons purchasing
such Additional Securities under the related Purchase Agreement.

 

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

 

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

 

“Securities Act” means the Securities Act of 1933.

 

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

 

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

 

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

 

3

 

1.2                                 Other
Definitions

 

	
  Term

  	
   

  	
  Defined

  in Section:

  
	
  “Agent Members”

  	
   

  	
  2.1(b)

  
	
  “Global Securities”

  	
   

  	
  2.1(a)

  
	
  “IAI Global Security

  	
   

  	
  2.1(a)

  
	
  “Permanent Regulation S Global Security

  	
   

  	
  2.1(a)

  
	
  “Regulation S”

  	
   

  	
  2.1(a)

  
	
  “Regulation S Global Security”

  	
   

  	
  2.1(a)

  
	
  “Rule 144A”

  	
   

  	
  2.1(a)

  
	
  “Rule 144A Global Security”

  	
   

  	
  2.1(a)

  
	
  “Temporary Regulation S Global Security”

  	
   

  	
  2.1(a)

  

 

 

2.                                       The
Securities.

 

2.1                                 (a)  Form
and Dating.  The Initial Securities
will be offered and sold by the Company pursuant to a Purchase Agreement.  The Initial Securities will be resold
initially only to (i) QIBs in reliance on Rule 144A under the
Securities Act (“Rule 144A”) and (ii) Persons other than U.S. Persons
(as defined in Regulation S) in reliance on Regulation S under the Securities
Act (“Regulation S”).   Initial Securities may thereafter be transferred to, among others,
QIBs, IAIs and purchasers in reliance on Regulation S, subject to the
restrictions on transfer set forth herein. 
Initial Securities initially resold pursuant to Rule 144A shall be
issued initially in the form of one or more permanent global Securities in definitive,
fully registered form (collectively, the “Rule 144A Global Security”); Initial
Securities initially resold to IAIs shall be issued initially in the form of
one or more permanent global Securities in definitive, fully registered form
(collectively, the “IAI Global Security”); and Initial Securities initially
resold pursuant to Regulation S shall be issued initially in the form of one or
more temporary global securities in fully registered form (collectively, the
“Temporary Regulation S Global Security”), in each case without interest
coupons and with the global securities legend and the applicable restricted
securities legend set forth in Exhibit 1 hereto, which shall be deposited
on behalf of the purchasers of the Initial Securities represented thereby with
the Securities Custodian and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by
the Trustee as provided in this Indenture. 
Except as set forth in this Section 2.1(a), beneficial

 

4

 

ownership interests in the Temporary Regulation S Global Security will
not be exchangeable for interests in the Rule 144A Global Security, the IAI
Global Security, a permanent global security (the “Permanent Regulation S
Global Security”, and together with the Temporary Regulation S Global Security,
the “Regulation S Global Security”) or any other Security prior to the
expiration of the Distribution Compliance Period and then, after the expiration
of the Distribution Compliance Period, may be exchanged for interests in a
Rule 144A Global Security, an IAI Global Security or the Permanent
Regulation S Global Security only upon certification in form reasonably
satisfactory to the Trustee that (i) beneficial ownership interests in
such Temporary Regulation S Global Security are owned either by non-U.S.
persons or U.S. persons who purchased such interests in a transaction that did
not require registration under the Securities Act and (ii) in the case of
an exchange for an IAI Global Security, certification that the interest in the
Temporary Regulation S Global Security is being transferred to an institutional
“accredited investor” under the Securities Act that is an institutional
accredited investor acquiring the securities for its own account or for the
account of an institutional accredited investor.

 

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

 

Beneficial interests in Temporary Regulation S Global Securities and
Rule 144A Global Securities may be exchanged for an interest in IAI Global
Securities if (1) such exchange occurs in connection with a transfer of

 

5

 

the securities in compliance
with an exemption under the Securities Act and (2) the transferor of the
Regulation S Global Security or Rule 144A Global Security, as applicable, first
delivers to the trustee a written certificate (substantially in the form of
Exhibit 2) to the effect that (A) the Regulation S Global Security or
Rule 144A Global Security, as applicable, is being transferred (a) to an
“accredited investor” within the meaning of 501(a) (1), (2), (3) or (7) under
the Securities Act that is an institutional investor acquiring the securities
for its own account or for the account of such an institutional accredited
investor, in each case in a minimum principal amount of Securities of $250,000,
for investment purposes and not with a view to or for offer or sale in
connection with any distribution in violation of the Securities Act and
(B) in accordance with all applicable securities laws of the States of the
United States and other jurisdictions.

 

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

 

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

 

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

 

6

 

to such Depository or pursuant
to such Depository’s instructions or held by the Trustee as custodian for the Depository.

 

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

 

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

 

2.2                                 Authentication.  The
Trustee shall authenticate and deliver: 
(1) on the Issue Date, an aggregate principal amount of
$275,000,000 85/8%
Senior Subordinated Notes Due
2013, (2) any Additional Securities for an original issue in an aggregate
principal amount specified in the written order of the Company pursuant to
Section 2.02 of the Indenture  and
(3) Exchange Securities or
Private Exchange Securities for issue only in a Registered Exchange Offer or a
Private Exchange, respectively, pursuant to a Registration Rights Agreement,
for a like principal amount of Initial 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,
in the case of any issuance of Additional Securities pursuant to
Section 2.13 of the Indenture, shall certify that such issuance is in
compliance with Section 4.03 of the Indenture.

 

7

 

2.3                                 Transfer
and Exchange.

 

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

 

(x)                                   to register the
transfer of such Definitive Securities; or

 

(y)                                 to exchange such
Definitive Securities for an equal principal amount of Definitive Securities of
other authorized denominations,

 

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

 

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

 

(ii) if such Definitive Securities are
required to bear a restricted securities legend, they are being transferred or
exchanged pursuant to an effective registration statement under the Securities
Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below,
and are accompanied by the following additional information and documents, as
applicable:

 

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

 

if such Definitive Securities are being
transferred to the Company, a certification to that effect; or

 

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

 

8

 

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

 

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

 

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

 

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

 

then the Trustee shall cancel such Definitive Security and cause, or
direct the Securities Custodian to cause, in

 

9

 

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

 

(c) Transfer and Exchange of Global
Securities.

 

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

 

(ii) If the proposed transfer is a transfer
of a beneficial interest in one Global Security to a beneficial interest in
another Global Security, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global Security to
which such interest is being

 

10

 

transferred in an amount equal to the principal amount of the interest
to be so transferred, and the Registrar shall reflect on its books and records
the date and a corresponding decrease in the principal amount of the Global
Security from which such interest is being transferred.

 

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

 

(iv) In the event that a Global Security is
exchanged for Definitive Securities pursuant to Section 2.4 of this Appendix,
prior to the consummation of a Registered Exchange Offer or the effectiveness
of a Shelf Registration Statement with respect to such 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 Securities intended
to ensure that such transfers comply with Rule 144A, Regulation S or
another applicable exemption under the Securities Act, as the case may be) and
such other procedures as may from time to time be adopted by the Company.

 

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

 

11

 

(e) Legend.

 

(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), in the case
of Securities offered otherwise than in reliance on Regulation S, 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, AS AMENDED (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 THE COMPANY, (II) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (III) TO AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE
SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE SECURITIES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF SECURITIES OF $250,000,
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,

 

12

 

(IV) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (V) PURSUANT TO
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI), 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.

 

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

 

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

 

Each Definitive Security shall also bear the following additional
legend:

 

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

 

(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted Security represented by
a Global Security) pursuant to Rule 144 under the Securities Act, the Registrar
shall permit the transferee thereof to exchange such

 

13

 

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 transferor thereof certifies in
writing to the Registrar that such sale or transfer was made in reliance on
Rule 144 (such certification to be in the form set forth on the reverse of
the Security).

 

(iii) After a transfer of any Initial Securities
or Private Exchange Securities pursuant to and 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 be issued
in global form will cease to apply, and a certificated Initial Security or
Private Exchange Security or an Initial Security or Private Exchange Security
in global form, in each case without restrictive transfer 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, all requirements pertaining to
such Initial Securities that Initial Securities issued to certain Holders be
issued in global form will still apply with respect to Holders of such Initial
Securities that do not exchange their Initial Securities, and Exchange
Securities in certificated or global form, in each case without the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Securities in such Registered Exchange
Offer.

 

(v) Upon the consummation of a Private
Exchange with respect to the Initial Securities, all requirements pertaining to
such Initial Securities that Initial Securities issued to certain Holders be
issued in global form will still apply with respect to

 

14

 

Holders of such Initial Securities that do not exchange their Initial
Securities, and Private Exchange Securities in global form with the global
securities legend and the applicable restricted securities legend set forth in
Exhibit 1 hereto will be available to Holders that exchange such Initial
Securities in such Private Exchange.

 

(f) Cancellation or Adjustment of Global Security.  At such time as all beneficial interests in
a Global Security have either been exchanged for Definitive Securities,
redeemed, purchased or canceled, such Global Security shall be returned to the
Depository for cancellation or retained and canceled by the Trustee.  At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for Definitive
Securities, redeemed, purchased 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.

 

(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 Depository or other Person with respect to the accuracy of
the records of the Depository or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Securities or with
respect to the delivery to any participant, member, beneficial owner or other
Person (other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Securities.  All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Securities shall be given or made only to or upon the order
of the registered Holders (which shall be the Depository 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
Depository subject to the applicable rules and procedures of the
Depository.  The Trustee may rely and
shall be fully protected in relying upon information furnished by the

 

15

 

Depository with respect to its members, participants and any beneficial
owners.

 

(ii) The Trustee shall have no obligation or
duty to monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers between
or among Depository 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 Depository or with the Trustee as Securities
Custodian for the Depository pursuant to Section 2.1 shall be transferred
to the beneficial owners thereof in the form of Definitive Securities in an
aggregate principal amount equal to the principal amount of such Global
Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 hereof and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security and the Depository fails to appoint a successor depository or if at
any time such Depository ceases to be a “clearing agency” registered under the
Exchange Act and, in either case, a successor Depository is not appointed by
the Company within 90 days of such notice, 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 Definitive Securities under this Indenture.

 

(b)                                 Any Global Security that is
transferable to the beneficial owners thereof pursuant to this Section 2.4
shall be surrendered by the Depository to the Trustee located at its principal
corporate trust office in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without charge, and the Trustee
shall authenticate and deliver, upon such transfer of each portion of such
Global Security,

 

16

 

an equal aggregate principal
amount of Definitive Securities of authorized denominations.  Any portion of a Global Security transferred
pursuant to this Section 2.4 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 Depository shall direct.  Any Definitive Security delivered in
exchange for an interest in the Transfer Restricted Security shall, except as
otherwise provided by Section 2.3(e) hereof, bear the applicable
restricted securities legend and definitive note legend set forth in Exhibit 1
hereto.

 

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

 

(d)                                 In
the event of the occurrence of one of the events specified in
Section 2.4(a) hereof, the Company shall promptly make available to the
Trustee a reasonable supply of Definitive Securities in definitive, fully
registered form without interest coupons. 
In the event that the Definitive Securities are not issued to each such
beneficial owner promptly after the Registrar has received a request from the
Holder of a Global Security to issue such Certificated Security, the Company
expressly acknowledges, with respect to the right of any Holder to pursue a
remedy pursuant to Article 6 of the Indenture, the right of any beneficial
Holder of Securities to pursue such remedy with respect to the portion of the
Global Security that represents such beneficial Holder’s Securities as if such
Certificated Securities had been issued.

 

17

 

EXHIBIT 1

to

RULE 144A/REGULATION S/IAI 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.

 

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

 

[Restricted Securities Legend for Securities

Offered Otherwise than in Reliance on Regulation S]

 

THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS 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 THE COMPANY, (II) WITHIN THE UNITED STATES
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (III) TO AN “ACCREDITED INVESTOR”
WITHIN THE MEANING OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT
THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE
IN A MINIMUM PRINCIPAL AMOUNT OF SECURITIES OF $250,000, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,(IV) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (V) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR
(VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (I) THROUGH (VI) 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.

 

[Restricted Securities Legend for Securities
Offered in Reliance on Regulation S.]

 

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

 

[Temporary Regulation S Global Security
Legend]

 

EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY

 

2

 

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

 

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

 

AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL
INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE EXCHANGED FOR
INTERESTS IN AN IAI GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE OCCURS

 

3

 

IN CONNECTION WITH A TRANSFER
OF THE SECURITIES IN COMPLIANCE WITH AN EXEMPTION UNDER THE SECURITIES ACT AND
(2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST DELIVERS TO THE
TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE
EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO AN
“ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1),(2),(3) OR (7) UNDER
THE SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE SECURITIES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF SECURITIES OF $250,000,
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.

 

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

 

[Definitive Securities Legend]

 

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

 

4

 

	
  No.                  

  	
   

  	
  $                  

  

 

85/8%
Senior Subordinated Notes Due
2013

 

Sensus Metering Systems Inc., a Delaware corporation, promises to pay
to or registered assigns, the principal sum of
            Dollars
on December 15, 2013.

 

Interest Payment Dates:  June 15
and December 15.

 

Record Dates:                     June
1 and December 1.

 

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

 

Dated: 

 

	
   

  	
  SENSUS METERING SYSTEMS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
					

 

 

	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  	
   

  	 

	
   

  	
   

  	 

	
  U.S. BANK
  NATIONAL ASSOCIATION

  	
   

  	 

	
  as Trustee,certifies 

  that this is one of

  the Securities referred

  to in the Indenture.

  	
   

  	 

	
   

  	
   

  	 

	
  By

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   Authorized Signatory

  	
   

  	 

	
   

  	
   

  	 

						

 

5

 

[FORM OF REVERSE SIDE OF INITIAL SECURITY]

 

85/8  %
Senior Subordinated Note Due
2013

 

1.                                       Interest

 

Sensus Metering Systems 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 0.25% per annum (increasing
by an additional 0.25% per annum after each consecutive 90-day period that
occurs after the date on which such Registration default occurs up to a maximum
additional interest rate of 1.00%) 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 June 15, 2004. 
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 December
17, 2003.  Interest will be computed on
the basis of a 360-day year of twelve 30-day months.

 

2.                                       Method
of Payment

 

The Company will pay interest on the 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 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.  The Company will make all payments in
respect of a certificated Security (including principal, premium and interest)
by mailing a check to the registered

 

6

 

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

 

4.                                       Indenture

 

The Company issued the Securities under an Indenture dated as of
December 17, 2003 (the “Indenture”), among
the Company, the 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.
§§ 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.  The Company shall be entitled, subject to its
compliance with Section 4.03 of the Indenture, to issue Additional
Securities pursuant to Section 2.13 of the Indenture.  The Initial Securities issued on the Issue
Date, any Additional Securities and all Exchange Securities or Private
Exchange Securities issued in exchange therefor will be treated as a single
class for all purposes under the Indenture. 
The Indenture contains covenants that limit the ability of Parent, the
Company and the Restricted Subsidiaries to incur additional indebtedness; pay
dividends or distributions on, or redeem or repurchase capital stock; make
investments; engage in transactions

 

7

 

with affiliates; transfer or
sell assets; guarantee indebtedness; restrict dividends or other payments of
the Restricted Subsidiaries; and consolidate, merge or transfer all or
substantially all of its assets and the assets of the Restricted
Subsidiaries.  These covenants are
subject to important exceptions and qualifications.

 

5.                                       Optional
Redemption

 

Except as set forth below, the Company shall not be entitled to redeem
the Securities.

 

Prior to December 15, 2008, the Company shall be entitled at its
option to redeem all, but not less than all, of the Securities at a redemption
price equal to 100% of the principal amount of the Securities plus the
Applicable Premium as of, and accrued and unpaid interest to, the redemption
date (subject to the right of Holders on the relevant record date to receive
interest due on the relevant interest payment date).  The Company shall cause notice of such redemption to be mailed by
first-class mail to each Holder’s registered address, not less than 30 nor more
than 60 days prior to the redemption date.

 

On and after December 15, 2008, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days’ notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on December 15 of the
years set forth below:

 

	
  Period

  	
   

  	
  Redemption

  Price

  	
   

  
	
  2008

  	
   

  	
  104.313

  	
  %

  
	
  2009

  	
   

  	
  102.875

  	
  %

  
	
  2010

  	
   

  	
  101.438

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, prior to December 15, 2006, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes Additional Securities, if
any) in an aggregate principal amount not to exceed 35% of the aggregate
principal amount  of the

 

8

 

Securities (which includes Additional Securities, if
any) originally issued at a redemption price (expressed as a percentage
of principal amount) of 108.625%, plus accrued and unpaid 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),
with the net cash proceeds received by the Company or Parent from one or more
Equity Offerings (provided that if the Equity Offering is an offering by Parent,
a portion of the Net Cash Proceeds thereof equal to the amount required to
redeem any such Notes is contributed to the equity capital of the Company); provided,
however, that (1) at least 65% of such aggregate principal amount
of Securities (which includes
Additional Securities, if any) remains outstanding immediately after the
occurrence of each such redemption (other than Securities held, directly or
indirectly, by the Company); and
(2) each such redemption occurs within 60 days after the date of the
related Equity Offering.

 

6.                                       Notice
of Redemption

 

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

 

9

 

8.                                       Subordination

 

The Securities and the Guarantees are subordinated to Senior
Indebtedness of the Company,
Parent and the relevant Subsidiary Guarantor as defined in the Indenture.  To the extent provided in the Indenture,
Senior Indebtedness of the Company, Parent
and the relevant Subsidiary Guarantor must be paid before the Securities or the
Guarantees may be paid.  Each of the
Company and the Guarantors agree, 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.                                       Guaranty

 

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

 

10.                                 Denominations;  Transfer; 
Exchange

 

The Securities are in registered form without coupons in denominations
of $1,000 principal amount and whole multiples of $1,000.  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.

 

10

 

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, Parent and the Company at any time shall
be entitled to terminate some or all of their and the Subsidiary Guarantors’
obligations under the Securities and the Indenture if Parent or 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, (a) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the
Securities and (b) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal
amount outstanding of the Securities. 
Subject to certain exceptions set forth in the Indenture, without the
consent of any Securityholder, the Company, Parent,  the
Subsidiary Guarantors and the Trustee shall be entitled to 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, including
Subsidiary Guarantees, or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company or any Guarantor, 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, or to make changes in the form, authentication, transfer or
legending of the Securities.

 

11

 

15.                                 Defaults
and Remedies

 

Under the Indenture, Events of Default include (a) default for
30 days in payment of interest on the Securities; (b) 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; (c) failure
by the Company, Parent or any Subsidiary Guarantor to comply with other
agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (d) certain accelerations (including failure to
pay within any grace period after final maturity) of other Indebtedness of the
Company, Parent, the Subsidiary Guarantors or any Significant Subsidiary if the
amount accelerated (or so unpaid) exceeds $20.0 million; (e) certain
events of bankruptcy or insolvency with respect to Parent, the Company,
Subsidiary Guarantors and the Significant Subsidiaries; (f) certain
judgments or decrees for the payment of money in excess of $20.0 million;
and  (g) certain defaults with respect to Guarantees.  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.  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 indemnity or security satisfactory to it.  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

 

12

obligations owed to it by the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.

 

17.                                 No
Recourse Against Others

 

No past, present or future director, officer, employee or stockholder,
as such, of the Company, Parent, any Subsidiary Guarantor or the Trustee shall
have any liability for any obligations of the Company, Parent or any Subsidiary
Guarantor under the Securities, the Indenture, the Parent Guaranty or any
Subsidiary Guaranty 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).

 

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.

 

13

 

 

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 the
obligations of the Holders with respect to a registration and the
indemnification of the Company and the Guarantors 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.

 

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:

	
  Sensus Metering Systems Inc.

  8609 Six Forks Road

  Raleigh, NC  27615

  
	
   

  
	
  Attention:   Corporate
  Secretary

  

 

14

 

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.

 

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)                                  to
the Company; or

 

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

 

(3)                                  inside the United
States to a “qualified institutional buyer” (as defined in Rule 144A under
the Securities Act of 1933) that purchases for its own account or for

 

15

 

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)                                  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;

 

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

 

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

 

Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; provided, however, that
if box (4), (5) or (6) is checked, the Trustee shall be entitled to 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.

 

	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

 

16

 

	
  Signature Guarantee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature must be guaranteed

  	
  Signature

  
				

 

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

 

17

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notice:To be executed by an executive officer

  

 

18

 

[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

  	
   

  

 

19

 

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: 
$                             

 

	
  Dated:

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign
  exactly as your

  name appears on the

  other side of this

  Security.)

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must be guaranteed)

  

 

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

 

20

 

EXHIBIT A

 

FORM OF FACE OF EXCHANGE SECURITY

OR PRIVATE EXCHANGE SECURITY*/**/

 

*/ [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.]

 

 

No.                            $
       

 

85/8  %
Senior Subordinated Notes Due
2013

 

Sensus Metering Systems, Inc., a Delaware corporation,
promises to pay to
          , or registered
assigns, the principal sum of
                      
Dollars on December 15, 2013.

 

Interest
Payment Dates:  June 15 and December 15.

 

Record
Dates:  June 1 and December 1.

 

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

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  SENSUS
  METERING SYSTEMS INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
						

 

 

	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  	
   

  	 

	
   

  	
   

  	 

	
  U.S. BANK
  NATIONAL ASSOCIATION

  	
   

  	 

	
  as Trustee,certifies 

  that this is one of

  the Securities referred

  to in the Indenture.

  	
   

  	 

	
   

  	
   

  	 

	
  By

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   Authorized Signatory

  	
   

  	 

	
   

  	
   

  	 

						

 

 

 

FORM OF REVERSE SIDE OF EXCHANGE SECURITY

OR PRIVATE EXCHANGE SECURITY

 

85/8  %
Senior Subordinated Note Due
2013

 

1.                                       Interest

 

Sensus Metering Systems 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 0.25% per annum (increasing by an additional
0.25% per annum after each consecutive 90-day period that occurs after the date
on which such Registration default occurs up to a maximum additional interest
rate of 1.00%) from and including the date on which any such Registration
Default shall occur to but excluding the date on which all Registration
Defaults have been cured](1)   The Company will pay interest semiannually
on June 15 and December 15 of each year, commencing June 15, 2004.  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 December 17, 2003. 
Interest will be computed on the basis of a 360-day year of twelve
30-day months.

 

2.                                       Method
of Payment

 

The Company
will pay interest on the 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 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,

 

(1)     To be deleted if no Default existed in the
interest payment period prior to issuance of Exchange Note.

 

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

 

4.                                       Indenture

 

The Company
issued the Securities under an Indenture dated as of December 17, 2003
(the “Indenture”), among the
Company, the Parent Guarantor
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.
§§ 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.  The Company shall be entitled, subject to its
compliance with Section 4.03 of the Indenture, to issue Additional
Securities pursuant to Section 2.13 of the Indenture.  The Initial Securities issued on the Issue
Date, any Additional Securities and all Exchange Securities or Private
Exchange Securities issued in exchange therefor will be treated as a single
class for all purposes under

 

the Indenture.  The Indenture
contains covenants that limit the ability of Parent, the Company and the
Restricted Subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments;
issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; transfer or sell assets; guarantee indebtedness; restrict dividends
or other payments of the Restricted Subsidiaries; and consolidate, merge or
transfer all or substantially all of its assets and the assets of its the Restricted
Subsidiaries.  These covenants are
subject to important exceptions and qualifications.

 

5.                                       Optional
Redemption

 

Except as set
forth below, the Company shall not be entitled to redeem the Securities.

 

Prior to
December 15, 2008, the Company shall be entitled at its option to redeem all,
but not less than all, of the Securities at a redemption price equal to 100% of
the principal amount of the Securities plus the Applicable Premium as of, and
accrued and unpaid interest to, the redemption date (subject to the right of
Holders on the relevant record date to receive interest due on the relevant
interest payment date).  The Company
shall cause notice of such redemption to be mailed by first-class mail to each
Holder’s registered address, not less than 30 nor more than 60 days prior to
the redemption date.

 

On and after
December 15, 2008, the Company shall be entitled at its option to redeem all or
a portion of the Securities upon not less than 30 nor more than 60 days’
notice, at the redemption prices (expressed in percentages of principal amount,
on the redemption date) plus accrued interest to the redemption date (subject
to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date), if redeemed during the
12-month period commencing on December 15 of the years set forth below:

 

	
  Period

  	
   

  	
  Redemption
  Price

  	
   

  
	
  2008

  	
   

  	
  104.313

  	
  %

  
	
  2009

  	
   

  	
  102.875

  	
  %

  
	
  2010

  	
   

  	
  101.438

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

 

In addition, prior to December 15, 2006, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes Additional Securities, if
any) in an aggregate principal amount not to exceed 35% of the aggregate
principal amount of the Securities (which
includes Additional Securities, if any) originally issued at a
redemption price (expressed as a percentage of principal amount of 108.625%,
plus accrued and unpaid 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), with the net cash proceeds received by the
Company or Parent from one or more Equity Offerings (provided that if the
Equity Offering is an offering by Parent, a portion of the Net Cash Proceeds
thereof equal to the amount required to redeem any such Notes is contributed to
the equity capital of the Company); provided, however, that
(1) at least 65% of such aggregate principal amount of Securities (which includes Additional Securities, if
any) remains outstanding immediately after the occurrence of each such
redemption (other than Securities held, directly or indirectly, by the Company); and (2) each such redemption occurs
within 60 days after the date of the related Equity Offering.

 

6.                                       Notice
of Redemption

 

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

 

8.                                       Subordination

 

The Securities
and the Guarantees are subordinated to Senior Indebtedness of the Company, Parent and the
relevant Subsidiary Guarantor as defined in the Indenture.  To the extent provided in the Indenture,
Senior Indebtedness of the Company,
Parent and the relevant Subsidiary Guarantor must be paid before the Securities
or the Guarantees may be paid.  Each of
the Company and the Guarantors 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.                                       Guaranty

 

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

 

10.                                 Denominations;
Transfer; Exchange

 

The Securities
are in registered form without coupons in denominations of $1,000 principal
amount and whole multiples of $1,000.  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.

 

 

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, Parent and the Company at any time shall be entitled to
terminate some or all of their and the Subsidiary Guarantors’ obligations under
the Securities and the Indenture if Parent or 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, (a) the Indenture and the
Securities may be amended with the written consent of the Holders of at least a
majority in principal amount outstanding of the Securities and (b) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities.  Subject to certain
exceptions set forth in the Indenture, without the consent of any Securityholder,
the Company, Parent, the Subsidiary Guarantors  and the Trustee shall be entitled
to 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, including
Subsidiary Guarantees, or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company or any Guarantor, 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, or to make changes in the form, authentication, transfer or
legending of the Securities.

 

 

15.                                 Defaults
and Remedies

 

Under the
Indenture, Events of Default include (a) default for 30 days in
payment of interest on the Securities; (b) 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; (c) failure by the Company,
Parent or any Subsidiary Guarantor to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (d) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company, Parent, the
Subsidiary Guarantors or any Significant Subsidiary if the amount accelerated
(or so unpaid) exceeds $20.0 million; (e) certain events of
bankruptcy or insolvency with respect to Parent, the Company, Subsidiary
Guarantors and the Significant Subsidiaries; (f) certain judgments or decrees
for the payment of money in excess of $20.0 million; and (g) certain defaults with respect to
Subsidiary Guarantees.  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. 
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 indemnity or
security satisfactory to it.  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 and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.

 

17.                                 No
Recourse Against Others

 

No past,
present or future director, officer, employee or stockholder, as such, of the
Company, Parent, any Subsidiary Guarantor or the Trustee shall have any
liability for any obligations of the Company, Parent or any Subsidiary
Guarantor under the Securities, the Indenture, the Parent Guaranty or any
Subsidiary Guaranty 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).

 

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 the obligations of the Holders
with respect to a registration and the indemnification of the Company and the
Guarantors to the extent provided therein.](2)

 

22.                                 Governing
Law

 

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

 

The Company will furnish to any 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:

 

	
  Sensus Metering Systems Inc.

  8609 Six Forks Road

  Raleigh, NC  27615

  
	
   

  
	
  Attention:  Corporate
  Secretary

  

 

(2)     Delete if this Security is not being issued
in exchange for an Initial Security.

 

 

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.

 

 

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: 
$               

 

	
  Dated:

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign
  exactly as your

  name appears on the

  other side of this

  Security.)

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must be guaranteed)

  
							

 

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

 

 

EXHIBIT 2
TO RULE 144A/REGULATION S/IAI APPENDIX

 

Form of Transferee Letter of Representation

 

Sensus Metering Systems Inc.

8609 Six Forks Road

Raleigh, NC  27615

 

In care of

 

[                      ]

 

Ladies and Gentlemen:

 

This
certificate is delivered to request a transfer of
$[                    ]
principal amount of the 85/8%
Senior Subordinated Notes Due 2013 (the “Securities”) of Sensus Metering
Systems Inc. (the “Company”).

 

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

 

Name:                                                                               

 

Address:                                                                               

 

Taxpayer ID
Numbers:                                                                               

 

The
undersigned represents and warrants to you that:

 

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

 

 

2.                                       We understand
that the Securities have not been registered under the Securities Act and,
unless so registered, may not be sold except as permitted in the following
sentence.  We agree on our own behalf
and on behalf of any investor account for which we are purchasing Securities to
offer, sell or otherwise transfer such Securities prior to the date that is two
years after the later of the date of original issue and the last date on which
the Company or any affiliate of the Company was the owner of such Securities
(or any predecessor thereto) (the “Resale Restriction Termination Date”) only
(i) to the Company, (ii) in the United States to a person whom the seller
reasonably believes is a qualified institutional buyer in a transaction meeting
the requirements of Rule 144A, (iii) to an institutional “accredited investor”
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities
Act that is an institutional accredited investor purchasing for its own account
or for the account of an institutional accredited investor, in each case in a
minimum principal amount of the Securities of $250,000, (iv) outside the United
States in a transaction complying with the provisions of Rule 904 under the
Securities Act, (v) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if available) or (vi) pursuant to an
effective registration statement under the Securities Act, in each of cases (i)
through (vi) subject to any requirement of law that the disposition of our
property or the property of such investor account or accounts be at all times
within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. 
If any resale or other transfer of the Securities is proposed to be made
pursuant to clause (iii) above prior to the Resale Restriction Termination
Date, the transferor shall deliver a letter from the transferee substantially
in the form of this letter to the Company and the Trustee, which shall provide,
among other things, that the transferee is an institutional “accredited
investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act and that it is acquiring such Securities for investment purposes
and not for distribution in violation of the Securities Act. Each purchaser
acknowledges that the Company and the Trustee reserve the right prior to the
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the Securities pursuant to clause (iii), (iv) or (v) above to require the
delivery of

 

 

an opinion of
counsel, certifications or other information satisfactory to the Company and
the Trustee.

 

	
   

  	
  TRANSFEREE:

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

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