Document:

Exhibit 4.1

 

Execution Copy

 

 

 

FESTIVAL FUN PARKS, LLC,

 

PALACE FINANCE, INC.,

 

PALACE ENTERTAINMENT
HOLDINGS, INC.,

 

THE SUBSIDIARY
GUARANTORS PARTIES HERETO,

 

AND

 

WELLS FARGO BANK, N.A.,

 

as Trustee

 

 

10 7/8% Senior Notes due
2014

 

 

 

INDENTURE

 

 

Dated as of April 12,
2006

 

 

 

 

CROSS-REFERENCE TABLE

 

	
  TIA

  Section

  	
   

  	
  Indenture

  Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.3; 7.8; 7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.5

  
	
  (b)

  	
   

  	
  11.3

  
	
  (c)

  	
   

  	
  11.3

  
	
  313(a)

  	
   

  	
  7.6

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  7.6

  
	
  (c)

  	
   

  	
  7.6

  
	
  (d)

  	
   

  	
  7.6

  
	
  314(a)

  	
   

  	
  3.21; 11.5

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  11.4

  
	
  (c)(2)

  	
   

  	
  11.4

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  11.5

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.1

  
	
  (b)

  	
   

  	
  7.5; 11.2

  
	
  (c)

  	
   

  	
  7.1

  
	
  (d)

  	
   

  	
  7.1

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a)(last sentence)

  	
   

  	
  11.6

  
	
  (a)(1)(A)

  	
   

  	
  6.5

  
	
  (a)(1)(B)

  	
   

  	
  6.4

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.7

  
	
  (c)

  	
   

  	
  9.4

  
	
  317(a)(1)

  	
   

  	
  6.8

  
	
  (a)(2)

  	
   

  	
  6.9

  
	
  (b)

  	
   

  	
  2.4

  
	
  318(a)

  	
   

  	
  11.1

  

 

N.A.
means Not Applicable.

 

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

 

i

 

TABLE OF CONTENTS

 

	
  ARTICLE I
  Definitions and Incorporation by Reference

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.2

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
  33

  
	
   

  	
   

  	
   

  
	
  SECTION 1.3

  	
  Rules of Construction

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II The Notes

  	
  35

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
  Form, Dating
  and Terms

  	
  35

  
	
   

  	
   

  	
   

  
	
  SECTION 2.3

  	
  Execution
  and Authentication

  	
  43

  
	
   

  	
   

  	
   

  
	
  SECTION 2.4

  	
  Registrar
  and Paying Agent

  	
  44

  
	
   

  	
   

  	
   

  
	
  SECTION 2.5

  	
  Paying Agent
  To Hold Money in Trust

  	
  45

  
	
   

  	
   

  	
   

  
	
  SECTION 2.6

  	
  Holder Lists

  	
  45

  
	
   

  	
   

  	
   

  
	
  SECTION 2.7

  	
  Transfer and
  Exchange

  	
  45

  
	
   

  	
   

  	
   

  
	
  SECTION 2.8

  	
  Reserved

  	
  48

  
	
   

  	
   

  	
   

  
	
  SECTION 2.9

  	
  Form of
  Certificate to be Delivered in Connection with Transfers to Institutional
  Accredited Investors

  	
  48

  
	
   

  	
   

  	
   

  
	
  SECTION 2.10

  	
  Form of
  Certificate to be Delivered in Connection with Transfers Pursuant to
  Regulation S

  	
  50

  
	
   

  	
   

  	
   

  
	
  SECTION 2.11

  	
  Mutilated,
  Destroyed, Lost or Stolen Notes

  	
  51

  
	
   

  	
   

  	
   

  
	
  SECTION 2.12

  	
  Outstanding
  Notes

  	
  52

  
	
   

  	
   

  	
   

  
	
  SECTION 2.13

  	
  Temporary
  Notes

  	
  52

  
	
   

  	
   

  	
   

  
	
  SECTION 2.14

  	
  Cancellation

  	
  53

  
	
   

  	
   

  	
   

  
	
  SECTION 2.15

  	
  Payment of
  Interest; Defaulted Interest

  	
  53

  
	
   

  	
   

  	
   

  
	
  SECTION 2.16

  	
  Computation
  of Interest

  	
  54

  
	
   

  	
   

  	
   

  
	
  SECTION 2.17

  	
  CUSIP
  Numbers

  	
  54

  

 

ii

 

	
  ARTICLE
  III Covenants

  	
  54

  
	
   

  	
   

  
	
  SECTION 3.1

  	
  Payment of
  Notes

  	
  54

  
	
   

  	
   

  	
   

  
	
  SECTION 3.3

  	
  SEC Reports

  	
  55

  
	
   

  	
   

  	
   

  
	
  SECTION 3.4

  	
  Limitation
  on Indebtedness

  	
  56

  
	
   

  	
   

  	
   

  
	
  SECTION 3.6

  	
  Limitation
  on Restricted Payments

  	
  60

  
	
   

  	
   

  	
   

  
	
  SECTION 3.8

  	
  Limitation
  on Liens

  	
  65

  
	
   

  	
   

  	
   

  
	
  SECTION 3.9

  	
  Limitation
  on Sale/Leaseback Transactions

  	
  66

  
	
   

  	
   

  	
   

  
	
  SECTION 3.10

  	
  Limitation
  on Restrictions on Distributions from Restricted Subsidiaries

  	
  66

  
	
   

  	
   

  	
   

  
	
  SECTION 3.12

  	
  Limitation
  on Sales of Assets and Subsidiary Stock

  	
  68

  
	
   

  	
   

  	
   

  
	
  SECTION 3.14

  	
  Limitation
  on Transactions with Affiliates

  	
  71

  
	
   

  	
   

  	
   

  
	
  SECTION 3.16

  	
  Change of
  Control

  	
  73

  
	
   

  	
   

  	
   

  
	
  SECTION 3.18

  	
  Future Note
  Guarantors

  	
  75

  
	
   

  	
   

  	
   

  
	
  SECTION 3.20

  	
  Limitation
  on Lines of Business

  	
  75

  
	
   

  	
   

  	
   

  
	
  SECTION 3.21

  	
  Limitation
  on Activities of Palace Finance

  	
  75

  
	
   

  	
   

  	
   

  
	
  SECTION 3.22

  	
  Payments for
  Consent

  	
  75

  
	
   

  	
   

  	
   

  
	
  SECTION 3.23

  	
  Maintenance
  of Office or Agency

  	
  75

  
	
   

  	
   

  	
   

  
	
  SECTION 3.24

  	
  Money for Note
  Payments to Be Held in Trust

  	
  76

  
	
   

  	
   

  	
   

  
	
  SECTION 3.25

  	
  Maintenance
  of Existence

  	
  77

  
	
   

  	
   

  	
   

  
	
  SECTION 3.26

  	
  Payment of
  Taxes and Other Claims

  	
  77

  
	
   

  	
   

  	
   

  
	
  SECTION 3.27

  	
  Compliance
  Certificate

  	
  77

  
	
   

  	
   

  	
   

  
	
  SECTION 3.28

  	
  Additional
  Interest Notices

  	
  78

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV Successor Company and Successor Guarantor

  	
  78

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
  Merger and
  Consolidation of the Company and Parent

  	
  78

  
	
   

  	
   

  	
   

  
	
  SECTION 4.3

  	
  Merger and
  Consolidation of Subsidiary Guarantors

  	
  80

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  Redemption of Notes

  	
  80

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
  Optional
  Redemption

  	
  80

  

 

iii

 

	
  SECTION 5.2

  	
  Applicability
  of Article

  	
  80

  
	
   

  	
   

  	
   

  
	
  SECTION 5.3

  	
  Election to
  Redeem

  	
  81

  
	
   

  	
   

  	
   

  
	
  SECTION 5.4

  	
  Selection by
  Trustee of Notes to Be Redeemed

  	
  81

  
	
   

  	
   

  	
   

  
	
  SECTION 5.5

  	
  Notice of
  Redemption

  	
  81

  
	
   

  	
   

  	
   

  
	
  SECTION 5.6

  	
  Deposit of
  Redemption Price

  	
  82

  
	
   

  	
   

  	
   

  
	
  SECTION 5.7

  	
  Notes
  Payable on Redemption Date

  	
  82

  
	
   

  	
   

  	
   

  
	
  SECTION 5.8

  	
  Notes
  Redeemed in Part

  	
  83

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI Defaults and Remedies

  	
  83

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
  Events of
  Default

  	
  83

  
	
   

  	
   

  	
   

  
	
  SECTION 6.2

  	
  Acceleration

  	
  85

  
	
   

  	
   

  	
   

  
	
  SECTION 6.3

  	
  Other
  Remedies

  	
  86

  
	
   

  	
   

  	
   

  
	
  SECTION 6.4

  	
  Waiver of
  Past Defaults

  	
  86

  
	
   

  	
   

  	
   

  
	
  SECTION 6.5

  	
  Control by
  Majority

  	
  86

  
	
   

  	
   

  	
   

  
	
  SECTION 6.6

  	
  Limitation
  on Suits

  	
  87

  
	
   

  	
   

  	
   

  
	
  SECTION 6.7

  	
  Rights of
  Holders to Receive Payment

  	
  87

  
	
   

  	
   

  	
   

  
	
  SECTION 6.8

  	
  Collection
  Suit by Trustee

  	
  87

  
	
   

  	
   

  	
   

  
	
  SECTION 6.9

  	
  Trustee May
  File Proofs of Claim

  	
  87

  
	
   

  	
   

  	
   

  
	
  SECTION 6.10

  	
  Priorities

  	
  88

  
	
   

  	
   

  	
   

  
	
  SECTION 6.11

  	
  Undertaking
  for Costs

  	
  88

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII Trustee

  	
  88

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
  Duties of
  Trustee

  	
  88

  
	
   

  	
   

  	
   

  
	
  SECTION 7.3

  	
  Rights of
  Trustee

  	
  90

  
	
   

  	
   

  	
   

  
	
  SECTION 7.5

  	
  Individual
  Rights of Trustee

  	
  91

  
	
   

  	
   

  	
   

  
	
  SECTION 7.6

  	
  Trustee’s
  Disclaimer

  	
  91

  
	
   

  	
   

  	
   

  
	
  SECTION 7.7

  	
  Notice of
  Defaults

  	
  91

  

 

iv

 

	
  SECTION 7.8

  	
  Reports by
  Trustee to Holders

  	
  91

  
	
   

  	
   

  	
   

  
	
  SECTION 7.9

  	
  Compensation
  and Indemnity

  	
  92

  
	
   

  	
   

  	
   

  
	
  SECTION 7.10

  	
  Replacement
  of Trustee

  	
  93

  
	
   

  	
   

  	
   

  
	
  SECTION 7.11

  	
  Successor
  Trustee by Merger

  	
  93

  
	
   

  	
   

  	
   

  
	
  SECTION 7.12

  	
  Eligibility;
  Disqualification

  	
  94

  
	
   

  	
   

  	
   

  
	
  SECTION 7.13

  	
  Preferential
  Collection of Claims Against Issuers

  	
  94

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII Discharge of Indenture; Defeasance

  	
  94

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
  Discharge of
  Liability on Notes; Defeasance

  	
  94

  
	
   

  	
   

  	
   

  
	
  SECTION 8.2

  	
  Conditions
  to Defeasance

  	
  95

  
	
   

  	
   

  	
   

  
	
  SECTION 8.3

  	
  Application
  of Trust Money

  	
  97

  
	
   

  	
   

  	
   

  
	
  SECTION 8.4

  	
  Repayment to
  Issuers

  	
  97

  
	
   

  	
   

  	
   

  
	
  SECTION 8.5

  	
  Indemnity
  for U.S

  	
  97

  
	
   

  	
   

  	
   

  
	
  SECTION 8.6

  	
  Reinstatement

  	
  97

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX Amendments

  	
  98

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
  Without
  Consent of Holders

  	
  98

  
	
   

  	
   

  	
   

  
	
  SECTION 9.2

  	
  With Consent
  of Holders

  	
  99

  
	
   

  	
   

  	
   

  
	
  SECTION 9.3

  	
  Compliance
  with Trust Indenture Act

  	
  100

  
	
   

  	
   

  	
   

  
	
  SECTION 9.4

  	
  Revocation
  and Effect of Consents and Waivers

  	
  100

  
	
   

  	
   

  	
   

  
	
  SECTION 9.5

  	
  Notation on
  or Exchange of Notes

  	
  100

  
	
   

  	
   

  	
   

  
	
  SECTION 9.6

  	
  Trustee To
  Sign Amendments

  	
  100

  
	
   

  	
   

  	
   

  
	
  ARTICLE X
  Note Guarantees

  	
  101

  
	
   

  	
   

  	
   

  
	
  SECTION 10.1

  	
  Note
  Guarantees

  	
  101

  
	
   

  	
   

  	
   

  
	
  SECTION 10.2

  	
  Limitation
  on Liability; Termination, Release and Discharge

  	
  102

  
	
   

  	
   

  	
   

  
	
  SECTION 10.3

  	
  Right of
  Contribution

  	
  103

  
	
   

  	
   

  	
   

  
	
  SECTION 10.4

  	
  No
  Subrogation

  	
  103

  

 

v

 

	
  ARTICLE
  XI Miscellaneous

  	
  104

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1

  	
  Trust
  Indenture Act Controls

  	
  104

  
	
   

  	
   

  	
   

  
	
  SECTION 11.2

  	
  Notices

  	
  104

  
	
   

  	
   

  	
   

  
	
  SECTION 11.3

  	
  Communication
  by Holders with other Holders

  	
  105

  
	
   

  	
   

  	
   

  
	
  SECTION 11.4

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
  105

  
	
   

  	
   

  	
   

  
	
  SECTION 11.5

  	
  Statements
  Required in Certificate or Opinion

  	
  105

  
	
   

  	
   

  	
   

  
	
  SECTION 11.6

  	
  When Notes
  Disregarded

  	
  105

  
	
   

  	
   

  	
   

  
	
  SECTION 11.7

  	
  Rules by
  Trustee, Paying Agent and Registrar

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION 11.8

  	
  Legal
  Holidays

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION 11.9

  	
  Governing
  Law

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.10

  	
  No Recourse
  Against Others

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.11

  	
  Successors

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.12

  	
  Multiple
  Originals

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.13

  	
  Variable
  Provisions

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.14

  	
  Qualification
  of Indenture

  	
  106

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.15

  	
  Table of
  Contents; Headings

  	
  106

  
	
   

  	
   

  	
   

  
	
  ARTICLE I
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
  Defined
  Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II Agreement to be Bound; Note Guarantee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
  Agreement to
  be Bound

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.2

  	
  Note
  Guarantee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.2

  	
  Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.3

  	
  Governing
  Law

  	
   

  

 

vi

 

	
  SECTION 3.4

  	
  Severability
  Clause

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.5

  	
  Ratification
  of Indenture; Supplemental Indentures Part of Indenture

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.6

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.7

  	
  Headings

  	
   

  

 

	
   

  	
  ANNEXES

  	
   

  
	
   

  	
   

  	
   

  
	
  ANNEX 3.7(b)(i)

  	
  Other
  Agreements with Encumbrances or Restrictions

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of the Series A Note

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B

  	
  Form of the Series B Note

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C

  	
  Form of Indenture Supplement to Add Note Guarantors
  to Guarantee Notes

  	
   

  

 

vii

 

INDENTURE dated as of April 12, 2006 among FESTIVAL
FUN PARKS, LLC, a Delaware limited liability company (the “Company”),
PALACE FINANCE, INC., a Delaware corporation (“Palace Finance,” and,
together with Company, the “Issuers”), PALACE ENTERTAINMENT HOLDINGS,
INC., a Delaware corporation (“Parent”), the Subsidiary Guarantors (as
defined herein) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as trustee (the “Trustee”).

 

Recitals Of The Company

 

The Issuers have duly authorized the execution and
delivery of this Indenture to provide for the issuance of (i) the Issuers’ 10
7/8% Senior Notes, Series A, due 2014, issued on the Issue Date (the “Initial
Notes”) and the guarantee thereof by the Note Guarantors, (ii) if and when
issued, an unlimited principal amount of additional 10 7/8% Senior Notes,
Series A, due 2014 that may be offered from time to time subsequent to the
Issue Date in a non-registered offering or 10 7/8% Senior Notes, Series B, due
2014 in a registered offering of the Issuers’ that may be offered from time to
time subsequent to the Issue Date (the “Additional Notes”) and the
guarantee thereof by the Note Guarantors, and (iii) if and when issued, the
Issuers’ 10 7/8% Senior Notes, Series B, due 2014 and the guarantees thereof by
certain of the Note Guarantors that may be issued from time to time in exchange
for Initial Notes or Additional Notes pursuant to a Registration Rights
Agreement (as hereinafter defined, the “Exchange Notes” and together
with the Initial Notes and Additional Notes, the “Notes”).  $150,000,000 in aggregate principal amount of
Initial Notes shall be initially issued on the date hereof.

 

Simultaneously with the issuance of the Initial Notes
Palace Funding, Inc., a Delaware corporation and wholly-owned subsidiary of
Parent (“Palace Funding”), will merge with and into the Company with the
Company being the surviving entity.

 

Each party agrees as follows for the benefit of the
other parties and for the equal and ratable benefit of the Holders:

 

ARTICLE I

 

Definitions and
Incorporation by Reference

 

SECTION 1.1         Definitions.

 

“Acquired Indebtedness” means Indebtedness (i)
of a Person or any of its Subsidiaries existing at the time such Person becomes
a Restricted Subsidiary or (ii) assumed in connection with the acquisition of
assets from such Person, in each case whether or not Incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary or such acquisition.  
Acquired Indebtedness shall be deemed to have been Incurred, with
respect to clause (i) of the preceding sentence, on the date such Person
becomes a Restricted Subsidiary and, with respect to clause (ii) of the
preceding sentence, on the date of consummation of such acquisition of assets.

 

“Acquisition Agreement” means the Stock
Purchase Agreement among Palace Entertainment, Inc., the Company and Parent,
dated as of February 9, 2006, and accepted by Parent as of February 21, 2006.

 

 

“Additional Assets” means:

 

(1)           any
property, plant, equipment or other long-term, tangible assets (excluding
working capital for the avoidance of doubt) to be used by the Company or a
Restricted Subsidiary 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 the Company or a Restricted
Subsidiary; or

 

(3)           Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary;

 

provided, however, that, in the case of clauses (2)
and (3), such Restricted Subsidiary is primarily engaged in a Related Business.

 

“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 April 15, 2010,
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; provided that exclusively for purposes of Section
3.9 beneficial ownership of 10% or more of the Voting Stock of a Person
shall be deemed to be control.

 

“Applicable Premium” means with respect to a
Note at any redemption date, the greater of(i) 1.00% of the principal amount of
such Note and (ii) the excess of (A) the present value at such redemption date
of (1) the redemption price of such Note on April 15, 2010 (such redemption
price being described in paragraph 5 of the form of Notes set forth in Exhibit
A and Exhibit B hereto, exclusive of any accrued interest) plus (2) all
required remaining scheduled interest payments due on such Note through April
15, 2010 (but excluding accrued and unpaid

 

2

 

interest to the redemption date), computed using a discount rate equal
to the Adjusted Treasury Rate, over (B) the principal amount of such note on
such redemption date.

 

“Asset Disposition” means any direct or
indirect sale, lease (other than an operating lease entered into in the
ordinary course of business), transfer, issuance or other disposition, or a
series of related sales, leases, transfers, issuances or dispositions that are
part of a common plan, of shares of Capital Stock of a Subsidiary (other than
directors’ qualifying shares), property or other assets, including any lease
terminations, (each referred to for the purposes of this definition as a
“disposition”) by the Company or any of its Restricted Subsidiaries, including
any disposition by means of a merger, consolidation or similar transaction.

 

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

 

(1)           a
disposition of assets by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Restricted Subsidiary;

 

(2)           the
sale of Cash Equivalents in the ordinary course of business;

 

(3)           a
disposition of inventory in the ordinary course of business;

 

(4)           a
disposition of obsolete or worn out equipment or equipment that is no longer
useful in the conduct of the business of the Company and its Restricted
Subsidiaries and that is disposed of in the ordinary course of business;

 

(5)           transactions
permitted under Section 4.1 or Section 4.2;

 

(6)           an
issuance of Capital Stock by a Restricted Subsidiary to the Company or to a
Subsidiary Guarantor that is a Restricted Subsidiary;

 

(7)           for
purposes of Section 3.8 only, the making of a Permitted Investment
(other than a Permitted Investment to the extent such transaction results in
the receipt of cash or Cash Equivalents by the Company or its Restricted
Subsidiaries) or a disposition subject to Section 3.4;

 

(8)           the
creation of a Permitted Lien and dispositions in connection with Permitted
Liens;

 

(9)           dispositions
of receivables in connection with the compromise, settlement or collection
thereof in the ordinary course of business or in bankruptcy or similar
proceedings and exclusive of factoring or similar arrangements;

 

(10)         the
licensing or sublicensing of intellectual property or other general intangibles
and licenses, leases or subleases of other property in the ordinary course of
business;

 

(11)         foreclosure
on assets;

 

3

 

(12)         the
sale of assets and concurrent leaseback of such assets if such lease
constitutes a Capitalized Lease Obligation and is otherwise permitted under the
terms of this Indenture;

 

(13)         an
Asset Swap effected in compliance with Section 3.8; and

 

(14)         the
condemnation, or the taking by eminent domain, of any property or assets that
results in a Recovery Event the proceeds of which are applied in accordance
with this Indenture.

 

“Asset Swap” means the concurrent purchase and
sale or exchange of Additional Assets used or useful in a Related Business
between the Company and any of its Restricted Subsidiaries, on the one hand,
and another Person who is not an Affiliate of the Company on the other hand; provided that any cash received must be
applied in accordance with Section 3.8.

 

“Attributable Indebtedness” in respect of a
Sale/Leaseback Transaction means, as at the time of determination, the present
value (discounted at the interest rate implicit in the transaction) of the
total obligations of the lessee for rental payments during the remaining term
of the lease included in such Sale/Leaseback Transaction (including any period
for which such lease has been extended), determined in accordance with GAAP; provided,
however, that if such Sale/Leaseback Transaction results in a
Capitalized Lease Obligation, the amount of Indebtedness represented thereby
will be determined in accordance with the definition of Capitalized Lease
Obligations; provided, further, that the rental payments under
Real Estate Operating Leases shall not give rise to Attributable Indebtedness.

 

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

 

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

 

“Board of Directors” means, as to any Person,
the board of directors or managers, as applicable, of such Person (or, if such
Person is a partnership, the board of directors or other governing body of the
general partner of such Person) or any duly authorized committee thereof.

 

“Board Resolution” means a copy of a resolution
or unanimous written consent certified by the Secretary or an Assistant
Secretary of a company to have been duly adopted by the Board of Directors of
such company and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day” means each day that is not a
Saturday, Sunday or other day on which banking institutions in New York, New
York are authorized or required by law to close.

 

“Capital Stock” of any Person means any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however

 

4

 

designated) equity of such Person, including any Preferred Stock and
limited liability or partnership interests (whether general or limited), but
excluding any debt securities convertible into such equity.

 

“Capitalized Lease Obligations” means an
obligation that is required to be classified and accounted for as a capitalized
lease for financial reporting purposes in accordance with GAAP, and the amount
of Indebtedness represented by such obligation will be the capitalized amount
of such obligation at the time any determination thereof is to be made as
determined in accordance with GAAP, and the Stated Maturity thereof will be the
date of the last payment of rent or any other amount due under such lease prior
to the first date such lease may be terminated without penalty.

 

“Cash Equivalents” means:

 

(1)           securities
issued or directly and fully guaranteed or insured by the United States
Government or any agency or instrumentality of the United States (provided that the full faith and credit of
the United States is pledged in support thereof), having maturities of not more
than one year from the date of acquisition;

 

(2)           marketable
general obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof (provided that the full faith and credit of
the United States is pledged in support thereof) and, at the time of
acquisition, having a credit rating of “A” or better from either Standard &
Poor’s Ratings Services or Moody’s Investors Service, Inc.;

 

(3)           certificates
of deposit, time deposits, Eurodollar time deposits, overnight bank deposits or
bankers’ acceptances having maturities of not more than one year from the date
of acquisition thereof issued by any commercial bank the long-term debt of
which is rated at the time of acquisition thereof at least “A” or the
equivalent thereof by Standard & Poor’s Ratings Services, or “A” or the
equivalent thereof by Moody’s Investors Service, Inc., and having combined
capital and surplus in excess of $500.0 million;

 

(4)           repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (1), (2) and (3) entered into with any bank
meeting the qualifications specified in clause (3) above;

 

(5)           commercial
paper rated at the time of acquisition thereof at least “A-2” or the equivalent
thereof by Standard & Poor’s Ratings Services or “P-2” or the equivalent
thereof by Moody’s Investors Service, Inc., or carrying an equivalent rating by
a nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments, and in any case maturing within one
year after the date of acquisition thereof; and

 

(6)           interests
in any investment company or money market fund which invests substantially all
of its assets in instruments of the type specified in clauses (1) through (5)
above.

 

5

 

“Change of Control” means:

 

(1)           any
“person” or “group” of related persons (as such terms are 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 such person or group shall be deemed to have “beneficial
ownership” of all shares that any such person or group 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 the Company or Parent (or its successor by merger,
consolidation or purchase of all or substantially all of its assets) (for the
purposes of this clause, such person or group shall be deemed to beneficially
own any Voting Stock of the Company or Parent held by a parent entity (other
than the Parent), if such person or group “beneficially owns” (as defined
above), directly or indirectly, more than 50% of the voting power of the Voting
Stock of such parent entity); or

 

(2)           the
first day on which a majority of the members of the Board of Directors of the
Company or Parent are not Continuing Directors; or

 

(3)           the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company or Parent and its Restricted
Subsidiaries taken as a whole to any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) other than a Permitted Holder; or

 

(4)           the
adoption by the stockholders of the Company or Parent of a plan or proposal for
the liquidation or dissolution of the Company or Parent.

 

“Clearstream” means Clearstream Banking,
société anonyme, or any successor securities clearing agency.

 

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

 

“Common Stock” means with respect to any
Person, any and all shares, interest or other participations in, and other
equivalents (however designated and whether voting or nonvoting) of such
Person’s common stock whether or not outstanding on the Issue Date, and
includes, without limitation, all series and classes of such common stock.

 

“Comparable Treasury Issue” means the United
States Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the Notes from the redemption date to April
15, 2010, that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of a maturity most nearly equal to April 15, 2010.

 

“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” means as of any
date of determination, with respect to any Person, the ratio of (x) the
aggregate amount of Consolidated EBITDA of such

 

6

 

Person for the period of the most recent four consecutive fiscal
quarters ending prior to the date of such determination for which financial
statements are internally available to (y) Consolidated Interest Expense for
such four fiscal quarters, provided, however, that:

 

(1)           if
the Company or any Restricted Subsidiary:

 

(a)           has Incurred any Indebtedness since
the beginning of such period that remains outstanding on such date of
determination or if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and
Consolidated Interest Expense for such period will 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 (except that in making such
computation, the amount of Indebtedness under any revolving credit facility
outstanding on the date of such calculation will be deemed to be (i) the
average daily balance of such Indebtedness during such four fiscal quarters or
such shorter period for which such facility was outstanding or (ii) if such
facility was created after the end of such four fiscal quarters, the average
daily balance of such Indebtedness during the period from the date of creation
of such facility to the date of such calculation) and the discharge of any
other Indebtedness repaid, repurchased, defeased or otherwise discharged with
the proceeds of such new Indebtedness as if such discharge had occurred on the
first day of such period; or

 

(b)           has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of the period that is
no longer outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio involves a
discharge of Indebtedness (in each case other than Indebtedness Incurred under
any revolving credit facility unless such Indebtedness has been permanently
repaid and the related commitment terminated), Consolidated EBITDA and
Consolidated Interest Expense for such period will be calculated after giving
effect on a pro forma basis to such discharge of such Indebtedness, including
with the proceeds of such new Indebtedness, as if such discharge had occurred
on the first day of such period;

 

(2)           if
since the beginning of such period the Company or any Restricted Subsidiary
will have made any Asset Disposition or disposed of any company, division,
operating unit, segment, business, group of related assets or line of business,
or any Park Management Agreement has been terminated or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio is such an
Asset Disposition:

 

(a)           the Consolidated EBITDA for such
period will be reduced by an amount equal to the Consolidated EBITDA (if
positive) directly attributable to the assets which are the subject of such
disposition or termination for such period or increased by an amount equal to
the Consolidated EBITDA (if negative) directly attributable thereto for such period;
and

 

(b)           Consolidated Interest Expense for
such period will be reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any

 

7

 

Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

 

(3)           if
since the beginning of such period the Company or any Restricted Subsidiary (by
merger or otherwise) will have made an Investment in any Restricted Subsidiary
(or any Person which becomes a Restricted Subsidiary or is merged with or into
the Company) or an acquisition of assets, including any acquisition of assets
occurring in connection with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all of a company, division,
operating unit, segment, business, group of related assets or line of business,
or executed any Park Management Agreement, Consolidated EBITDA and Consolidated
Interest Expense for such period will be calculated after giving pro forma
effect thereto (including the Incurrence of any Indebtedness) as if such
Investment, acquisition or execution occurred on the first day of such period;

 

(4)           if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) will have Incurred any
Indebtedness or discharged any Indebtedness, made any Asset Disposition or any
Investment or acquisition of assets that would have required an adjustment
pursuant to clause (2) or (3) above if made by the Company or a Restricted
Subsidiary during such period, Consolidated EBITDA and Consolidated Interest
Expense for such period will be calculated after giving pro forma effect
thereto as if such transaction occurred on the first day of such period; and

 

(5)           with
respect to any period prior to the Issue Date, any adjustments to “EBITDA”
contained in the Offering Memorandum under “Summary—Summary historical and pro
forma financial data” will be added to or deducted from Consolidated Net Income
in computing Consolidated EBITDA to the extent included in calculating
Consolidated Net Income.

 

For purposes of this definition, whenever pro forma
effect is to be given to any calculation under this definition, the pro forma
calculations will be determined in good faith by a responsible financial or
accounting officer of the Company (including pro forma expense and cost
reductions calculated on a basis consistent with Regulation S-X under the
Securities Act) except that such pro forma calculations may include, without
duplication, the impact of any Park Management Agreements and operating expense
reductions for such period resulting from the transaction which is being given
pro forma effect that have been realized or for which the steps necessary for
realization have been taken or are reasonably expected to be taken and will
commence upon the consummation of such transaction (which operating expense
reductions are reasonably expected to be sustainable over the long term, will
not adversely effect revenues and will commence no later than 180 days after
the consummation of the transaction), including, but not limited to, the
execution or termination of any contracts, reduction of costs related to
administrative functions, the termination of any personnel or the closing (or
approval of the Board of Directors of the Company of any closing) of any
facility, as applicable; provided that,

 

8

 

in any case, such adjustments are set forth in an Officers’ Certificate
signed by the Company’s chief financial or chief accounting officer and another
Officer which sets forth (i) the amount of such adjustment or adjustments, (ii)
that such adjustment or adjustments conform to the provisions of this paragraph
and are based on the reasonable good faith beliefs of the Officers executing
such Officers’ Certificate at the time of such execution and (iii) that any
related Incurrence of Indebtedness is permitted pursuant to this
Indenture.  If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Indebtedness will 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 that is
being given pro forma effect bears an interest rate at the option of the
Company, the interest rate shall be calculated by applying such optional rate
chosen by the Company.

 

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

 

(1)           Consolidated
Interest Expense; plus

 

(2)           Consolidated
Income Taxes; plus

 

(3)           consolidated
depreciation expense; plus

 

(4)           consolidated
amortization expense (including amortization of any write-up of leases arising
from purchase accounting in accordance with GAAP) or impairment charges
recorded in connection with the application of Financial Accounting Standard
No. 142 “Goodwill and Other Intangibles” and Financial Accounting Standard No.
144 “Accounting for the Impairment or Disposal of Long Lived Assets;” plus

 

(5)           other
non-cash charges reducing Consolidated Net Income, including, without
limitation, any unrealized non-cash losses or charges in respect of Hedging
Obligations, including those resulting from the application of FAS 133 (excluding
any such non-cash charge to the extent it represents an accrual of or reserve
for cash charges in any future period or amortization of a prepaid cash expense
that was paid in a prior period not included in the calculation); plus

 

(6)           any
gains (or less any losses) (less all fees and expenses or charges relating
thereto) attributable to the early extinguishment of Indebtedness; plus

 

(7)           payments
made pursuant to the Management Agreement in accordance with this Indenture;
plus

 

(8)           fees
and expenses of the Company and its Restricted Subsidiaries payable in
connection with any Equity Offering, the Incurrence of Indebtedness permitted
by Section 3.3, any acquisition permitted hereunder or any restructuring
charges provided that the amount of restructuring charges paid or payable in
cash shall not exceed $5.0 million since the Issue Date; less

 

9

 

(9)           noncash
items increasing Consolidated Net Income of such Person for such period,
including, without limitation, any unrealized non-cash gains in respect of
Hedging Obligations, including those resulting from the application of FAS 133
(excluding any items which represent the reversal of any accrual of, or reserve
for, anticipated cash charges made in any prior period).

 

Notwithstanding the preceding sentence, clauses (2)
through (9) relating to amounts of a Restricted Subsidiary of a Person will be
added to Consolidated Net Income to compute Consolidated EBITDA of such Person
only to the extent (and in the same proportion) that the net income (loss) of
such Restricted Subsidiary was included in calculating the Consolidated Net
Income of such Person and, to the extent the amounts set forth in clauses (2)
through (9) are in excess of those necessary to offset a net loss of such
Restricted Subsidiary or if such Restricted Subsidiary has net income for such
period included in Consolidated Net Income, only if a corresponding amount
would be permitted at the date of determination to be dividended to the Company
by such Restricted Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.

 

“Consolidated Income Taxes” means, with respect
to any Person for any period, taxes imposed upon such Person or other payments
required to be made by such Person by any governmental authority which taxes or
other payments are calculated by reference to the income or profits of such
Person or such Person and its Restricted Subsidiaries (to the extent such
income or profits were included in computing Consolidated Net Income for such
period), regardless of whether such taxes or payments are required to be
remitted to any governmental authority.

 

“Consolidated Interest Expense” means, for any
period, the total interest expense of the Company and its consolidated
Restricted Subsidiaries, whether paid or accrued, plus, to the extent not
included in such interest expense:

 

(1)           interest
expense attributable to Capitalized Lease Obligations and the interest portion
of rent expense associated with Attributable Indebtedness in respect of the
relevant lease giving rise thereto, determined as if such lease were a
capitalized lease in accordance with GAAP and the interest component of any
deferred payment obligations;

 

(2)           amortization
of debt discount (provided that
any amortization of bond premium will be credited to reduce Consolidated
Interest Expense unless, pursuant to GAAP, such amortization of bond premium
has otherwise reduced Consolidated Interest Expense);

 

(3)           non-cash
interest expense;

 

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

 

(5)           the
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries;

 

10

 

(6)           costs
associated with Hedging Obligations (including amortization of fees) provided,
however, that if Hedging Obligations result in net benefits rather
than costs, such benefits shall be credited to reduce Consolidated Interest
Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in
Consolidated Net Income;

 

(7)           the
consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period;

 

(8)           the
product of (a) all dividends paid or payable, in cash, Cash Equivalents or
Indebtedness or accrued during such period on any series of Disqualified Stock
of such Person or on Preferred Stock of its Restricted Subsidiaries that are
not Subsidiary Guarantors payable to a party other than the Company or a Wholly
Owned Subsidiary, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state,
provincial and local statutory tax rate of such Person, expressed as a decimal,
in each case, on a consolidated basis and in accordance with GAAP; and

 

(9)           the
cash contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or
fees to any Person (other than the Company and its Restricted Subsidiaries) in
connection with Indebtedness Incurred by such plan or trust.

 

For the purpose of calculating the Consolidated
Coverage Ratio in connection with the Incurrence of any Indebtedness described
in the final paragraph of the definition of

 

“Indebtedness,” the calculation of Consolidated
Interest Expense shall include all interest expense (including any amounts
described in clauses (1) through (9) above) relating to any Indebtedness of the
Company or any Restricted Subsidiary described in the final paragraph of the
definition of “Indebtedness.”

 

For purposes of the foregoing, total interest expense
will be determined (i) after giving effect to any net payments made or received
by the Company and its Subsidiaries with respect to Interest Rate Agreements
and (ii) exclusive of amounts classified as other comprehensive income in the
balance sheet of the Company.

 

“Consolidated Leverage Ratio,” as of any date
of determination, means the ratio of:

 

(1)           the
sum of the aggregate outstanding Indebtedness of the Company and its Restricted
Subsidiaries as of the date of calculation on a consolidated basis in
accordance with GAAP to

 

(2)           Consolidated
EBITDA of the Company and its Restricted Subsidiaries for the period of the
most recent four consecutive fiscal quarters ending prior to the date of such
determination; provided, however, that:

 

(3)           if
the Company or any Restricted Subsidiary:

 

11

 

(a)           has Incurred any Indebtedness since
the beginning of such period that remains outstanding on such date of
determination or if the transaction giving rise to the need to calculate the
Consolidated Leverage Ratio is an Incurrence of Indebtedness, Indebtedness at
the end of such period, Consolidated EBITDA for such period will be calculated
after giving effect on a pro forma basis to (x) such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period (except that in
making such computation, the amount of Indebtedness under any revolving credit
facility outstanding on the date of such calculation will be deemed to be: (i)
the average daily balance of such Indebtedness during such four fiscal quarters
or such shorter period for which such facility was outstanding or (ii) if such
facility was created after the end of such four fiscal quarters, the average
daily balance of such Indebtedness during the period from the date of creation
of such facility to the date of such calculation) and (y) the discharge of any
other Indebtedness repaid, repurchased, defeased or otherwise discharged with
the proceeds of such new Indebtedness as if such discharge had occurred on the
first day of such period; or

 

(b)           has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of the period that is
no longer outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Leverage Ratio involves a
discharge of Indebtedness (in each case other than Indebtedness Incurred under
any revolving credit facility unless such Indebtedness has been permanently
repaid and the related commitment terminated), Indebtedness and Consolidated
EBITDA for such period will be calculated after giving effect on a pro forma
basis to such discharge of such Indebtedness, including with the proceeds of
such new Indebtedness, as if such discharge had occurred on the first day of
such period;

 

(4)           if
since the beginning of such period the Company or any Restricted Subsidiary
will have made any Asset Disposition or disposed of any company, division,
operating unit, segment, business, group of related assets or line of business,
or any Park Management Agreement has been terminated, or if the transaction giving
rise to the need to calculate the Consolidated Leverage Ratio is such an Asset
Disposition:

 

(a)           Indebtedness at the end of such
period will be reduced by an amount equal to the Indebtedness discharged,
defeased or retired with the Net Available Cash of such Asset Disposition and
the assumption of Indebtedness by the transferee; and

 

(b)           the Consolidated EBITDA for such
period will be reduced by an amount equal to the Consolidated EBITDA (if
positive) directly attributable to the assets which are the subject of such
disposition or termination for such period or increased by an amount equal to
the Consolidated EBITDA (if negative) directly attributable thereto for such
period; and

 

(5)           if
since the beginning of such period the Company or any Restricted Subsidiary (by
merger or otherwise) will have made an Investment in any Restricted Subsidiary
(or any Person which becomes a Restricted Subsidiary or is merged with or into
the Company) or an acquisition of assets, including any acquisition of assets
occurring in connection with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all

 

12

 

of a company, division, operating unit, segment, business or group of
related assets or line of business, or executed any Park Management Agreement,
Indebtedness and Consolidated EBITDA for such period will be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness)
as if such Investment, acquisition or execution occurred on the first day of
such period; and

 

(6)           if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) will have Incurred any
Indebtedness or discharged any Indebtedness or made any Asset Disposition or
any Investment or acquisition of assets that would have required an adjustment
pursuant to clause (3), (4) or (5) above if made by the Company or a Restricted
Subsidiary during such period, Indebtedness and Consolidated EBITDA for such
period will be calculated after giving pro forma effect thereto as if such
Incurrence of Indebtedness or Asset Disposition or Investment occurred on the
first day of such period.

 

For purposes of this definition, whenever pro forma
effect is to be given to any calculation under this definition, the pro forma
calculations will be determined in good faith by a responsible financial or
accounting officer of the Company (including pro forma expense and cost
reductions calculated on a basis consistent with Regulation S-X under the
Securities Act) except that such pro forma calculations may include, without
duplication, the impact of any Park Management Agreements and operating expense
reductions for such period resulting from the transaction which is being given
pro forma effect that have been realized or for which the steps necessary for
realization have been taken or are reasonably expected to be taken and will commence
upon the consummation of such transaction (which operating expense reductions
are reasonably expected to be sustainable over the long term, will not
adversely effect revenues and will commence no later than 180 days after the
consummation of the transaction), including, but not limited to, the execution
or termination of any contracts, reduction of costs related to administrative
functions, the termination of any personnel or the closing (or approval of the
Board of Directors of the Company of any closing) of any facility, as
applicable; provided that, in any case, such adjustments are set forth in an
Officers’ Certificate signed by the Company’s chief financial or chief
accounting officer and another Officer which sets forth (i) the amount of such
adjustment or adjustments, (ii) that such adjustment or adjustments conform to
the provisions of this paragraph and are based on the reasonable good faith
beliefs of the Officers executing such Officers’ Certificate at the time of
such execution and (iii) that any related Incurrence of Indebtedness is
permitted pursuant to this Indenture.

 

“Consolidated Net Income” means, for any
period, the net income (loss) of the Company and its consolidated Restricted
Subsidiaries determined in accordance with GAAP; provided, however,
that there will not be included in such Consolidated Net Income:

 

(1)           any
net income (loss) of any Person if such Person is not a Restricted Subsidiary,
except that:

 

(a)           subject to the limitations contained
in clauses (3), (4) and (5) below, the Company’s equity in the net income of
any such Person for such period will be included in such Consolidated Net
Income up to the aggregate amount of cash actually

 

13

 

distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in clause
(2) below); and

 

(b)           the Company’s equity in a net loss of
any such Person (other than an Unrestricted Subsidiary) for such period will be
included in determining such Consolidated Net Income to the extent such loss
has been funded with cash from the Company or a Restricted Subsidiary;

 

(2)           any
net income (but not loss) of any Restricted Subsidiary if such Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or
the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that:

 

(a)           subject to the limitations contained
in clauses (3), (4) and (5) below, the Company’s equity in the net income of
any such Restricted Subsidiary for such period will be included in such
Consolidated Net Income up to the aggregate amount of cash that could have been
distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend (subject, in the case of a dividend
to another Restricted Subsidiary, to the limitation contained in this clause);
and

 

(b)           the Company’s equity in a net loss of
any such Restricted Subsidiary for such period will be included in determining
such Consolidated Net Income;

 

(3)           any
gain (loss) realized upon the sale or other disposition of any property, plant
or equipment of the Company or its consolidated Restricted Subsidiaries
(including pursuant to any Sale/Leaseback Transaction or any termination of
leases) which is not sold or otherwise disposed of in the ordinary course of
business and any gain (loss) realized upon the sale or other disposition of any
Capital Stock of any Person;

 

(4)           dividends
paid or accrued on any Preferred Stock (other than Disqualified Stock) of the
Company to the extent that such dividends actually reduced Consolidated Net
Income;

 

(5)           any
extraordinary gain or loss;

 

(6)           non-cash
compensation expense incurred with any issuance of equity interests to an
employee of such Person or any Restricted Subsidiary; and

 

(7)           the
cumulative effect of a change in accounting principles.

 

Any
amounts payable by Parent or Intermediate Parent described in clause (8) of Section
3.4(b), without duplication of any amounts otherwise deducted in
calculating Consolidated Net Income, the funds for which are provided by the
Company and/or its Restricted Subsidiaries, shall be deducted in calculating
the Consolidated Net Income of the Company and its Restricted Subsidiaries.

 

14

 

“Consolidated Total Assets” means, as of any
date of determination, after giving effect on a pro forma basis to the
transaction giving rise to the need to compute Consolidated Total Assets, the
total amount of assets which would appear on a consolidated balance sheet of
the Company and its Restricted Subsidiaries, determined on a consolidated basis
in accordance with GAAP, after deducting (i) the amount of all current
liabilities and (ii) any item representing Investments in Unrestricted
Subsidiaries and Joint Ventures.

 

“Continuing Directors” means, as of any date of
determination, any member of the Board of Directors of the Company or Parent,
as the case may be, who: (1) was a member of such Board of Directors on the
date of this Indenture; (2) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing Directors who
were members of the relevant Board at the time of such nomination or election;
or (3) was designated by the Permitted Holders.

 

“Corporate Trust Office” means the principal
office of the Trustee at which at any time its corporate trust business shall
be administered, which office at the date hereof is located at Sixth and
Marquette, Mac N9303-120, Minneapolis, Minnesota 55479, Attention: Corporate
Trust Administration, or such other address as the Trustee may designate from
time to time by notice to the Holders and the Company, or the principal
corporate trust office of any successor Trustee (or such other address as such
successor Trustee may designate from time to time by notice to the Holders and
the Company).

 

“Credit Facility” means, with respect to the
Company or any Subsidiary Guarantor, one or more debt facilities (including,
without limitation, the Senior Secured Credit Agreement or commercial paper
facilities with banks or other institutional lenders providing for revolving
credit loans, term loans, debt securities or letters of credit, but excluding
receivables facilities, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time (and
whether or not with the original administrative agent and lenders or another
administrative agent or agents or other lenders and whether provided under the
original Senior Secured Credit Agreement or any other credit or other agreement
or indenture)).

 

“Currency Agreement” means in respect of a
Person any foreign exchange contract, currency swap agreement, futures
contract, option contract or other similar agreement as to which such Person is
a party or a beneficiary.

 

“Custodian” means any receiver, trustee,
assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

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

 

“Definitive Notes” means certificated
securities.

 

“Depositary” means The Depository Trust
Company, its nominees and their respective successors and assigns, or such
other depository institution hereinafter appointed by the Company.

 

15

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
upon the happening of any event: (1) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise; (2) is convertible or
exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock
which is convertible or exchangeable solely at the option of the Company or a
Restricted Subsidiary); or (3) is redeemable at the option of the holder of the
Capital Stock in whole or in part; in each case on or prior to the date that is
91 days after the earlier of the date (a) of the Stated Maturity of the Notes
or (b) on which there are no Notes outstanding, provided that only the portion of Capital Stock which so
matures or is mandatorily redeemable, is so convertible or exchangeable or is
so redeemable at the option of the holder thereof prior to such date will be
deemed to be Disqualified Stock; provided,
further that any Capital Stock
that would constitute Disqualified Stock solely because the holders thereof
have the right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or asset sale (each defined in a
substantially identical manner to the corresponding definitions in this
Indenture) shall not constitute Disqualified Stock if the terms of such Capital
Stock (and all such securities into which it is convertible or for which it is
ratable or exchangeable) provide that the Company may not repurchase or redeem
any such Capital Stock (and all such securities into which it is convertible or
for which it is ratable or exchangeable) pursuant to such provision prior to
compliance by the Company with the provisions contained in Sections 3.8
and 3.10 of this Indenture.

 

“Domestic Subsidiary” means any Subsidiary of a
Person that is organized under the laws of the United States of America or any
state or political subdivision thereof.

 

“Equity Contribution” means direct or indirect
equity investments in Palace Entertainment Holdings, Inc., a Delaware
corporation, in the amount of $54.0 million made by MidOcean, John A. Cora and
Daniel S. Martinez the proceeds of which are contributed to the Company to
finance a portion of the Acquisition.

 

“Equity Offering” means a public or private
offering for cash by the Company or Parent, as the case may be, of its Common
Stock, or options, warrants or rights with respect to its Common Stock, other
than (x) public offerings with respect to the Company’s or Parent’s, as the
case may be, Common Stock, or options, warrants or rights, registered on Form
S-4 or S-8, (y) an issuance to any Subsidiary or (z) any offering of Common
Stock issued in connection with a transaction that constitutes a Change of
Control.

 

“Euroclear” means Euroclear Bank S.A./N.V. or
any successor securities clearing agency.

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended and the rules and regulations of the SEC promulgated
thereunder.

 

“Exchange Offer” shall have the meaning set
forth in the Registration Rights Agreement.

 

16

 

“First-Lien Credit Facilities” means the Senior
Secured Credit Agreement and any other Credit Facility that is secured by a
Permitted Lien described in clause (1) of the definition thereof.

 

“Fiscal Year” means the fiscal year of the
Company ending on the first Sunday after December 30 of each year or such other
fiscal year as may be determined by the Company and the Board of Directors and
of which the Trustee shall receive written notice pursuant to Section 3.21
hereof.

 

“Foreign Subsidiary” means any Subsidiary of a
Person that is not organized under the laws of the United States of America or
any state thereof or the District of Columbia.

 

“GAAP” means generally accepted accounting
principles in the United States of America as in effect as of the date of this
Indenture, including those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession.  All ratios and computations based on GAAP contained
in this Indenture will be computed in conformity with GAAP.

 

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

 

(1)           to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement 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 purposes 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” will 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 Pari Passu Indebtedness” means
Indebtedness of a Note Guarantor that ranks equally in right of payment to its
Note Guarantee.

 

“Guarantor Subordinated Obligation” means, with
respect to a Note Guarantor, any Indebtedness of such Note Guarantor (whether
outstanding on the Issue Date or thereafter Incurred) which is expressly
subordinated in right of payment to the obligations of such Note Guarantor
under its Note Guarantee pursuant to a written agreement.

 

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

 

17

 

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

 

“Incur” means issue, create, assume, Guarantee,
incur or otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a Restricted
Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be
deemed to be Incurred by such Restricted Subsidiary at the time it becomes a
Restricted Subsidiary; and the terms “Incurred” and “Incurrence” have meanings
correlative to the foregoing.

 

“Indebtedness” means, with respect to any
Person on any date of determination (without duplication): (1) the principal of
and premium (if any) in respect of indebtedness of such Person for borrowed
money; (2) the principal of and premium (if any) in respect of obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments;
(3) the principal component of all obligations of such Person in respect of
letters of credit, bankers’ acceptances or other similar instruments (including
reimbursement obligations with respect thereto except to the extent such
reimbursement obligation relates to a trade payable and such obligation is
satisfied within 30 days of Incurrence); (4) the principal component of all
obligations of such Person to pay the deferred and unpaid purchase price of
property (except trade payables), which purchase price is due more than six
months after the date of placing such property in service or taking delivery
and title thereto; (5) Capitalized Lease Obligations and all Attributable
Indebtedness of such Person; (6) the principal component or liquidation
preference of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with respect to any
Subsidiary that is not a Subsidiary Guarantor, any Preferred Stock; (7) the
principal component of all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of such
Indebtedness will be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness of such
other Persons; (8) the principal component of Indebtedness of other Persons to
the extent Guaranteed by such Person; and (9) to the extent not otherwise
included in this definition, net obligations of such Person under Hedging
Obligations (the amount of any such obligations to be equal at any time to the
termination value of such agreement or arrangement giving rise to such obligation
that would be payable by such Person at such time).

 

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

 

In addition, “Indebtedness” of any Person shall
include Indebtedness described in the preceding paragraph that would not appear
as a liability on the balance sheet of such Person if:

 

(1)           such
Indebtedness is the obligation of a partnership or joint venture that is not a
Restricted Subsidiary (a “JV”);

 

18

 

(2)           such
Person or a Restricted Subsidiary of such Person is a general partner of the JV
(a “General Partner”); and

 

(3)           there
is recourse, by contract or operation of law, with respect to the payment of
such Indebtedness to property or assets of such Person or a Restricted
Subsidiary of such Person; and then such Indebtedness shall be included in an
amount not to exceed:

 

(a)           the lesser of (i) the net assets of
the General Partner and (ii) the amount of such obligations to the extent that
there is recourse, by contract or operation of law, to the property or assets
of such Person or a Restricted Subsidiary of such Person; or

 

(b)           if less than the amount determined
pursuant to clause (a) immediately above, the actual amount of such
Indebtedness that is recourse to such Person or a Restricted Subsidiary of such
Person, if the Indebtedness is evidenced by a writing and is for a determinable
amount.

 

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

 

“Interest Rate Agreement” means, with respect
to any Person, any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedge agreement or other similar agreement or arrangement as to which such Person
is party or a beneficiary.

 

“Intermediate Parent” means any Subsidiary of
the Parent all of the Capital Stock of which (other than directors’ qualifying
shares) is owned directly or indirectly by the Parent and which owns, directly
or indirectly, all of the Capital Stock (other than directors’ qualifying
shares) of the Company.

 

“Investment” means, with respect to any Person,
all investments by such Person in other Persons (including Affiliates) in the
form of any direct or indirect advance, loan (other than advances or extensions
of credit to customers in the ordinary course of business) or other extensions
of credit (including by way of Guarantee or similar arrangement, but excluding
any debt or extension of credit represented by a bank deposit other than a time
deposit) 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 of Capital Stock, Indebtedness
or other similar instruments issued by, such Person and all other items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided
that none of the following will be deemed to be an Investment:

 

(1)           Hedging
Obligations entered into in the ordinary course of business and in compliance
with this Indenture;

 

(2)           prepaid
expenses and endorsements of negotiable instruments and documents and
negotiable instruments held for collection, in each case in the ordinary course
of business; and

 

19

 

(3)           an
acquisition of assets, Capital Stock or other securities by the Company or a
Subsidiary for consideration to the extent such consideration consists of
Common Stock of the Company.

 

For purposes of Section 3.4, (i) “Investment”
will include the portion (proportionate to the Company’s equity interest in a
Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the
fair market value of the net assets of such Restricted Subsidiary at the time
that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company will be deemed to continue to have a
permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive)
equal to (a) the Company’s “Investment” in such Subsidiary at the time of such
redesignation less (b) the portion (proportionate to the Company’s equity
interest in such Subsidiary) of the fair market value of the net assets (as
conclusively determined by the Board of Directors of the Company in good faith)
of such Subsidiary at the time that such Subsidiary is so redesignated a
Restricted Subsidiary; and (ii) any property transferred to or from an
Unrestricted Subsidiary will be valued at its fair market value at the time of
such transfer, in each case as determined in good faith by the Board of
Directors of the Company.

 

“Issue Date” means April 12, 2006.

 

“Joint Venture” means any Person, other than an
individual or a Subsidiary of the Company, (i) in which the Company or a
Subsidiary Guarantor holds or acquires an ownership interest (whether by way of
Capital Stock or otherwise) and (ii) which is engaged in a Related Business.

 

“Legal Holiday” has the meaning ascribed to it
in Section 11.8.

 

“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).

 

“Management Agreement” means the Management
Agreement between the Company and MidOcean US Advisor, LP (and its permitted
successors and assigns thereunder) as in effect on the Issue Date or as
amended; provided that any amendment is not materially adverse to the Holders
of the Notes and does not provide for any additional fees payable under the
Management Agreement.

 

“MidOcean” means MidOcean Partners, LP and
MidOcean Partners II, LP and their Affiliates.

 

“Net Available Cash” from an Asset Disposition
or Recovery Event means cash payments received (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise and net 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 any acquiring person of Indebtedness or other obligations
relating to the properties or assets that are the subject of such Asset
Disposition or Recovery Event or received in any other non-cash form)
therefrom, of net of:

 

20

 

(1)           all
legal, accounting, investment banking, title and recording tax expenses,
commissions and other fees and expenses Incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP (after taking into account any available tax credits or
deductions and any tax sharing agreements), as a consequence of such transaction;

 

(2)           all
payments made on any Indebtedness which is secured by any assets subject to
such transaction, in accordance with the terms of any Lien upon such assets, or
which must by its terms, or in order to obtain a necessary consent to such
transaction, or by applicable law be repaid out of the proceeds from such
transaction;

 

(3)           all
distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such transaction; and

 

(4)           the
deduction of appropriate amounts to be provided as a reserve, in accordance
with GAAP, against any liabilities associated with the assets disposed of in
such transaction and retained by the Company or any Restricted Subsidiary after
such transaction.

 

“Net Award” means any awards or proceeds in
respect of any condemnation or other eminent domain proceeding relating to any
property.

 

“Net Cash Proceeds” with respect to any
issuance or sale of Capital Stock means the cash proceeds of such issuance or
sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement
agents’ fees, listing fees, discounts or commissions and brokerage, consultant
and other fees and charges actually Incurred in connection with such issuance
or sale and net of taxes paid or payable as a result of such issuance or sale
(after taking into account any available tax credit or deductions and any tax
sharing arrangements); provided
that the cash proceeds of an Equity Offering by Holdings shall not be deemed
Net Cash Proceeds, except to the extent such cash proceeds are contributed to
the Company.

 

“Net Insurance Proceeds” means any awards or
proceeds in respect of any casualty insurance or title insurance claim relating
to any property.

 

“Non-Recourse Indebtedness” means Indebtedness
of a Person:

 

(1)           as
to which neither the Company nor any Restricted Subsidiary (a) provides any
Guarantee or credit support of any kind (including any undertaking, guarantee,
indemnity, agreement or instrument that would constitute Indebtedness but
excluding a non-recourse pledge of the Capital Stock of such Unrestricted
Subsidiary) or (b) is directly or indirectly liable (as a guarantor or
otherwise);

 

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

 

21

 

(3)           the
explicit terms of which provide there is no recourse against any of the assets
of the Company or its Restricted Subsidiaries.

 

“Note Guarantee” means, individually, any
guarantee of payment of the Notes (including any Exchange Notes issued in a
registered Exchange Offer pursuant to the Registration Rights Agreement) by a
Note Guarantor pursuant to the terms of this Indenture and any supplemental
indenture thereto, and, collectively, all such Guarantees.

 

“Note Guarantors” means Parent and the
Subsidiary Guarantors.

 

“Note Register” means the register of Notes,
maintained by the Registrar, pursuant to Section 2.3.

 

“Notes” means the Notes issued under this
Indenture.

 

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

 

“Offering Memorandum” means the Offering Memorandum,
dated March 29, 2006 relating to the issuance of the Notes.

 

“Officer” means the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Treasurer or the Secretary of the Company or, in the event that
the Company is a partnership or a limited liability company that has no such
officers, a person duly authorized under applicable law by the general partner,
managers, members or a similar body to act on behalf of the Company.  Officer of any Subsidiary Guarantor has a
correlative meaning.

 

“Officers’ Certificate” means a certificate
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company.

 

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

 

“Parent” means Palace Entertainment Holdings,
Inc., a Delaware corporation.  “Parent
Guarantee” means the Note Guarantee of Parent.

 

“Pari Passu Indebtedness” means Indebtedness
that ranks equally in right of payment to the Notes.

 

“Park Management Agreement” means any contract
for the management and operation of water parks and/or family entertainment
centers by the Company and/or any of its Restricted Subsidiaries; provided, that (i) the initial term of the
contract is no earlier than eight years, (ii) the contract provides for a fee
to, or the sharing of revenue by, the Company and/or the Restricted Subsidiary
based on a measure of the performance of the park under management and (iii)
the contract is not subject to cancellation except for customary events of
defaults for contracts of such nature (other than events of default that are based
on the performance of the

 

22

 

Company and/or the Restricted Subsidiary under the contract).  When pro forma effect is to be given to any
Park Management Agreement under this Indenture, such pro forma effect will be
calculated based on the historical performance of any park that is being
managed pursuant to the Park Management Agreement calculated for the most
recently complete four quarterly period in accordance with GAAP and after
reduction for any additional costs by the Company and/or its Restricted
Subsidiary in connection with performing its services under the contract.

 

“Permitted Holders” means MidOcean Partners,
L.P.  and its Affiliates, any existing
senior management on the Is sue Date who hold Capital Stock of Parent or the
Company and any Person acting in the capacity of an underwriter with respect to
a distribution of Capital Stock of Parent or the Company so long as it is
acting in its capacity as an underwriter.

 

“Permitted Investment” means an Investment by
the Company or any Restricted Subsidiary in:

 

(1)           a
Subsidiary Guarantor or a Person which will, upon the making of such
Investment, become a Subsidiary Guarantor; provided, however, that the primary business of
such Subsidiary Guarantor is a Related Business;

 

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

 

(3)           cash
and Cash Equivalents;

 

(4)           receivables
owing to the Company or any Restricted Subsidiary 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 the Company or any such Restricted
Subsidiary deems reasonable under the circumstances;

 

(5)           payroll,
travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses for accounting purposes and
that are made in the ordinary course of business;

 

(6)           loans
or advances to employees of the Company and its Restricted Subsidiaries made in
the ordinary course of business consistent with past practices of the Company
or such Restricted Subsidiary in an aggregate amount at any one time
outstanding not to exceed $1.0 million (loans or advances that are forgiven
shall continue to be deemed outstanding);

 

(7)           Capital
Stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of a
debtor;

 

23

 

(8)           Investments
made as a result of the receipt of non-cash consideration from an Asset
Disposition that was made pursuant to and in compliance with Section 3.8;

 

(9)           Investments
in existence on the Issue Date;

 

(10)         Currency
Agreements, Interest Rate Agreements, and related Hedging Obligations, which
transactions or obligations are Incurred in compliance with Section 3.3;

 

(11)         Investments
by the Company or any of its Restricted Subsidiaries, together with all other
Investments pursuant to this clause (11), in an aggregate amount at the time of
such Investment not to exceed $5.0 million outstanding at any one time (with
the fair market value of such Investment being measured at the time made and
without giving effect to subsequent changes in value);

 

(12)         Guarantees
issued in accordance with Section 3.3; and

 

(13)         Investments
in negotiable instruments held for collection and lease, utility and workers
compensation, performance and other similar deposits made in the ordinary
course of business.

 

“Permitted Liens” means, with respect to any
Person:

 

(1)           Liens
securing Pari Passu Indebtedness and other obligations under a Credit Facility
and related Hedging Obligations and liens on assets of Restricted Subsidiaries
securing Guarantees of Pari Passu Indebtedness and other obligations of the
Company under a Credit Facility permitted to be Incurred under this Indenture
in an aggregate principal amount not to exceed the greater of (A) (x) the
amount set forth under the provisions described in clause (1) of the second
paragraph of Section 3.3 plus (y) $33.0 million less all principal
repayments with the proceeds from Asset Dispositions utilized in accordance
with clause 3(a) of Section 3.8 in excess of $44.0 million and (B)
provided that the Consolidated Leverage Ratio for the Company and its
Restricted Subsidiaries is not greater than 4.00 to 1.00, 250% of Consolidated
EBITDA after giving effect on a pro forma basis (in the same manner as the
Consolidated Leverage Ratio is calculated) to the transaction giving rise to
the need to compute Consolidated EBITDA; provided
that there shall be only one collateral agent with respect to all such
Indebtedness;

 

(2)           pledges
or deposits by such Person under workmen’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness) or
leases to which such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposits of cash or United States
government bonds to secure surety or appeal bonds to which such Person is a
party, or deposits as security for contested taxes or import or customs duties
or for the payment of rent, in each case Incurred in the ordinary course of
business;

 

(3)           Liens
imposed by law, including carriers’, warehousemen’s, mechanics’, materialmen’s
and repairmen’s Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings if a reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made in
respect thereof;

 

24

 

(4)           Liens
for taxes, assessments or other governmental charges not yet subject to
penalties for non-payment or which are being contested in good faith by
appropriate proceedings provided appropriate reserves required pursuant to GAAP
have been made in respect thereof;

 

(5)           Liens
in favor of issuers of appeal, surety or performance bonds or letters of credit
or bankers’ acceptances issued pursuant to the request of and for the account
of such Person in the ordinary course of its business; provided,
however, that such letters of credit do not constitute Indebtedness;

 

(6)           encumbrances,
ground leases, easements or reservations of, or rights of others for, licenses,
rights of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning, building codes or other restrictions (including,
without limitation, minor defects or irregularities in title and similar
encumbrances) as to the use of real properties or liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which do not in the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of the business of
such Person;

 

(7)           Liens
securing Hedging Obligations so long as the related Indebtedness is, and is
permitted to be under this Indenture, secured by a Lien on the same property
securing such Hedging Obligation;

 

(8)           leases,
licenses, subleases and sublicenses of assets (including, without limitation,
real property and intellectual property rights) which do not materially interfere
with the ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries;

 

(9)           judgment
Liens not giving rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been duly initiated
for the review of such judgment have not been finally terminated or the period
within which such proceedings may be initiated has not expired;

 

(10)         Liens
arising solely by virtue of any statutory or common law provisions relating to
banker’s Liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a depositary institution; provided
that:

 

(a)           such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated
by the Federal Reserve Board; and

 

(b)           such deposit account is not intended
by the Company or any Restricted Subsidiary to provide collateral to the
depository institution;

 

(11)         Liens
arising from Uniform Commercial Code financing statement filings regarding
operating leases entered into by the Company and its Restricted Subsidiaries in
the ordinary course of business;

 

(12)         Liens
existing on the Issue Date;

 

25

 

(13)         Liens

 

(a)           on property or shares of stock of a
Person at the time such Person becomes a Restricted Subsidiary; provided,
however, that such Liens are not created, Incurred or assumed in
connection with, or in contemplation of, such other Person becoming a
Restricted Subsidiary; provided  further, however,
that any such Lien may not extend to any other property owned by the Company or
any Restricted Subsidiary;

 

(b)           on property at the time the Company
or a Restricted Subsidiary acquired the property, including any acquisition by
means of a merger or consolidation with or into the Company or any Restricted
Subsidiary; provided, however, that such Liens are not created,
Incurred or assumed in connection with, or in contemplation of, such
acquisition; provided  further, however,
that such Liens may not extend to any other property owned by the Company or
any Restricted Subsidiary; and

 

(c)           for the purpose of securing the
payment of all or a part of the purchase price of, or Capitalized Lease
Obligations, purchase money obligations or other payments Incurred to finance
the acquisition, lease, improvement or construction of, assets or property
acquired or constructed in the ordinary course of business; provided that (1) the aggregate principal
amount of Indebtedness secured by such Liens is otherwise permitted to be
Incurred under this Indenture and does not exceed the cost of the assets or
property so acquired or constructed, and (2) such Liens are created within 180
days of construction or acquisition of such assets or property and do not
encumber any other assets or property of the Company or any Restricted
Subsidiary other than such assets or property and assets affixed or appurtenant
thereto;

 

provided that the aggregate amount of the
Indebtedness subject to the Liens under this clause (13) (together with
any Refinancing Indebtedness secured by a Lien permitted by clause (15) that
refinanced Indebtedness secured pursuant to this clause (13)) at any time outstanding
shall not exceed the greater of (A) $7.5 million and (B) 4.5% of Consolidated
Total Assets; provided, further, that this clause (13) may not be
used to secure Indebtedness and other obligations under the Senior Secured
Credit Agreement;

 

(14)         Liens
securing the Notes and Note Guarantees;

 

(15)         Liens
securing Refinancing Indebtedness Incurred to refinance, refund, replace,
amend, extend or modify, as a whole or in part, Indebtedness that was
previously so secured pursuant to clauses (12), (13), (14), (15) and (17), provided that any such Lien is limited to
all or part of the same property or assets (plus improvements, accessions,
proceeds or dividends or distributions in respect thereof) that secured (or,
under the written arrangements under which the original Lien arose, could
secure) the Indebtedness being refinanced or is in respect of property that is
the security for a Permitted Lien hereunder;

 

(16)         any
interest or title of a lessor under any Capitalized Lease Obligation or
operating lease; and

 

(17)         Liens
securing Pari Passu Indebtedness; provided
that the aggregate amount of the Indebtedness subject to the Liens under this
clause (17) (together with any

 

26

 

Refinancing Indebtedness secured by a Lien permitted by clause (15)
that refinanced Indebtedness secured pursuant to this clause (17)) plus the
aggregate amount of the Indebtedness subject to the Liens under clause (13)
above (together with any Refinancing Indebtedness secured by a Lien permitted by
clause (15) that refinanced Indebtedness secured pursuant to clause (13) above)
at any time outstanding shall not exceed the greater of (A) $10.0 million and
(B) provided that the Consolidated Leverage Ratio for the Company and its
Restricted Subsidiaries is not greater than 4.00 to 1.00, 3.0% of Consolidated
Total Assets.

 

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

 

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

 

“QIB” means any “qualified institutional buyer”
(as defined in Rule 144A under the Securities Act).

 

“Quotation Agent” means one of the Reference
Treasury Dealers selected by the Trustee as directed by the Company.

 

“Real Estate Operating Leases” means long-term
operating leases of the Company or its Subsidiaries for real estate on which
water parks or family entertainment centers are operated that are entered into
in the ordinary course of business and consistent with past practices of the
Company and its Subsidiaries.

 

“Recovery Event” means any event, occurrence,
claim or proceeding that results in any Net Award or Net Insurance Proceeds.

 

“Reference Treasury Dealer” means three
nationally recognized investment banking firms selected by the Company that are
primary U.S. Government securities dealers.

 

“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 Is sue, 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.

 

“Refinancing Indebtedness” means Indebtedness
that is Incurred to refund, refinance, replace, exchange, renew, repay or
extend (including pursuant to any defeasance or discharge mechanism)
(collectively, “refinance,” “refinances,” and “refinanced” shall have a
correlative meaning) any Indebtedness existing on the date of this Indenture or
Incurred in compliance with this Indenture (including Indebtedness of the
Company that refinances Indebtedness of any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary that

 

27

 

refinances Indebtedness of another Restricted Subsidiary) including
Indebtedness that refinances Refinancing Indebtedness; provided,
however, that:

 

(1)           (a)
if the Stated Maturity of the Indebtedness being refinanced is earlier than the
Stated Maturity of the Notes, the Refinancing Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the Indebtedness being
refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced
is later than the Stated Maturity of the Notes, the Refinancing Indebtedness
has a Stated Maturity at least 91 days later than the Stated Maturity of the
Notes;

 

(2)           the
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 is Incurred in an aggregate principal amount (or if
issued with original issue discount, an aggregate issue price) that is equal to
or less than the sum of the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of the
Indebtedness being refinanced (plus, without duplication, any additional
Indebtedness Incurred to pay interest or premiums required by the instruments
governing such existing Indebtedness and fees Incurred in connection
therewith); and

 

(4)           if
the Indebtedness being refinanced is subordinated in right of payment to the
Notes or the Subsidiary Guarantee, such Refinancing Indebtedness is
subordinated in right of payment to the Notes or the Subsidiary Guarantee on
terms at least as favorable to the Holders as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.

 

“Registration Rights Agreement” means that
certain registration rights agreement dated as of the date of this Indenture by
and among the Company, Parent, the Subsidiary Guarantors and the initial
purchasers set forth therein and, with respect to any Additional Notes, one or
more substantially similar registration rights agreements among the Company,
Parent, the Subsidiary Guarantors and the other parties thereto as such
agreement may be amended from time to time.

 

“Related Business” means any business which is
the same as or related, ancillary or complementary to, or a reasonable
extension of, any of the businesses of the Company and its Restricted
Subsidiaries on the date of this Indenture.

 

“Responsible Officer” shall mean, when used
with respect to the Trustee, any officer within the corporate trust department
of the Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other officer of
the Trustee who customarily performs functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of such person’s knowledge of
and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.

 

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

 

28

 

“Restricted Note” means a Note that constitutes
a “restricted security” within the meaning of Rule 144(a)(3) under the
Securities Act; provided, however, that the Trustee shall be
entitled to request and conclusively rely on an opinion of counsel with respect
to whether any Note constitutes a Restricted Note.

 

“Restricted Notes Legend” means the Private
Placement Legend set forth in clause (A) of Section 2.1(d) or the
Regulation S Legend set forth in clause (B) of Section 2.1(d), as
applicable.

 

“Restricted Subsidiary” means any Subsidiary of
the Company other than an Unrestricted Subsidiary.

 

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

 

“SEC” means the United States Securities and
Exchange Commission.

 

“Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations of the SEC promulgated
thereunder.

 

“Senior Secured Credit Agreement” means the
Credit Agreement to be entered into among Parent, the Company, or any
Subsidiary thereof, General Electric Capital Corporation, as Administrative
Agent, and the lenders parties thereto from time to time, as the same may be
amended, supplemented, restated, modified, renewed, refunded, replaced or
refinanced in whole or in part from time to time (including increasing the
amount loaned thereunder provided that such additional Indebtedness is Incurred
in accordance with Section 3.3); provided
that a Senior Secured Credit Agreement shall not (i) relate to Indebtedness
that does not consist exclusively of Pari Passu Indebtedness or Guarantor Pari
Passu Indebtedness or (ii) with respect to any Indebtedness that is not
initially represented by a term loan or similar fixed outstanding amount,
include Indebtedness issued, created or Incurred pursuant to a registered
offering of securities under the Securities Act or a private placement of
securities (including under Rule 1 44A or Regulation S) pursuant to an
exemption from the registration requirements of the Securities Act.

 

“Shelf Registration Statement” shall have the
meaning set forth in the Registration Rights Agreement.

 

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

 

“Stated Maturity” means, with respect to any
security, the date specified in such security as the fixed date on which the
payment of principal of such security is due and payable, including pursuant to
any mandatory redemption provision, but shall not include any contingent
obligations to repay, redeem or repurchase any such principal prior to the date
originally scheduled for the payment thereof.

 

29

 

“Subordinated Obligation” means any
Indebtedness of the Company (whether outstanding on the Is sue Date or
thereafter Incurred) which is subordinated or junior in right of payment to the
Notes pursuant to a written agreement.

 

“Subsidiary” of any Person means (a) any
corporation, association or other business entity (other than a partnership,
joint venture, limited liability company or similar entity) of which more than
50% of the total ordinary voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof (or persons performing similar
functions) or (b) any partnership, joint venture, limited liability company or
similar entity of which more than 50% of the capital accounts, distribution
rights, total equity and voting interests or general or limited partnership
interests, as applicable, is, in the case of clauses (a) and (b), 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.  Unless
otherwise specified herein, each reference to a Subsidiary will refer to a
Subsidiary of the Company.

 

“Subsidiary Guarantee” means any Note Guarantee
of a Subsidiary Guarantor.

 

“Subsidiary Guarantor” means each Restricted
Subsidiary in existence on the Issue Date that provides a Subsidiary Guarantee
on the Issue Date (and any other Restricted Subsidiary that provides a
Subsidiary Guarantee in accordance with this Indenture); provided that upon release or discharge of
such Restricted Subsidiary from its Subsidiary Guarantee in accordance with
this Indenture, such Restricted Subsidiary ceases to be a Subsidiary Guarantor.

 

“Successor Company” shall have the meaning
assigned thereto in Section 4.1(a)(1).

 

“TIA” or “Trust Indenture Act” means the
Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as in
effect from time to time.

 

“Transactions” means the transactions
contemplated by the Acquisition Agreement, the Equity Contribution, the entry
into the Senior Secured Credit Agreement, the entering into the employment
agreements with John A. Cora, Daniel S. Martinez and James “Chip” Cleary, the
issuance of the Notes, the application of the proceeds therefrom and the
payment of related fees and expenses as provided in the Offering Memorandum.

 

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

 

“Unrestricted Subsidiary” means:

 

(1)           any
Subsidiary of the Company that at the time of determination shall be designated
an Unrestricted Subsidiary by the Board of Directors of the Company in the
manner provided below; and

 

(2)           any
Subsidiary of an Unrestricted Subsidiary.

 

30

 

The Board of Directors of the Company may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary or a Person becoming a Subsidiary through merger or consolidation or
Investment therein) to be an Unrestricted Subsidiary only if:

 

(1)           such
Subsidiary or any of its Subsidiaries does not own any Capital Stock or
Indebtedness of or have any Investment in, or own or hold any Lien on any
property of, any other Subsidiary of the Company which is not a Subsidiary of
the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary;

 

(2)           all
the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of
designation, and will at all times thereafter, consist of Non-Recourse
Indebtedness;

 

(3)           such
designation and the Investment of the Company in such Subsidiary complies with Section
3.4;

 

(4)           such
Subsidiary, either alone or in the aggregate with all other Unrestricted
Subsidiaries, does not operate, directly or indirectly, all or substantially
all of the business of the Company and its Subsidiaries;

 

(5)           such
Subsidiary is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation:

 

(a)           to subscribe for additional Capital
Stock of such Person; or

 

(b)           to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; and

 

(6)           on
the date such Subsidiary is designated an Unrestricted Subsidiary, such
Subsidiary is not a party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary with terms
substantially less favorable to the Company than those that might have been
obtained from Persons who are not Affiliates of the Company.

 

Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by filing with the Trustee a
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers’ Certificate certifying that such designation
complies with the foregoing conditions. 
If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.

 

The Board of Directors of the Company may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof and the Company could
(i) Incur at least $1.00 of additional Indebtedness under the first paragraph
of Section 3.3 or (ii) Incur any applicable Indebtedness of the newly
designated Restricted Subsidiary under the second paragraph of Section 3.3,
in each case on a pro forma basis taking into account such designation.

 

31

 

“U.S. Government Obligations” means securities
that are (a) direct obligations of the United States of America for the timely
payment of which its full faith and credit is pledged or (b) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation of the United States of America,
which, in either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depositary receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with
respect to any such U.S. Government Obligations or a specific payment of
principal of or interest on any such U.S. Government Obligations held by such
custodian for the account of the holder of such depositary receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligations or the specific payment
of principal of or interest on the U.S. Government Obligations evidenced by
such depositary receipt.

 

“Voting Stock” of a Person means all classes of
Capital Stock of such Person then outstanding and normally entitled to vote in
the election of directors, managers or trustees, as applicable.

 

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

 

Other Definitions.

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Additional Interest
  Notice”

  	
   

  	
  3.22

  
	
  “Additional Notes”

  	
   

  	
  Recitals

  
	
  “Additional Restricted
  Notes”

  	
   

  	
  2.1(b)

  
	
  “Affiliate Transaction”

  	
   

  	
  3.9(a)

  
	
  “Agent Members”

  	
   

  	
  2.1(e)

  
	
  “Asset Disposition
  Offer”

  	
   

  	
  3.8(b)

  
	
  “Asset Disposition
  Offer Amount”

  	
   

  	
  3.8(c)

  
	
  “Asset Disposition
  Offer Period”

  	
   

  	
  3.8(c)

  
	
  “Asset Disposition
  Purchase Date”

  	
   

  	
  3.8(c)

  
	
  “Authenticating Agent”

  	
   

  	
  2.2

  
	
  “Change of Control
  Offer”

  	
   

  	
  3.10(b)

  
	
  “Change of Control
  Payment”

  	
   

  	
  3.10(b)

  
	
  “Change of Control
  Payment Date”

  	
   

  	
  3.10(b)

  
	
  “Company”

  	
   

  	
  Recitals

  
	
  “Company Order”

  	
   

  	
  2.2

  
	
  “covenant defeasance
  option”

  	
   

  	
  8.1(b)

  
	
  “cross acceleration
  provision”

  	
   

  	
  6.1

  
	
  “Defaulted Interest”

  	
   

  	
  2.14

  
	
  “Event of Default”

  	
   

  	
  6.1

  
	
  “Exchange Global Note”

  	
   

  	
  2.1(b)

  

 

32

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Exchange Notes”

  	
   

  	
  Recitals

  
	
  “Excess Proceeds”

  	
   

  	
  3.8(b)

  
	
  “General Partner”

  	
   

  	
  1.1

  
	
  “Global Notes”

  	
   

  	
  2.1(b)

  
	
  “IAI”

  	
   

  	
  2.1(b)

  
	
  “Initial Notes”

  	
   

  	
  Recitals

  
	
  “Institutional
  Accredited Investor Global Note”

  	
   

  	
  2.1(b)

  
	
  “Institutional
  Accredited Investor Notes”

  	
   

  	
  2.1(b)

  
	
  “Issuers”

  	
   

  	
  Recitals

  
	
  “judgment default
  provision”

  	
   

  	
  6.1

  
	
  “JV”

  	
   

  	
  1.1

  
	
  “legal defeasance
  option”

  	
   

  	
  8.1(b)

  
	
  “Note Register”

  	
   

  	
  2.3

  
	
  “Notes”

  	
   

  	
  Recitals

  
	
  “Obligations”

  	
   

  	
  10.1

  
	
  “Palace Finance”

  	
   

  	
  Recitals

  
	
  “Palace Funding”

  	
   

  	
   

  
	
  “Parent”

  	
   

  	
  Recitals

  
	
  “Pari Passu Notes”

  	
   

  	
  3.8(b)

  
	
  “Paying Agent”

  	
   

  	
  2.3

  
	
  “payment default”

  	
   

  	
  6.1

  
	
  “Permitted Holdings
  Payments”

  	
   

  	
  3.4(b)

  
	
  “Private Placement
  Legend”

  	
   

  	
  2.1(d)

  
	
  “Redemption Date”

  	
   

  	
  5.5

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Regulation S”

  	
   

  	
  2.1(b)

  
	
  “Regulation S Global
  Note”

  	
   

  	
  2.1(b)

  
	
  “Regulation S Legend”

  	
   

  	
  2.1(d)

  
	
  “Regulation S Notes”

  	
   

  	
  2.1(b)

  
	
  “Resale Restriction
  Termination Date”

  	
   

  	
  2.6(a)

  
	
  “Restricted Payment”

  	
   

  	
  3.4(a)

  
	
  “Restricted Period”

  	
   

  	
  2.1(b)

  
	
  “Rule 144A Global Note”

  	
   

  	
  2.1(b)

  
	
  “Rule 144A Note”

  	
   

  	
  2.1(b)

  
	
  “Series B Global Note”

  	
   

  	
  2.1(b)

  
	
  “Special Interest
  Payment Date”

  	
   

  	
  2.14(a)

  
	
  “Special Record Date”

  	
   

  	
  2.14(a)

  
	
  “Successor Company”

  	
   

  	
  3.14

  
	
  “Successor Parent”

  	
   

  	
  4.1

  
	
  “Trustee”

  	
   

  	
  Recitals

  

 

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

 

33

 

“Commission” means the SEC.

 

“indenture notes” means the Notes.

 

“indenture security holder” means a Noteholder.

 

“indenture to be qualified” means this Indenture.

 

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

 

“obligor” on this Indenture securities means the
Issuers and any other obligor on this Indenture securities.

 

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

 

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

 

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

 

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

 

(3)           “or”
is not exclusive;

 

(4)           “including”
means including without limitation;

 

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

 

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

 

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

 

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

 

(9)           “$”
and “U.S. dollars” each refer to United States dollars, or such other money of
the United States of America that at the time of payment is legal tender for
payment of public and private debts.

 

34

 

ARTICLE II

 

The Notes

 

SECTION
2.1         Form, Dating and Terms.  Section 2.2 
The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is unlimited. 
The Initial Notes issued on the date hereof will be in an aggregate
principal amount of $150,000,000.  In
addition, the Issuers may issue, from time to time in accordance with the
provisions of this Indenture, including, without limitation, Section 3.3(a)
hereof, Additional Notes and Exchange Notes. 
Furthermore, Notes may be authenticated and delivered upon registration
or transfer, or in lieu of, other Notes pursuant to Section 2.6, 2.10, 2.12 or
9.5 or in connection with an Asset Disposition Offer pursuant to Section 3.8 or
a Change of Control Offer pursuant to Section 3.10.

 

The Initial Notes shall be known and designated as “10
7/8% Senior Notes, Series A, due 2014” of the Issuers.  Additional Notes issued as Restricted Notes
shall be known and designated as “10 7/8% Senior Notes, Series A, due 2014” of
the Issuers.  Additional Notes issued
other than as Restricted Notes shall be known and designated as “10 7/8% Senior
Notes, Series B, due 2014” of the Issuers, and Exchange Notes shall be known
and designated as “10 7/8% Senior Notes, Series B, due 2014” of the Issuers.

 

With respect to any Additional Notes, the Issuers
shall set forth in (a) a Board Resolution and (b)(i) an Officers’ Certificate
or (ii) one or more indentures supplemental hereto, the following information:

 

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

 

(ii)           the issue price and the issue date of
such Additional Notes; and

 

(iii)          whether such Additional Notes shall be
Restricted Notes issued in the form of Exhibit A hereto and/or shall be issued
in the form of Exhibit B hereto.

 

The Initial Notes, the Additional Notes and the
Exchange Notes shall be considered collectively as a single class for all
purposes of this Indenture.  Holders of
the Initial Notes, the Additional Notes and the Exchange Notes shall vote and
consent together on all matters to which such Holders are entitled to vote or
consent as one class, and none of the Holders of the Initial Notes, the
Additional Notes or the Exchange Notes shall have the right to vote or consent
as a separate class on any matter to which such Holders are entitled to vote or
consent.

 

(b)           The
Initial Notes are being offered and sold by the Issuers pursuant to a Purchase
Agreement, dated March 29, 2006, among Palace Funding (merged with and into the
Company on the date hereof), Parent and J.P. 
Morgan Securities Inc., as representative of the initial purchasers
named therein as amended by the Joinder Agreement dated as of April 12,
2006, executed by the Issuers and each of the Subsidiary Guarantors.  The Initial Notes and any Additional Notes
(if issued as Restricted Notes) (“Additional Restricted Notes”) shall be
resold initially only to (A) QIBs and (B) Persons other than U.S. Persons (as
defined in Regulation S under the Securities Act (“Regulation S”)) in
reliance on Regulation S.  Such Initial
Notes and

 

35

 

Additional Restricted Notes may thereafter be transferred to, among
others, QIBs, purchasers in reliance on Regulation S and institutional
“accredited investors” (as defined in Rules 501(a)(1), (2), (3) and (7) under
the Securities Act) who are not QIBs (“IAIs”) in accordance with Rule
501 of the Securities Act in accordance with the procedure described
herein.  Additional Notes offered after
the date hereof may be offered and sold by the Company from time to time pursuant
to one or more purchase agreements in accordance with applicable law.

 

Initial Notes and Additional Restricted Notes offered
and sold to QIBs in the United States of America in reliance on Rule 144A (the
“Rule 144A Notes”) shall be issued in the form of a permanent global
Note substantially in the form of Exhibit A, which is hereby incorporated by
reference and made a part of this Indenture, including appropriate legends as
set forth in Section 2.1(d) (the “Rule 144A Global Note”),
deposited with the Notes Custodian, duly executed by the Issuers and
authenticated by the Trustee as hereinafter provided.  The Rule 144A Global Note may be represented
by more than one certificate, if so required by the Depositary’s rules
regarding the maximum principal amount to be represented by a single
certificate.  The aggregate principal
amount of the Rule 144A Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee, as hereinafter provided.

 

Initial Notes and any Additional Restricted Notes
offered and sold outside the United States of America (the “Regulation S
Notes”) in reliance on Regulation S shall be issued in the form of a global
Note, without interest coupons, substantially in the form of Exhibit A
including appropriate legends as set forth in Section 2.1(d) (the “Regulation
S Global Note”) Each Regulation S Global Note shall be deposited upon
issuance with the Notes Custodian in the manner described in this Article II
for credit by the Depositary to the respective accounts of the purchasers (or
to such other accounts as they may direct), including, but not limited to,
accounts at Euroclear or Clearstream. 
Prior to the 40th day after the later of the commencement of the offering
of the Initial Securities and the Issue Date (such period through and including
such 40th day, the “Restricted Period”), interests in the Regulation S
Global Note may only be transferred to non-U.S. persons pursuant to Regulation
S, unless exchanged for interests in a Global Note in accordance with the
transfer and certification requirements described herein.

 

Investors may hold their interests in the Regulation S
Global Note directly through Euroclear or Clearstream, if they are participants
in such systems, or indirectly through organizations that are participants in
such systems.  Investors may also hold
such interests through organizations other than Euroclear or Clearstream that
are participants in the Depositary’s system. 
If interests in the Regulation S Global Note are held through Euroclear
or Clearstream, Euroclear and Clearstream shall hold such interests in the
Regulation S Global Note through the Depositary on behalf of their participants
through customers’ securities accounts in their respective names on the books
of their respective depositaries.  Such
depositaries, in turn, shall hold such interests in the applicable Regulation S
Global Note in customers’ securities accounts in the depositaries’ names on the
books of the Depositary.  The Regulation
S Global Note may be represented by more than one certificate, if so required
by the Depositary’s rules regarding the maximum principal amount to be
represented by a single certificate.  The
aggregate principal amount of the Regulation S Global Note may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, and the Depositary or its nominee, as hereinafter provided.

 

36

 

Initial Notes and any Additional Restricted Notes
resold to IAIs (the “Institutional Accredited Investor Notes”) in the
United States of America shall be issued in the form of a permanent global Note
substantially in the form of Exhibit A including appropriate legends as set
forth in Section 2.1(d) (the “Institutional Accredited Investor
Global Note”) deposited with the Notes Custodian, duly executed by the
Issuers and authenticated by the Trustee as hereinafter provided.  The Institutional Accredited Investor Global
Note may be represented by more than one certificate, if so required by the
Depositary’s rules regarding the maximum principal amount to be represented by
a single certificate.  The aggregate
principal amount of the Institutional Accredited Investor Global Note may from
time to time be increased or decreased by adjustments made on the records of
the Trustee and the Depositary, as hereinafter provided.

 

Exchange Notes exchanged for interests in the Rule
144A Note, the Regulation S Note and the Institutional Accredited Investor
Note, if any, as the case may be, shall be issued in the form of a permanent
global Note substantially in the form of Exhibit B hereto, which is hereby
incorporated by reference and made a part of this Indenture, deposited with the
Notes Custodian as hereinafter provided, including the appropriate legend set
forth in Section 2.1(d) hereof (the “Exchange Global Note”).  The Exchange Global Note may be represented
by more than one certificate, if so required by the Depositary’s rules
regarding the maximum principal amount to be represented by a single
certificate.

 

Any Additional Notes issued other than as Restricted
Notes shall be issued in the form of one or more permanent global Notes
substantially in the form of Exhibit B (each, a “Series B Global Note”)
deposited with the Notes Custodian, duly executed by the Issuers and
authenticated by the Trustee as hereinafter provided.  A Series B Global Note may be represented by
more than one certificate, if so required by the Depositary’s rules regarding
the maximum principal amount to be represented by a single certificate.  The aggregate principal amount of the Series
B Global Notes may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depositary or its nominee, as hereinafter
provided.

 

The Rule 144A Global Note, the Regulation S Global
Note, the Institutional Accredited Investor Global Note, if any, the Exchange
Global Note, and the Series B Global Note are sometimes collectively herein
referred to as the “Global Notes.”

 

The principal of (and premium, if any) and interest on
the Notes shall be payable at the office or agency of the Issuers maintained
for such purpose in The City of New York, or at such other office or agency of
the Issuers as may be maintained for such purpose pursuant to Section 2.3;
provided, however, that, at the option of the
Issuers, each installment of interest may be paid by (i) check mailed to
addresses of the Persons entitled thereto as such addresses shall appear on the
Note Register or (ii) wire transfer or to an account located in the United
States maintained by the payee.  Payments
in respect of Notes represented by a Global Note (including principal, premium
and interest) shall be made by wire transfer of immediately available funds to
the accounts specified by the Depositary. 
Payments in respect of Notes represented by Definitive Notes (including
principal, premium, if any, and interest) held by a Holder of at least
$1,000,000 aggregate principal amount of Notes represented by Definitive Notes
shall 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

 

37

 

the Paying Agent to such effect designating such account no later than
15 days immediately preceding the relevant due date for payment (or such other
date as the Trustee may accept).

 

The Exchange Notes shall be in the form of Exhibit
B.  The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage, in
addition to those set forth on Exhibit A and Exhibit B and in Section
2.1(d).  The Issuers shall approve
the forms of the Notes and any notation, endorsement or legend on them.  Any such notation, endorsement or legend
shall be furnished to the Trustee in writing. 
Each Note shall be dated the date of its authentication.  The terms of the Notes set forth in Exhibit
A and Exhibit B are part of the terms of this Indenture and, to the
extent applicable, the Issuers and the Trustee, by their execution and delivery
of this Indenture, expressly agree to be bound by such terms.

 

(c)           Denominations.  The Notes shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and
integral multiples of $1,000.

 

(d)           Restrictive
Legends.  Unless and until (i) an
Initial Note or an Additional Note issued as a Restricted Note is sold under an
effective registration statement or (ii) an Initial Note or an Additional Note
issued as a Restricted Note is exchanged for an Exchange Note in connection
with an effective registration statement, in each case pursuant to the
Registration Rights Agreement,

 

(A)          the Rule 144A Global Note and the
Institutional Accredited Investor Global Note shall (x) be subject to the
restrictions on transfer set forth in Section 2.6 (including those set
forth in the legend below) and (y) bear the following legend (the “Private
Placement Legend”) on the face thereof:

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. 
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.  THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE
HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUERS, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL

 

38

 

BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
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 ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

BY ITS ACQUISITION OF THIS SECURITY THE HOLDER HEREOF
WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF
THE ASSETS USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES
THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), PLAN,
ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S.
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR PROVISIONS UNDER ANY
FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR
TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF ANY ENTITY
WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH
PLAN, ACCOUNT OR ARRANGEMENT, OR (II) THE ACQUISITION AND HOLDING OF THIS
SECURITY WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION UNDER ANY APPLICABLE
SIMILAR LAW.”

 

(B)           the Regulation S Global Note shall
(x) be subject to the restrictions on transfer set forth in Section 2.6
(including those set forth in the legend below) and (y) bear the following
legend (the “Regulation S Legend”) on the face thereof:

 

39

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. 
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.  THE HOLDER OF THIS SECURITY, BY ITS
ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION
DATE”) THAT IS 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) 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 ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE
IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM.  THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

BY ITS ACQUISITION OF THIS SECURITY THE HOLDER HEREOF
REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF
A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN

 

40

 

OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S
UNDER THE SECURITIES ACT.

 

BY ITS ACQUISITION OF THIS SECURITY THE HOLDER HEREOF
WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF
THE ASSETS USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES
THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), PLAN,
ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S.
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR PROVISIONS UNDER ANY
FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR
TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF ANY ENTITY
WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH
PLAN, ACCOUNT OR ARRANGEMENT, OR (II) THE ACQUISITION AND HOLDING OF THIS
SECURITY WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION UNDER ANY APPLICABLE
SIMILAR LAW.”

 

(C)           Each Global Note, whether or not an
Initial Note, shall bear the following legend on the face thereof:

 

“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 ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN 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 DTC, 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 THIS INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

 

(e)           Book-Entry
Provisions.  (i)  This Section 2.1(e) shall apply only
to Global Notes deposited with the Notes Custodian.

 

41

 

(ii)           Each Global Note initially shall (x)
be registered in the name of the Depositary for such Global Note or the nominee
of such Depositary, (y) be delivered to the Notes Custodian for such Depositary
and (z) bear legends as set forth in Section 2.1(d).

 

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

 

(iv)          The registered Holder of a Global Note
may grant proxies and otherwise authorize any person, including Agent Members
and persons that may hold interests through Agent Members, to take any action
which a Holder is entitled to take under this Indenture or the Notes.

 

(v)           In connection with any transfer of a
portion of the beneficial interest in a Global Note pursuant to subsection (f)
of this Section 2.1 to beneficial owners who are required to hold
Definitive Notes, the Trustee shall reflect on its books and records the date
and a decrease in the principal amount of such Global Note in an amount equal
to the principal amount of the beneficial interest in the Global Note to be
transferred, and the Issuers shall execute, and the Trustee shall authenticate
and deliver, one or more Definitive Notes of like tenor and amount.

 

(vi)          In connection with the transfer of an
entire Global Note to beneficial owners pursuant to subsection (e) of this Section
2.1, such Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuers shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in such Global Note, an equal aggregate principal
amount of Definitive Notes of authorized denominations.

 

(vii)         Any Holder of a Global Note shall, by acceptance
of such Global Note, agree that transfers of beneficial interests in such
Global Note may be effected only through a book-entry system maintained by (a)
the Holder of such Global Note (or its agent) or (b) any Holder of a beneficial
interest in such Global Note, and that ownership of a beneficial interest in
such Global Note shall be required to be reflected in a book entry.

 

(f)            Definitive
Notes.  Except as provided below,
owners of beneficial interests in Global Notes shall not be entitled to receive
Definitive Notes.  If required to do so
pursuant to any applicable law or regulation, beneficial owners may obtain Definitive
Notes in exchange for

 

42

 

their beneficial interests in a Global Note upon written request in
accordance with the Depositary’s and the Registrar’s procedures.  In addition, Definitive Notes shall be
delivered to all beneficial owners in exchange for their beneficial interests
in a Global Note if (i) the Depositary notifies the Issuers that it is
unwilling or unable to continue as depositary for such Global Note or the
Depositary ceases to be a clearing agency registered under the Exchange Act, at
a time when the Depositary is required to be so registered in order to act as
Depositary, and in each case a successor depositary is not appointed by the
Issuers within 90 days of such notice or, (ii) the Issuers execute and deliver
to the Trustee and Registrar an Officers’ Certificate stating that such Global
Note shall be so exchangeable, subject to the procedures of DTC, or (iii) an
Event of Default has occurred and is continuing and the Registrar has received
a request from the Depositary.

 

(g)           Any
Definitive Note delivered in exchange for an interest in a Global Note pursuant
to Section 2.1(e)(v) or (vi) shall, except as otherwise provided
by paragraph (c) of Section 2.6, bear the applicable legend regarding
transfer restrictions applicable to the Definitive Note set forth in Section
2.1(d).

 

(h)           In
connection with the exchange of a portion of a Definitive Note for a beneficial
interest in a Global Note, the Trustee shall cancel such Definitive Note, and
the Issuers shall execute, and the Trustee shall authenticate and deliver, to
the transferring Holder a new Definitive Note representing the principal amount
not so transferred and the relevant Global Note shall be increased by an
adjustment made on the records of the Trustee and the Depositary.

 

SECTION
2.3         Execution and
Authentication.  One Officer for each
of the Issuers shall sign the Notes for the Issuers by manual or facsimile
signature.  If an Officer whose signature
is on a Note no longer holds that office at the time the Trustee authenticates
the Note, the Note shall be valid nevertheless.

 

A Note shall not be valid until an authorized
signatory of the Trustee manually authenticates the Note.  The signature of the Trustee on a Note shall
be conclusive evidence that such Note has been duly and validly authenticated
and issued under this Indenture.  A Note
shall be dated the date of its authentication.

 

At any time and from time to time after the execution
and delivery of this Indenture, the Trustee shall authenticate and make
available for delivery: (1) Initial Notes for original issue on the Issue Date
in an aggregate principal amount of $150,000,000, (2) subject to the terms of
this Indenture, Additional Notes for original issue in an unlimited principal
amount and (3) Exchange Notes for issue only in an Exchange Offer pursuant to a
Registration Rights Agreement or upon resale under an effective Shelf
Registration Statement, and only in exchange for Initial Notes or Additional
Notes, as the case may be, of an equal principal amount, in each case upon a
written order of the Issuers signed by two Officers or by an Officer and either
a Treasurer or an Assistant Secretary of the Issuers (the “Company’s Order”)
..  Such Company’s Order shall specify the
amount of the Notes to be authenticated and the date on which the original
issue of Notes is to be authenticated and whether the Notes are to be Initial
Notes, Additional Notes or Exchange Notes.

 

43

 

The Trustee may (at the expense of the Issuers)
appoint an agent (the “Authenticating Agent”) reasonably acceptable to
the Issuers to authenticate the Notes. 
Unless limited by the terms of such appointment, any such Authenticating
Agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.

 

In case the Company, pursuant to Article IV
shall be consolidated or merged with or into any other Person or shall convey,
transfer, lease or otherwise dispose of its properties and assets substantially
as an entirety to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the Person which shall have received a conveyance, transfer,
lease or other disposition as aforesaid, shall have executed an indenture supplemental
hereto with the Trustee pursuant to Article IV, any of the Notes
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Notes executed in the name of the
successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Notes surrendered
for such exchange and of like principal amount; and the Trustee, upon Company’s
Order of the successor Person, shall authenticate and deliver Notes as
specified in such order for the purpose of such exchange.  If Notes shall at any time be authenticated
and delivered in any new name of a successor Person pursuant to this Section
2.2 in exchange or substitution for or upon registration of transfer of any
Notes, such successor Person, at the option of the Holders but without expense
to them, shall provide for the exchange of all Notes at the time outstanding
for Notes authenticated and delivered in such new name.

 

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

 

The Issuers shall enter into an appropriate agency
agreement with any Registrar or Paying Agent 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 Issuers shall
notify the Trustee in writing of the name and address of each such agent.  If the Issuers 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 7.7.  Any of the Company or any of its Wholly Owned
Subsidiaries that is a Domestic Subsidiary may act as Paying Agent, Registrar
or transfer agent.

 

The Issuers initially appoints the Trustee as Notes
Custodian, Registrar and Paying Agent for the Notes.  The Issuers may remove any Notes Custodian,
Registrar or Paying Agent upon written notice to such Notes Custodian,
Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall
become effective until (i) acceptance of any appointment by a successor as
evidenced by an appropriate agreement entered into by the Issuers and such
successor Notes Custodian, Registrar or Paying Agent, as the case may be, and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as Notes

 

44

 

Custodian, Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. 
The Notes Custodian, Registrar or Paying Agent may resign at any time
upon written notice to the Issuers and the Trustee.

 

SECTION
2.5         Paying Agent To Hold Money
in Trust.  No later than 10:00 a.m.
(New York City time) on the date on which any principal of (premium, if any) or
interest on any Note is due and payable, the Issuers shall irrevocably deposit
with the Paying Agent a sum sufficient in immediately available funds to pay
such principal (premium, if any) or interest when due.  The Issuers shall require each Paying Agent
(other than the Trustee) to agree in writing that such Paying Agent shall hold
in trust for the benefit of the Holders or the Trustee all money held by such
Paying Agent for the payment of principal of or interest on the Notes and shall
notify the Trustee in writing of any default by the Issuers or any Note
Guarantor in making any such payment.  If
the Issuers 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 Issuers at any time may require a Paying
Agent (other than the Trustee) to pay all money held by it to the Trustee and
to account for any funds disbursed by such Paying Agent.  Upon complying with this Section 2.4, the
Paying Agent (if other than the Issuers or a Subsidiary) shall have no further
liability for the money delivered to the Trustee.  Upon any bankruptcy, reorganization or
similar proceeding with respect to the Issuers, the Trustee shall serve as
Paying Agent for the Notes.

 

SECTION
2.6         Holder 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 Holders and shall otherwise comply with TIA § 3 12(a).  If the Trustee is not the Registrar or to the
extent otherwise required under the TIA, the Issuers, on its own behalf and on
behalf of each Note Guarantor, shall furnish to the Trustee, in writing at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing within 15 days, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Holders and the Issuers shall otherwise comply with TIA § 3 12(a).

 

SECTION
2.7         Transfer and Exchange.

 

(a)           The
following provisions shall apply with respect to any proposed transfer of a
Rule 144A Note or an Institutional Accredited Investor Note prior to the date
which is two years after the later of the date of its original issue and the
last date on which the Issuers or any Affiliate of the Issuers was the owner of
such Notes (or any predecessor thereto) (the “Resale Restriction Termination
Date”):

 

(i)            a transfer of a Rule 144A Note or an
Institutional Accredited Investor Note or a beneficial interest therein to a
QIB shall be made upon the representation of the transferee in the form as set
forth on the reverse of the Note that it is purchasing the Note for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional
buyer” within the meaning of Rule 144A, 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 Issuers as it 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 its foregoing representations in order to claim the
exemption from registration provided by Rule 144A;

 

45

 

(ii)           a transfer of a Rule 1 44A Note or an
Institutional Accredited Investor Note or a beneficial interest therein to an
IAI shall be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.8 hereof from the
proposed transferee and, if requested by the Issuers or the Trustee, the
delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them; and

 

(iii)          a transfer of a Rule 144A Note or an
Institutional Accredited Investor Note or a beneficial interest therein to a
Non-U.S. Person shall be made upon receipt by the Trustee or its agent of a
certificate substantially in the form set forth in Section 2.9 hereof
from the proposed transferee and, if requested by the Issuers or the Trustee,
the delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them.

 

(b)           The
following provisions shall apply with respect to any proposed transfer of a Regulation
S Note prior to the expiration of the Restricted Period:

 

(i)            a transfer of a Regulation S Note or
a beneficial interest therein to a QIB shall be made upon the representation of
the transferee, in the form of assignment on the reverse of the certificate,
that it is purchasing the Note for its own account or an account with respect
to which it exercises sole investment discretion and that it and any such
account is a “qualified institutional buyer” within the meaning of Rule 144A,
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 Issuers 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 its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;

 

(ii)           a transfer of a Regulation S Note or
a beneficial interest therein to an IAI shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set forth in Section
2.8 hereof from the proposed transferee and, if requested by the Issuers or
the Trustee, the delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them; and

 

(iii)          a transfer of a Regulation S Note or a
beneficial interest therein to a Non-U.S. Person shall be made upon receipt by
the Trustee or its agent of a certificate substantially in the form set forth
in Section 2.9 hereof from the proposed transferee and, if requested by
the Issuers or the Trustee, receipt by the Trustee or its agent of an opinion
of counsel, certification and/or other information satisfactory to each of
them.

 

After the expiration of the Restricted Period,
interests in the Regulation S Note may be transferred in accordance with
applicable law without requiring the certification set forth in Section 2.9
or any additional certification.

 

(c)           Restricted
Notes Legend.  Upon the transfer,
exchange or replacement of Notes not bearing a Restricted Notes Legend, the
Registrar shall deliver Notes that do not bear a Restricted Notes Legend.  Upon the transfer, exchange or replacement of
Notes bearing a

 

46

 

Restricted Notes Legend, the Registrar shall deliver only Notes that
bear such Restricted Notes Legend unless (i) Initial Notes are being exchanged
for Exchange Notes in a Exchange Offer in which case the Exchange Notes shall
not bear a Restricted Notes Legend, (ii) an Initial Note is being transferred
pursuant to an effective registration statement or (iii) there is delivered to
the Registrar an Opinion of Counsel reasonably satisfactory to the Issuers and
the Trustee to the effect that neither such legend nor the related restrictions
on transfer are required in order to maintain compliance with the provisions of
the Securities Act.  Any Additional Notes
sold in a registered offering shall not be required to bear the Restricted
Notes Legend.

 

(d)           The
Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.1 or this Section 2.6
in accordance with its records retention policy.  The Issuers shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the
Registrar.

 

(e)           Obligations
with Respect to Transfers and Exchanges of Notes.

 

(i)            To permit registrations of transfers
and exchanges, the Issuers shall, subject to the other terms and conditions of
this Article II, execute and the Trustee shall authenticate Definitive
Notes and Global Notes at the Registrar’s request.

 

(ii)           No service charge shall be made to a
Holder for any registration of transfer or exchange, but the Issuers may
require payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charges payable upon
exchange or transfer pursuant to Sections 3.8, 3.10 or 9.5).

 

(iii)          The Registrar shall not be required to
register the transfer of or exchange of any Note for a period beginning (1) 15
Business Days before the mailing of a notice of an offer to repurchase Notes
and ending at the close of business on the day of such mailing or (2) 15
Business Days before an interest payment date and ending on such interest
payment date.

 

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

 

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

 

(f)            No
Obligation of the Trustee.  (i)  The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Note, a member of, or a
participant in, the Depositary or other Person with respect to the accuracy of
the records of the Depositary or its nominee or of any participant or member
thereof, with respect to any ownership interest in

 

47

 

the Notes or with respect to
the delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice or the payment of any amount or
delivery of any Notes (or other security or property) under or with respect to
such Notes.  All notices and
communications to be given to the Holders and all payments to be made to
Holders in respect of the Notes shall be given or made only to or upon the
order of the registered Holders (which shall be the Depositary or its nominee
in the case of a Global Note).  The
rights of beneficial owners in any Global Note shall be exercised only through
the Depositary subject to the applicable rules and procedures of the
Depositary.  The Trustee may rely and
shall be fully protected in relying upon information furnished by the
Depositary with respect to its members, participants and any beneficial owners.

 

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

 

Section 2.8             Reserved

 

SECTION
2.9         Form of Certificate to be
Delivered in Connection with Transfers to Institutional Accredited Investors.

 

[Date]

 

Festival
Fun Parks, LLC

Palace Finance, Inc.

4590 MacArthur Boulevard

Suite 400

Newport Beach, CA 92660

Attention:

 

and

 

Wells
Fargo Bank, N.A.

Corporate Trust Services

Sixth and Marquette

Mac N9303-120

Minneapolis, MN 55479

 

Re:                               Festival
Fun Parks, LLC and Palace Finance, Inc.

10 7/8% Senior Notes due 2014 (the “Notes”)

 

48

 

Dear
Sirs:

 

This certificate is delivered to request a transfer of
$                    
principal amount of the Notes of Festival Fun Parks, LLC and Palace Finance,
Inc. (the “Issuers”).

 

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

 

Name: 

 

Address:

 

Taxpayer ID Number:

 

The undersigned represents and warrants to you that:

 

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

 

2.             We
understand that the Notes have not been registered under the Securities Act
and, unless so registered, may not be sold except as permitted in the following
sentence.  We agree on our own behalf and
on behalf of any investor account for which we are purchasing Notes to offer,
sell or otherwise transfer such Notes prior to the date that is two years after
the later of the date of original issue and the last date on which the Issuers
or any affiliate of the Issuers was the owner of such Notes (or any predecessor
thereto) (the “Resale Restriction Termination Date”) only (a) to the Issuers,
(b) pursuant to a registration statement which has been declared effective under
the Securities Act, (c) in a transaction complying with the requirements of
Rule 144A under the Securities Act (“Rule 144A”), to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a “QIB”) that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional “accredited
investor” within the meaning of Rule 501 (a)( 1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of
such an institutional “accredited investor,” in each case in a minimum principal
amount of Notes of $250,000 or (f) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of
the foregoing cases 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 shall not apply subsequent to the Resale Restriction
Termination Date.  If any resale or other
transfer of the Notes is proposed to be made pursuant to clause (e) above prior
to the Resale Restriction

 

49

 

Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Issuers and the
Trustee, which shall provide, among other things, that the transferee is an
institutional “accredited investor” (within the meaning of Rule 501 (a)(1),
(2), (3) or (7) under the Securities Act) and that it is acquiring such Notes
for investment purposes and not for distribution in violation of the Securities
Act.  Each purchaser acknowledges that
the Issuers and the Trustee reserve the right prior to any offer, sale or other
transfer prior to the Resale Termination Date of the Notes pursuant to clauses
(d), (e) or (f) above to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Issuers and the
Trustee.

 

The Trustee and the Issuers are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.

 

	
   

  	
  TRANSFEREE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  
					

 

SECTION
2.10       Form of Certificate to be
Delivered in Connection with Transfers Pursuant to Regulation S.

 

[Date]

 

Festival
Fun Parks, LLC

Palace Finance, Inc.

4590 MacArthur Boulevard, Suite 400

Newport Beach, CA 92660

Attention:

 

and

 

Wells
Fargo Bank, N.A.

Corporate Trust Services

Sixth and Marquette

Mac N9303-120

Minneapolis, MN 55479

 

Re:                               Festival
Fun Parks, LLC and Palace Finance, Inc.

10 7/8% Senior Notes due 2014 (the “Notes”)

 

Ladies
and Gentlemen:

 

In connection with our proposed sale of $                    
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the United
States Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, we represent that:

 

50

 

(a)           the
offer of the Notes was not made to a person in the United States;

 

(b)           either
(i) at the time the buy order was originated, the transferee was outside the
United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States or (ii) the transaction was
executed in, on or through the facilities of a designated off-shore securities
market and neither we nor any person acting on our behalf knows that the
transaction has been pre-arranged with a buyer in the United States;

 

(c)           no
directed selling efforts have been made in the United States in contravention
of the requirements of Rule 903(a)(2) or Rule 904(a)(2) of Regulation S, as
applicable; and

 

(d)           the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act.

 

In addition, if the sale is made during a restricted
period and the provisions of Rule 903(b)(2) or Rule 904(b)(1) of Regulation S
are applicable thereto, we confirm that such sale has been made in accordance
with the applicable provisions of Rule 903(b)(2) or Rule 904(b)(1), as the case
may be.

 

You and the Issuers are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.  Terms used in this certificate have the
meanings set forth in Regulation S.

 

Very truly yours,

 

[Name of Transferor]

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signature

  

 

SECTION
2.11       Mutilated, Destroyed, Lost
or Stolen Notes.  If a mutilated Note
is surrendered to the Registrar or if the Holder of a Note claims that the Note
has been lost, destroyed or wrongfully taken, the Issuers shall issue and the
Trustee, upon Issuers’ Order, shall authenticate a replacement Note.  The Holder shall meet the requirements of
Section 8-405 of the Uniform Commercial Code, such that the Holder (a) notifies
the Issuers and the Trustee within a reasonable time after such Holder has
notice of such loss, destruction or wrongful taking and the Registrar has not
registered a transfer prior to receiving such notification, (b) makes such
request to the Issuers prior to the Issuers having notice that the Note has
been acquired by a protected purchaser as defined in Section 8-303 of the
Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other
reasonable requirements of the Issuers and the Trustee.  Such Holder shall furnish an indemnity bond
sufficient in the judgment of the Issuers and the Trustee to protect the
Issuers, the Trustee, the Paying Agent and the Registrar from any loss which
any of them may suffer if a Note is replaced, then, in the absence of notice to
the Issuers, any Note Guarantor or the Trustee that such Note has been acquired
by a protected purchaser, the

 

51

 

Issuers shall execute and upon Issuers’ Order the Trustee shall
authenticate and deliver, in exchange for any such mutilated Note or in lieu of
any such destroyed, lost or stolen Note, a new Note of like tenor and principal
amount, bearing a number not contemporaneously outstanding.

 

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

 

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

 

Every new Note issued pursuant to this Section 2.10
in lieu of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuers, any Note Guarantor
and any other obligor upon the Notes, whether or not the mutilated, destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Notes duly issued hereunder.

 

The provisions of this Section 2.10 are
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes.

 

SECTION
2.12       Outstanding Notes.  Notes outstanding at any time are all Notes
authenticated by the Trustee except for those canceled by it, those paid
pursuant to Section 2.10, those delivered to it for cancellation and those
described in this Section 2.11 as not outstanding.  A Note does not cease to be outstanding in
the event the Issuers or an Affiliate of the Issuers holds the Note except that
the Issuers or an Affiliate of the Issuers shall not obtain voting rights with
respect to such Note.

 

If a Note is replaced pursuant to Section 2.10,
it ceases to be outstanding unless the Trustee and the Issuers receive proof
satisfactory to them that the replaced Note is held by a bona fide purchaser.

 

If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Notes maturing
and the Paying Agent is not prohibited from paying such money to the Holders on
that date pursuant to the terms of this Indenture, then on and after that date
such Notes cease to be outstanding and interest on them ceases to accrue.

 

SECTION
2.13       Temporary Notes.  In the event that Definitive Notes are to be
issued under the terms of this Indenture, until such Definitive Notes are ready
for delivery, the Issuers may prepare and the Trustee shall authenticate
temporary Notes.  Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Issuers consider appropriate for temporary Notes.  Without unreasonable delay, the Issuers shall
prepare and the Trustee shall authenticate Definitive Notes.  After the preparation of Definitive Notes,
the temporary Notes shall be exchangeable for Definitive Notes upon surrender
of the temporary

 

52

 

Notes at any office or agency maintained by the Issuers for that
purpose and such exchange shall be without charge to the Holder.  Upon surrender for cancellation of any one or
more temporary Notes, the Issuers shall execute, and the Trustee shall
authenticate and make available for delivery in exchange therefor, one or more
Definitive Notes representing an equal principal amount of Notes.  Until so exchanged, the Holder of temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as a Holder of Definitive Notes.

 

SECTION
2.14       Cancellation.  The Issuers at any time may deliver Notes to
the Trustee for cancellation.  The
Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment or
cancellation and shall destroy cancelled Notes (subject to the record retention
requirement of the Exchange Act).  The
Issuers may not issue new Notes to replace Notes it has paid or delivered to
the Trustee for cancellation.

 

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

 

SECTION
2.15       Payment of Interest;
Defaulted Interest.  Interest on any
Note which is payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid to the Person in whose name such Note (or
one or more predecessor Notes) is registered at the close of business on the
regular record date for such interest at the office or agency of the Issuers
maintained for such purpose pursuant to Section 2.3.

 

Any interest on any Note which is payable, but is not
paid when the same becomes due and payable and such nonpayment continues for a
period of 30 days shall forthwith cease to be payable to the Holder on the
regular record date by virtue of having been such Holder, and such defaulted
interest and (to the extent lawful) interest on such defaulted interest at the
rate borne by the Notes (such defaulted interest and interest thereon herein
collectively called “Defaulted Interest”) shall be paid by the Issuers,
at their election in each case, as provided in clause (a) or (b) below:

 

(a)           The Issuers may elect to make payment
of any Defaulted Interest to the Persons in whose names the Notes (or their
respective predecessor Notes) are registered at the close of business on a
Special Record Date (as defined below) for the payment of such Defaulted
Interest, which shall be fixed in the following manner.  The Issuers shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each Note
and the date (not less than 30 days after such notice) of the proposed payment
(the “Special Interest Payment Date”), and at the same time the Issuers
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in

 

53

 

respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided.  Thereupon, the Trustee shall
fix a record date (the “Special Record Date”) for the payment of such
Defaulted Interest, which shall be not more than 15 days and not less than 10
days prior to the Special Interest Payment Date and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Issuers
of such Special Record Date, and in the name and at the expense of the Issuers,
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date and Special Interest Payment Date therefor to be given in
the manner provided for in Section 11.2, not less than 10 days prior to
such Special Record Date.  Notice of the
proposed payment of such Defaulted Interest and the Special Record Date and
Special Interest Payment Date therefor having been so given, such Defaulted
Interest shall be paid on the Special Interest Payment Date to the Persons in
whose names the Notes (or their respective predecessor Notes) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (b).

 

(b)           The Issuers may make payment of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, if, after notice given by
the Issuers to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.

 

Subject to the foregoing provisions of this Section
2.14, each Note delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Note shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by
such other Note.

 

SECTION
2.16       Computation of Interest.  Interest on the Notes shall be computed on
the basis of a 360-day year of twelve 30-day months.

 

SECTION
2.17       CUSIP Numbers.  The Issuers in issuing the Notes may use
“CUSIP” numbers (if then generally in use). 
The Trustee shall not be responsible for the use of CUSIP numbers, and
the Trustee makes no representation as to their correctness as printed on any
Note or notice to Holders and that reliance may be placed only on the other
identification numbers printed on the Notes, and any redemption shall not be
affected by any defect in or omission of such CUSIP numbers.  The Issuers shall promptly notify the Trustee
in writing of any change in the CUSIP numbers.

 

ARTICLE III

 

Covenants

 

SECTION
3.1         Payment of Notes.  Section 3.2 
The Issuers shall promptly pay the principal of and interest on the Notes
on the dates and in the manner provided in the Notes

 

54

 

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 Holders on that date pursuant to the terms of this Indenture.

 

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

 

(a)           The
Issuers and the Note Guarantors will pay any present or future stamp.  court or documentary taxes or any other
excise or property taxes, charges or similar levies that arise in any
jurisdiction from the execution, delivery, enforcement or registration of the
Securities, the Note Guarantees, this Indenture or any other document or
instrument in relation thereof, or the receipt of any payments with respect to
the Securities or the Note Guarantees, excluding such taxes, charges or similar
levies imposed by any jurisdiction outside of the United States, the jurisdiction
of incorporation of any successor of the Issuers or any Note Guarantor or any
jurisdiction in which a paying agent is located (other than those resulting
from, or required to be paid in connection with, the enforcement of the
Securities, the Note Guarantees or any other such document or instrument
following the occurrence of any Event of Default with respect to the
Securities).  The Issuers or the Note
Guarantors will agree to indemnify the Holders for any such taxes paid by such
Holders.

 

(b)           Notwithstanding
anything to the contrary contained in this Indenture, the Issuers may, to the
extent it is required to do so by law, deduct or withhold income or other
similar taxes imposed by the United States of America from principal or
interest payments hereunder.

 

SECTION
3.3         SEC Reports.  Following the effectiveness of the exchange
offer or shelf registration statement required by the Registration Rights
Agreement, the Company will file with the SEC, and make available to the
Trustee and the Holders, the annual reports and the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) that are specified in Sections 13 and
15(d) of the Exchange Act with respect to the Parent, the Company and the
Subsidiary Guarantors within the time periods specified therein.  Prior to the effectiveness of the exchange
offer or shelf registration statement required by the Registration Rights
Agreement or in the event that the Company is not permitted to file such
reports, documents and information with the SEC pursuant to the Exchange Act,
the Company will nevertheless make available such Exchange Act information to
the Trustee and the Holders as if the Company were subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act within the time periods
specified therein or in the relevant forms.

 

If the Company has designated any of its Subsidiaries
as Unrestricted Subsidiaries then the quarterly and annual financial information
required by the preceding paragraph shall include a reasonably detailed
presentation, either on the face of the financial statements or in the
footnotes to the financial statements and in Management’s Discussion and
Analysis of Results of

 

55

 

Operations and Financial Condition, of the financial condition and
results of operations of Parent, the Company and its Restricted Subsidiaries.

 

In addition, Parent, the Company and the Subsidiary
Guarantors shall make available to the Holders and to prospective investors,
upon the request of such Holders, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes are
not freely transferable under the Securities Act.  For purposes of this covenant, Parent, the
Company and the Subsidiary Guarantors will be deemed to have furnished the
reports to the Trustee and the Holders of Notes as required by this covenant if
it has filed such reports with the SEC via the EDGAR filing system and such
reports are publicly available.

 

The filing requirements set forth above for the
applicable period may be satisfied by the Company prior to the commencement of
the Exchange Offer or the effectiveness of the Shelf Registration Statement
(each as defined in the Registration Rights Agreement) by the filing with the
SEC of the Exchange Offer Registration Statement and/or Shelf Registration
Statement, and any amendments thereto, with such financial information that
satisfies Regulation S-X of the Securities Act; provided that this paragraph
shall not supersede or in any manner suspend or delay the Company’s reporting
obligations set forth in the first three paragraphs of this Section 3.2.

 

SECTION
3.4         Limitation on Indebtedness.  Section 3.5 
The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness); provided,
however, that the Company and the Subsidiary Guarantors may Incur
Indebtedness if on the date thereof:

 

(1)           the Consolidated Coverage Ratio for
the Company and its Restricted Subsidiaries is at least 2.00 to 1.00; and

 

(2)           no Default or Event of Default will
have occurred or be continuing or will occur as a consequence of Incurring the
Indebtedness or transactions relating to such Incurrence.

 

(b)           The
foregoing paragraph (a) will not prohibit the Incurrence of the following
Indebtedness:

 

(1)           Indebtedness of the Company and the
Subsidiary Guarantors Incurred pursuant to a Credit Facility in an aggregate amount
up to $44.0 million less all principal repayments with the proceeds from Asset
Dispositions utilized in accordance with Section 3.8(a)(3)(x);

 

(2)           Guarantees by the Company or
Subsidiary Guarantors of Indebtedness Incurred by the Company or a Subsidiary
Guarantor in accordance with the provisions of this Indenture; provided that in the event such
Indebtedness that is being Guaranteed is a Subordinated Obligation or a
Guarantor Subordinated Obligation, then the related Guarantee shall be
subordinated in right of payment to the Notes or the Subsidiary Guarantee, as
the case may be;

 

56

 

(3)                                  Indebtedness
of the Company owing to and held by any Subsidiary Guarantor or Indebtedness of
a Restricted Subsidiary owing to and held by the Company or any Subsidiary
Guarantor; provided, however,

 

(a)                                  if
the Company is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all obligations with
respect to the Notes;

 

(b)                                 if
a Subsidiary Guarantor is the obligor on such Indebtedness and the Company or a
Subsidiary Guarantor is not the obligee, such Indebtedness is subordinated in
right of payment to the Subsidiary Guarantees of such Subsidiary Guarantor; and

 

(c)                                  (i)                                     any
subsequent issuance or transfer of Capital Stock or any other event which
results in any such Indebtedness being beneficially held by a Person other than
the Company or a Subsidiary Guarantor of the Company; and

 

(ii)                                  any
sale or other transfer of any such Indebtedness to a Person other than the
Company or a Subsidiary Guarantor of the Company

 

shall
be deemed, in each case, to constitute an Incurrence of such Indebtedness by
the Company or such Subsidiary Guarantor, as the case may be;

 

(4)                                  Indebtedness
represented by (a) the Notes on the Issue Date, the Subsidiary Guarantees and
the related Exchange Notes and Subsidiary Guarantees issued in a registered
Exchange Offer pursuant to the Registration Rights Agreement, (b) any
Indebtedness (other than the Indebtedness described in clauses (1), (2), (3),
(6), (8), (9) and (10)) outstanding on the Issue Date and (c) any Refinancing Indebtedness
Incurred in respect of any Indebtedness described in this clause (4) or clause
(5) or Incurred pursuant to Section 3.3(a);

 

(5)                                  Indebtedness
of a Subsidiary Guarantor Incurred and outstanding on the date on which such
Subsidiary Guarantor was acquired by, or merged into, the Company or any
Subsidiary Guarantor (other than Indebtedness Incurred (a) to provide all or
any portion of the funds utilized to consummate the transaction or series of
related transactions pursuant to which such Subsidiary Guarantor became a
Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise
in connection with, or in contemplation of, such acquisition); provided,
however, that at the time such Subsidiary Guarantor is acquired by
the Company, (x) the Company would have been able to Incur $1.00 of additional
Indebtedness pursuant to Section 3.3(a) or (y) the Consolidated Coverage
Ratio for the Company and its Restricted Subsidiaries would have increased and
would have been at least 1.80 to 1.00, in each case of clause (x) and (y) after
giving effect to the Incurrence of such Indebtedness pursuant to this clause
(5);

 

(6)                                  Indebtedness
under Hedging Obligations that are Incurred in the ordinary course of business
(and not for speculative purposes) (a) for the purpose of fixing or hedging
interest rate risk with respect to any Indebtedness Incurred without violation
of this Indenture; (b) for the purpose of fixing or hedging currency exchange
rate risk with

 

57

 

respect to any currency
exchanges; or (c) for the purpose of fixing or hedging commodity price risk
with respect to any commodities;

 

(7)                                  the
Incurrence by the Company or any of its Subsidiary Guarantors of Indebtedness
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations with respect to assets other than Capital Stock or other
Investments, in each case Incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvements of property used
in the business of the Company or such Subsidiary Guarantor, and Attributable
Indebtedness, in an aggregate principal amount, including all Refinancing
Indebtedness Incurred to refund, defease, renew, extend, refinance or replace
any Indebtedness Incurred pursuant to this clause (7), not to exceed at any
time outstanding the greater of (A) $7.5 million and (B) 4.5% of Consolidated
Total Assets;

 

(8)                                  Indebtedness
Incurred in respect of workers’ compensation claims, self-insurance
obligations, performance, surety, appeal and similar bonds and completion
guarantees provided by the Company or a Restricted Subsidiary in the ordinary
course of business;

 

(9)                                  Indebtedness
arising from agreements of the Company or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred or assumed in connection with the acquisition or disposition of
any business, assets or Capital Stock of a Restricted Subsidiary or to pay related
fees and expenses, provided that
with respect to a disposition, the maximum aggregate liability in respect of
all such Indebtedness shall at no time exceed the gross proceeds actually
received by the Company and its Restricted Subsidiaries in connection with such
disposition;

 

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

 

(11)                            the
Incurrence by any Foreign Subsidiary of the Company of Indebtedness not to
exceed $5.0 million at any time outstanding; and

 

(12)                            in
addition to the items referred to in clauses (1) through (11) above,
Indebtedness of the Company and its Subsidiary Guarantors in an aggregate
outstanding principal amount which, when taken together with the principal
amount of all other Indebtedness Incurred pursuant to this clause (12) and then
outstanding, will not exceed $10.0 million at any time outstanding.

 

(c)                                  The
Company will not Incur any Indebtedness under Section 3.3(b) if the
proceeds thereof are used, directly or indirectly, to refinance any Subordinated
Obligations of the Company unless such Indebtedness will be subordinated to the
Notes to at least the same extent as such Subordinated Obligations. No
Subsidiary Guarantor will Incur any Indebtedness under Section 3.3(b) if
the proceeds thereof are used, directly or indirectly, to refinance any
Guarantor

 

58

 

Subordinated
Obligations of such Subsidiary Guarantor unless such Indebtedness will be
subordinated to the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee to at least the same extent as such Guarantor Subordinated
Obligations. No Restricted Subsidiary (other than a Subsidiary Guarantor) may
Incur any Indebtedness under Section 3.3(b) if the proceeds are used to
refinance Indebtedness of the Company.

 

(d)                                 For
purposes of determining compliance with, and the outstanding principal amount
of any particular Indebtedness Incurred pursuant to and in compliance with,
this Section 3.3:

 

(1)                                  in
the event that Indebtedness meets the criteria of more than one of the types of
Indebtedness described in paragraphs (a) and (b) of this Section 3.3,
the Company, in its sole discretion, will classify all or any portions of such
item of Indebtedness on the date of Incurrence and, with the exception of
clause (1) of paragraph (b), may later classify all or any portion of such item
of Indebtedness in any manner that complies with this Section 3.3 at the
time of such reclassifications and only be required to include the amount and
type of such Indebtedness in one of paragraph (a) or one of the clauses of
paragraph (b) of this Section 3.3;

 

(2)                                  all
Indebtedness outstanding on the date of this Indenture under the Senior Secured
Credit Agreement shall be deemed Incurred under clause (1) of paragraph (b) of
this Section 3.3 and not paragraph (a) or clause (4) of paragraph (b) of
this Section 3.3;

 

(3)                                  Guarantees
of, or obligations in respect of letters of credit relating to, Indebtedness
which is otherwise included in the determination of a particular amount of
Indebtedness shall not be included;

 

(4)                                  if
obligations in respect of letters of credit are Incurred pursuant to a Credit
Facility and are being treated as Incurred pursuant to clause (1) of paragraph
(b) of this Section 3.3 and the letters of credit relate to other
Indebtedness, then such other Indebtedness shall not be included;

 

(5)                                  the
principal amount of any Disqualified Stock or Preferred Stock of a Person, will
be equal to the greater of the maximum mandatory redemption or repurchase price
(not including, in either case, any redemption or repurchase premium) or the
liquidation preference thereof;

 

(6)                                  Indebtedness
permitted by this Section 3.3 need not be permitted solely by reference
to one provision permitting such Indebtedness but may be permitted in part by
one such provision and in part by one or more other provisions of this Section
3.3 permitting such Indebtedness; and

 

(7)                                  the
amount of Indebtedness issued at a price that is less than the principal amount
thereof will be equal to the amount of the liability in respect thereof
determined in accordance with GAAP.

 

(e)                                  Accrual
of interest, accrual of dividends, the accretion of accreted value, the payment
of interest in the form of additional Indebtedness, and the payment of
dividends in

 

59

 

the form of
additional shares of Disqualified Stock or Preferred Stock will not be deemed
to be an Incurrence of Indebtedness for purposes of this Section 3.3. The
amount of any Indebtedness outstanding as of any date shall be (i) the accreted
value thereof in the case of any Indebtedness issued with original issue
discount and (ii) the principal amount or liquidation preference thereof,
together with any interest thereon that is more than 30 days past due, in the
case of any other Indebtedness.

 

(f)                                    In
addition, the Company will not permit any of its Unrestricted Subsidiaries to
Incur any Indebtedness or issue any shares of Disqualified Stock, other than
Non-Recourse Indebtedness. If at any time an Unrestricted Subsidiary becomes a
Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to
be Incurred by a Restricted Subsidiary as of such date (and, if such
Indebtedness is not permitted to be Incurred as of such date under this Section
3.3, the Company shall be in Default of this Section 3.3).

 

(g)                                 For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount
of Indebtedness denominated in a foreign currency shall be calculated based on
the relevant currency exchange rate in effect on the date such Indebtedness was
Incurred, in the case of term Indebtedness, or first committed, in the case of
revolving credit Indebtedness; provided that if such Indebtedness is Incurred
to refinance other Indebtedness denominated in a foreign currency, and such
refinancing would cause the applicable U.S. dollar-denominated restriction to
be exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such U.S. dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed the principal amount of such
Indebtedness being refinanced. Notwithstanding any other provision of this Section
3.3, the maximum amount of Indebtedness that the Company may Incur pursuant
to this Section 3.3 shall not be deemed to be exceeded solely as a
result of fluctuations in the exchange rate of currencies. The principal amount
of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a
different currency from the Indebtedness being refinanced, shall be calculated
based on the currency exchange rate applicable to the currencies in which such
Refinancing Indebtedness is denominated that is in effect on the date of such
refinancing.

 

SECTION 3.6                          Limitation
on Restricted Payments. Section 3.7 
The Company will not, and will not permit any of its Restricted
Subsidiaries, directly or indirectly, to:

 

(1)                                  declare
or pay any dividend or make any distribution (whether made in cash, securities
or other property) on or in respect of its Capital Stock (including any payment
in connection with any merger or consolidation involving the Company or any of
its Restricted Subsidiaries) except:

 

(a)                                  dividends
or distributions payable in Capital Stock of the Company (other than
Disqualified Stock) or in options, warrants or other rights to purchase such
Capital Stock of the Company; and

 

(b)                                 dividends
or distributions payable to the Company or a Restricted Subsidiary (and if such
Restricted Subsidiary is not a Wholly-Owned Subsidiary,

 

60

 

to its other holders of
Capital Stock, other than Disqualified Stock, on a pro rata basis);

 

(2)                                  purchase,
redeem, retire or otherwise acquire for value any Capital Stock of the Company
or any direct or indirect parent of the Company held by Persons other than the
Company or a Restricted Subsidiary (other than in exchange for Capital Stock of
the Company (other than Disqualified Stock));

 

(3)                                  purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations or Guarantor Subordinated Obligations (other than (x)
Indebtedness of the Company owing to and held by any Subsidiary Guarantor or
Indebtedness of a Subsidiary Guarantor owing to and held by the Company or any
other Subsidiary Guarantor permitted under clause (3) of paragraph (b) of Section
3.3 or (y) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Subordinated Obligations or Guarantor 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 purchase, repurchase, redemption, defeasance or other acquisition
or retirement); or

 

(4)                                  make
any Restricted Investment in any Person;

 

(any
such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Restricted Investment referred to in clauses
(1) through (4) shall be referred to herein as a “Restricted Payment”),
if at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:

 

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

 

(b)                                 the
Company is not able to Incur an additional $1.00 of Indebtedness pursuant to Section
3.3(a) after giving effect, on a pro forma basis, to such Restricted
Payment; or

 

(c)                                  the
aggregate amount of such Restricted Payment and all other Restricted Payments
declared or made subsequent to the Is sue Date (excluding clauses (1), (2),
(3), (4), (7), (8), (9), and (11) of Section 3.4(b)) would exceed the
sum of:

 

(i)                                     50%
of Consolidated Net Income for the period (treated as one accounting period)
from the first day of the fiscal quarter immediately following the Issue Date
to the end of the most recent fiscal quarter ending prior to the date of such
Restricted Payment for which financial statements are internally available (or,
in case such Consolidated Net Income is a deficit, minus 100% of such deficit);

 

(ii)                                  100%
of the aggregate Net Cash Proceeds and the fair market value of property other
than cash received by the Company from the issue or sale of its Capital Stock
(other than Disqualified Stock) or

 

61

 

other capital contributions subsequent to the Issue
Date (other than Net Cash Proceeds or property received from an issuance or
sale of such Capital Stock to a Subsidiary of the Company or an employee stock
ownership plan, option plan or similar trust to the extent such sale to an
employee stock ownership plan or similar trust is financed by loans from or
Guaranteed by the Company or any Restricted Subsidiary unless such loans have
been repaid with cash on or prior to the date of determination);

 

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

 

(iv)                              the
amount equal to the net reduction in Restricted Investments made by the Company
or any of its Restricted Subsidiaries in any Person resulting from:

 

(A)                              repurchases
or redemptions of such Restricted Investments by such Person, proceeds realized
upon the sale of such Restricted Investment to an unaffiliated purchaser, repayments
of loans or advances or other transfers of assets (including by way of dividend
or distribution) by such Person to the Company or any Restricted Subsidiary
(other than for reimbursement of tax payments); or

 

(B)                                the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of “Investment”) not to exceed, in
the case of any Unrestricted Subsidiary, the then fair market value of the
Investments of the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary,

 

which Restricted
Investment in each case under this clause (iv) was included in the calculation
of the amount of Restricted Payments; provided, however, that the amounts realized under
subclauses (A) and (B) of this clause (iv) shall not be limited to the amount
of the Restricted Investment and amounts included under this clause (iv) will
be excluded from Consolidated Net Income for purposes of Section
3.4(a)(4)(c)(i).

 

(b)                                 The
provisions of Section 3.4(a) shall not prohibit:

 

(1)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Capital Stock, Disqualified Stock or Subordinated Obligations of the Company
or Guarantor Subordinated Obligations of any Subsidiary Guarantor or other
Restricted Payment made by exchange for, or out of the proceeds of the
substantially

 

62

 

concurrent sale of,
Capital Stock of the Company (other than Disqualified Stock and other than
Capital Stock issued or sold to a Subsidiary or an employee stock ownership
plan or similar trust to the extent such sale to an employee stock ownership
plan or similar trust is financed by loans from or Guaranteed by the Company or
any Restricted Subsidiary unless such loans have been repaid with cash on or
prior to the date of determination); provided, however, that the Net Cash Proceeds from
such sale of Capital Stock will be excluded from Section 3.4(a) (4)(c) (ii);

 

(2)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Subordinated Obligations of the Company or Guarantor Subordinated
Obligations of any Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated Obligations of
the Company or any purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Guarantor Subordinated Obligations made by
exchange for or out of the proceeds of the substantially concurrent sale of
Guarantor Subordinated Obligations that, in each case, is permitted to be
Incurred pursuant to Section 3.3 and that in each case constitutes
Refinancing Indebtedness;

 

(3)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Disqualified Stock of the Company or a Restricted Subsidiary made by
exchange for or out of the proceeds of the substantially concurrent sale of
Disqualified Stock of the Company or such Restricted Subsidiary, as the case
may be, that, in each case, is permitted to be Incurred pursuant to Section
3.3 and that in each case constitutes Refinancing Indebtedness;

 

(4)                                  so
long as no Default or Event of Default has occurred and is continuing, any
purchase or redemption of Subordinated Obligations or Guarantor Subordinated
Obligations of a Subsidiary Guarantor from Net Available Cash to the extent
permitted under Section 3.8;

 

(5)                                  dividends
paid within 60 days after the date of declaration if at such date of
declaration such dividend would have complied with this Section 3.4  provided,
however, that the payment of such dividends shall not be counted as
Restricted Payments if the declaration of the dividends was already so counted
as Restricted Payments;

 

(6)                                  so
long as no Default or Event of Default has occurred and is continuing,

 

(a)                                  the
purchase, redemption or other acquisition, cancellation or retirement for value
of Capital Stock, or options, warrants, equity appreciation rights or other
rights to purchase or acquire Capital Stock of the Company or any Restricted
Subsidiary or any direct or indirect parent of the Company held by any
existing, future or former employees, consultants, directors or management of
the Company or Parent or any Subsidiary or direct or indirect Parent of the
Company or their assigns, estates or heirs, in each case in connection with the
repurchase provisions under employee stock option or stock purchase agreements
or other agreements to compensate management employees; provided that such
transactions pursuant to this clause shall not be permitted with respect to the

 

63

 

compensation or issuance
of securities for any services that were not related to, or for the benefit of,
the Company and its Restricted Subsidiaries; provided, further, that such
transactions pursuant to this clause will not exceed $1.0 million in the
aggregate during any calendar year (with any unused amount being available to
be utilized in succeeding calendar years), plus the amount of any capital
contributions to the Company as a result of sales of such shares of Capital
Stock of the Company or any direct or indirect parent of the Company to such
persons (provided that the Net Cash Proceeds from such sale of Capital Stock
will be excluded from Section 3.4(a)(4)(c)(ii)) plus the amount of any “key
man” insurance proceeds received by the Company or any Subsidiary Guarantor;
and

 

(b)                                 loans
or advances to employees, directors or consultants of the Company or Parent or
any Subsidiary of the Company the proceeds of which are used to purchase
Capital Stock of the Company or Parent, in an aggregate amount not in excess of
$1.0 million at any one time outstanding; provided, however, that if used to purchase the
Capital Stock of Parent, the proceeds of such purchase shall be contributed to
the Company;

 

(7)                                  repurchases
of Capital Stock deemed to occur upon the exercise of stock options, warrants
or other convertible securities if such Capital Stock represents a portion of
the exercise price thereof;

 

(8)                                  cash
dividends or loans to Parent or an Intermediate Parent in amounts equal to:

 

(a)                                  the
amounts required for Parent or such Intermediate Parent to pay any Federal,
state or local income taxes to the extent that such income taxes are directly
attributable to the income of the Company and its Restricted Subsidiaries and,
to the extent of amounts actually received from Unrestricted Subsidiaries, in
amounts required to pay such taxes to the extent attributable to the income of
the Unrestricted Subsidiaries;

 

(b)                                 the
amounts required for Parent or Intermediate Parent to pay franchise taxes and
other fees required to maintain its legal existence;

 

(c)                                  an
amount not to exceed the greater of (i) $1.0 million and (ii) if a registered
public Equity Offering has occurred and the Intermediate Parent or Parent which
undertook the registered public Equity Offering continues to be a reporting
company under the Exchange Act, $2.0 million, in any fiscal year to permit
Parent (or such Intermediate Parent) to pay its corporate overhead expenses
Incurred in the ordinary course of business, and to pay salaries or other
compensation of employees who perform services for both Parent (or such
Intermediate Parent) and the Company;

 

(9)                                  any
payments made in connection with the Transactions pursuant to the Acquisition
Agreement and any other agreements or documents related to the Transactions and
as described in the Offering Memorandum;

 

64

 

(10)                            so
long as no Default or Event of Default has occurred and is continuing, any
payments made pursuant to the Management Agreement (without giving effect to
subsequent amendments, waivers or other modifications to the Management
Agreement);

 

(11)                            the
purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of any Subordinated Obligation (i) at a purchase price not greater
than 101% of the principal amount of such Subordinated Obligation in the event
of a Change of Control in accordance with provisions similar to Section 3.10
or (ii) at a purchase price not greater than 100% of the principal amount
thereof in accordance with provisions similar to Section 3.8; provided that, prior to or simultaneously
with such purchase, repurchase, redemption, defeasance or other acquisition or
retirement, the Company has made the Change of Control Offer or Asset
Disposition Offer, as applicable, as provided in Section 3.10 or Section
3.8, respectively with respect to the Notes and has completed the
repurchase or redemption of all Notes validly tendered for payment in
connection with such Change of Control Offer or Asset Disposition Offer;

 

(12)                            so
long as no Default or Event of Default has occurred and is continuing, the
payment of dividends on Disqualified Stock of the Company or Preferred Stock of
a Restricted Subsidiary, the Incurrence of which was permitted by this
Indenture to the extent such dividends are included in the definition of “Consolidated
Interest Expense;”

 

(13)                            Investments
in Joint Ventures and Unrestricted Subsidiaries in an amount not to exceed the
greater of $5.0 million or 3.0% of Consolidated Total Assets outstanding at any
one time; and

 

(14)                            Restricted
Payments in an amount not to exceed $5.0 million.

 

The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date of such Restricted Payment of
the asset(s) or securities proposed to be paid, transferred or issued by the
Company or such Restricted Subsidiary, as the case may be, pursuant to such
Restricted Payment. The fair market value of any cash Restricted Payment shall
be its face amount and any non-cash Restricted Payment shall be determined
conclusively by the Board of Directors of the Company acting in good faith
whose resolution with respect thereto shall be delivered to the Trustee, such
determination to be based upon an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of national standing if such fair market
value is estimated in good faith by the Board of Directors of the Company to
exceed $5.0 million. Not later than the date of making any Restricted Payment,
the Company shall deliver to the Trustee an Officers’ Certificate stating that
such Restricted Payment is permitted and setting forth the basis upon which the
calculations required by Section 3.4 were computed, together with a copy
of any fairness opinion or appraisal required by this Indenture.

 

SECTION 3.8                          Limitation
on Liens. The Company will not, and the Company will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to
exist any Lien (other than Permitted Liens) upon any of its property or assets
(including Capital Stock of Subsidiaries), whether owned on the date of this
Indenture or acquired after that date, which Lien is securing any Indebtedness,
unless contemporaneously with the Incurrence of such Liens effective provision
is made to secure the Indebtedness due under this Indenture and

 

65

 

the Notes or, in respect of Liens on any Restricted
Subsidiary’s property or assets, any Note Guarantee of such Restricted
Subsidiary, as the case may be, equally and ratably with (or senior in priority
to in the case of Liens with respect to Subordinated Obligations or Guarantor
Subordinated Obligations, as the case may be), the Indebtedness secured by such
Lien for so long as such Indebtedness is so secured.

 

SECTION 3.9                          Limitation
on Sale/Leaseback Transactions. The Company will not, and will not permit
any of its Restricted Subsidiaries to, enter into any Sale/Leaseback
Transaction unless:

 

(1)                                  the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Sale/Leaseback Transaction at least equal to
the fair market value (as evidenced by a resolution of the Board of Directors
of the Company) of the property subject to such transaction;

 

(2)                                  the
Company or such Restricted Subsidiary would be permitted to create a Lien on
the property subject to such Sale/Leaseback Transaction without securing the
Notes under Section 3.5; and

 

(3)                                  the
Sale/Leaseback Transaction is treated as an Asset Disposition and all of the
conditions of this Indenture described in Section 3.8 (including the
provisions concerning the application of Net Available Cash) are satisfied with
respect to such Sale/Leaseback Transaction, treating all of the consideration received
in such Sale/Leaseback Transaction as Net Available Cash for purposes of Section
3.8.

 

The entry into any Sale/Leaseback Transaction by the
Company and any of its Restricted Subsidiaries which involves a Real Estate
Operating Lease shall not be subject to this Section 3.6.

 

SECTION 3.10                    Limitation
on Restrictions on Distributions from Restricted Subsidiaries. Section 3.11  The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to:

 

(1)                                  pay
dividends or make any other distributions on its Capital Stock to the Company
or any Restricted Subsidiary or pay any Indebtedness or other obligations owed
to the Company or any Restricted Subsidiary (it being understood that the
priority of any Preferred Stock in receiving dividends or liquidating
distributions prior to dividends or liquidating distributions being paid on
Common Stock shall not be deemed a restriction on the ability to make
distributions on Capital Stock);

 

(2)                                  make
any loans or advances to the Company or any Restricted Subsidiary (it being
understood that the subordination of loans or advances made to the Company or
any Restricted Subsidiary to other Indebtedness Incurred by the Company or any
Restricted Subsidiary shall not be deemed a restriction on the ability to make
loans or advances); or

 

66

 

(3)                                  transfer
any of its property or assets to the Company or any Restricted Subsidiary (it
being understood that such transfers shall not include any type of transfer
described in clause (1) or (2) of this Section 3.7(a)).

 

(b)                                 The
provisions of paragraph (a) of this Section 3.7 will not prohibit:

 

(i)                                     any
encumbrance or restriction pursuant to an agreement in effect at or entered
into on the date of this Indenture, including this Indenture, the Notes, the
Exchange Notes, the Subsidiary Guarantees, and the Senior Secured Credit Agreement
(and related documentation) in effect on such date, any agreement satisfying
any other clause of this paragraph and any other agreement identified in Annex
3.7(b)(i) to this Indenture;

 

(ii)                                  any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Capital Stock or Indebtedness Incurred by a
Restricted Subsidiary on or before the date on which such Restricted Subsidiary
was acquired by the Company or a Restricted Subsidiary (other than Capital Stock
or Indebtedness Incurred as consideration in, or to provide all or any portion
of the funds utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company or in contemplation of the
transaction) and outstanding on such date; provided
that any such encumbrance or restriction shall not extend to any assets or
property of the Company or any other Restricted Subsidiary other than the
assets and property so acquired;

 

(iii)                               any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement effecting a refunding, replacement or refinancing of Indebtedness
Incurred pursuant to an agreement referred to in clause (i) or (ii) of this
paragraph or this clause (iii) or contained in any amendment, restatement,
modification, renewal, supplement, refunding, replacement or refinancing of an
agreement referred to in clause (i) or (ii) of this paragraph or this clause
(iii); provided, however, that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in any such
agreement are no less favorable in any material respect, taken as a whole, to
the Holders than the encumbrances and restrictions contained in such agreements
referred to in clauses (i) or (ii) of this paragraph on the Issue Date or the
date such Restricted Subsidiary became a Restricted Subsidiary or was merged
into a Restricted Subsidiary, whichever is applicable;

 

(iv)                              in
the case of clause (3) of paragraph (a) of this Section 3.7, any
encumbrance or restriction (a) that restricts the subletting, assignment or
transfer of any property or asset that is subject to a lease, license or
similar contract, or the assignment or transfer of any such lease, license or
other contract; (b) contained in mortgages, pledges or other security
agreements permitted under this Indenture securing Indebtedness of the Company
or a Restricted Subsidiary to the extent such encumbrances or restrictions
restrict the transfer of the property subject to such mortgages, pledges or
other security agreements; (c) pursuant to customary provisions restricting
dispositions of real property interests set forth in any reciprocal easement
agreements of the Company or any

 

67

 

Restricted Subsidiary; or (d) consisting of customary
provisions limiting the disposition or distribution of assets or property in
joint venture agreements, which limitation is applicable only to the assets
that are the subject of such agreements.

 

(v)                                 (a)
purchase money obligations for property acquired in the ordinary course of
business and (b) Capitalized Lease Obligations permitted under this Indenture,
in each case, that impose encumbrances or restrictions of the nature described
in clause (3) of paragraph (a) of this Section 3.7 on the property so
acquired;

 

(vi)                              any
restriction with respect to a Restricted Subsidiary (or any of its property or
assets) imposed pursuant to an agreement entered into for the direct or
indirect sale or disposition of the Capital Stock or assets of such Restricted
Subsidiary (or the property or assets that are subject to such restriction)
pending the closing of such sale or disposition;

 

(vii)                           net
worth provisions in leases and other agreements entered into by the Company or
any Restricted Subsidiary in the ordinary course of business;

 

(viii)                        encumbrances
or restrictions arising or existing by reason of applicable law or any
applicable rule, regulation or order;

 

(ix)                                encumbrances
or restrictions contained in indentures or debt instruments or other debt
arrangements Incurred by Subsidiary Guarantors in accordance with Section 3.3
that are not more restrictive, taken as a whole, than those applicable to the
Company in either this Indenture or the Senior Secured Credit Agreement on the
Issue Date (which results in encumbrances or restrictions comparable to those
applicable to the Company at a Restricted Subsidiary level);

 

(x)                                   encumbrances
or restrictions contained in indentures or other debt instruments or debt
arrangements Incurred by Subsidiary Guarantors pursuant to clause (5) of
paragraph (b) of Section 3.3, provided that after giving effect to such
Incurrence of Indebtedness, the Company would be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Consolidated Coverage Ratio
test set forth in paragraph (a) of Section 3.3; and

 

(xi)                                restrictions
on cash or deposits imposed under contracts entered into in the ordinary course
of business in each case, that impose encumbrances or restrictions of the
nature described in clause (3) of paragraph (a) of this Section 3.7 on
such cash or deposit.

 

SECTION 3.12                    Limitation
on Sales of Assets and Subsidiary Stock. Section 3.13  The Company will not, and will not permit any
of its Restricted Subsidiaries to, make any Asset Disposition unless:

 

(1)                                  the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at least equal to the fair market value (such fair market value
to be determined on the date of contractually agreeing to such Asset
Disposition), as determined in good faith by the Board of Directors (including
as to the value of all non-cash consideration), of the shares and assets
subject to such Asset Disposition;

 

68

 

(2)                                  at
least 75% of the consideration from such Asset Disposition received by the
Company or such Restricted Subsidiary, as the case may be, 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 the Company or such Restricted Subsidiary, as the case may be:

 

(x)                                   first, to the extent the Company or any
Subsidiary Guarantor, as the case may be, elects (or is required by the terms
of any Indebtedness), to prepay, repay or purchase Indebtedness of the Company
or a Subsidiary Guarantor outstanding under a First Lien Credit Facility within
365 days from the later of the date of such Asset Disposition or the receipt of
such Net Available Cash; provided, however, that in connection with any
prepayment, repayment or purchase of Indebtedness pursuant to this clause (a),
the Company or such Subsidiary Guarantor will pay down such Indebtedness and
will cause the related commitment (if any) to be permanently reduced in an
amount equal to the principal amount so prepaid, repaid or purchased; and

 

(y)                                 second, to the extent of the balance of
such Net Available Cash after application in accordance with clause (a), to the
extent the Company or such Restricted Subsidiary elects, to invest in
Additional Assets within 365 days from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash

 

provided that to the extent Additional
Assets are received as a portion of the consideration in an Asset Disposition
transaction, the Company may treat such portion of the transaction as an Asset
Swap subject to compliance with the provisions of Section 3.8(g)  provided  further
that pending the final application of any such Net Available Cash in accordance
with Section 3.8(a)(3)(x) or Section 3.8(a)(3)(y) above, the
Company and its Restricted Subsidiaries may temporarily reduce Indebtedness or
otherwise invest such Net Available Cash in any manner not prohibited by this
Indenture.

 

(b)                                 Any
Net Available Cash from Asset Dispositions that are not applied or invested as
provided in the preceding paragraph (a) will be deemed to constitute “Excess
Proceeds.” Not later than the 366th day after an Asset
Disposition, if the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company will be required to make an offer (“Asset Disposition Offer”)
to all Holders and to the extent required by the terms of other Pari Passu
Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with
similar provisions requiring the Company to make an offer to purchase such Pari
Passu Indebtedness with the proceeds from any Asset Disposition (“Pari Passu
Notes”), to purchase the maximum principal amount of Notes and any such
Pari Passu Notes to which the Asset Disposition Offer applies that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount of the Notes and Pari Passu Notes plus
accrued and unpaid interest to the date of purchase, in accordance with the
procedures set forth in this Indenture or the agreements governing the Pari
Passu Notes, as applicable, in each case in integral multiples of $1,000. To
the extent that the aggregate amount of Notes and Pari Passu Notes so validly
tendered and not properly withdrawn pursuant to an Asset Disposition Offer is
less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes, subject to other covenants contained
in this Indenture. If the aggregate principal

 

69

 

amount of Notes
surrendered by Holders thereof and other Pari Passu Notes surrendered by
holders or lenders, collectively, exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and (in accordance with the Issuers’
instructions in compliance with the procedures set forth in the agreements
governing the Pari Passu Notes) the Pari Passu Notes to be purchased on a pro
rata basis on the basis of the aggregate principal amount of tendered Notes and
(in accordance with the Issuers’ instructions in compliance with the procedures
set forth in the agreements governing the Pari Passu Notes) Pari Passu Notes. Upon
completion of such Asset Disposition Offer, the amount of Excess Proceeds shall
be reset at zero.

 

(c)                                  The
Asset Disposition Offer will remain open for a period of 20 Business Days
following its commencement, except to the extent that a longer period is
required by applicable law (the “Asset Disposition Offer Period”). No
later than five Business Days after the termination of the Asset Disposition
Offer Period (the “Asset Disposition Purchase Date”), the Company will
purchase the principal amount of Notes and Pari Passu Notes required to be
purchased pursuant to this Section 3.8 (the “Asset Disposition Offer
Amount”) or, if less than the Asset Disposition Offer Amount has been so
validly tendered, all Notes and Pari Passu Notes validly tendered in response
to the Asset Disposition Offer.

 

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

 

(e)                                  On
or before the Asset Disposition Purchase Date, the Company will, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Asset Disposition Offer Amount of Notes and Pari Passu Notes or portions of
Notes and Pari Passu Notes so validly tendered and not properly withdrawn
pursuant to the Asset Disposition Offer, or if less than the Asset Disposition
Offer Amount has been validly tendered and not properly withdrawn, all Notes
and Pari Passu Notes so validly tendered and not properly withdrawn, in each
case in integral multiples of $1,000. The Company will deliver to the Trustee
an Officers’ Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section
3.8 and, in addition, the Company will deliver all certificates and notes
required, if any, by the agreements governing the Pari Passu Notes. The Company
or the Paying Agent, as the case may be, will promptly (but in any case not
later than five Business Days after termination of the Asset Disposition Offer
Period) mail or deliver to each tendering Holder or holder or lender of Pari
Passu Notes, as the case may be, an amount equal to the purchase price of the
Notes or Pari Passu Notes so validly tendered and not properly withdrawn by
such holder or lender, as the case may be, and accepted by the Company for
purchase, and the Company will promptly issue a new Note, and the Trustee, upon
delivery of an Officers’ Certificate from the Company, will authenticate and
mail or deliver such new Note to such holder, in a principal amount equal to
any unpurchased portion of the Note surrendered; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple of $1,000. In addition, the Company
shall take any and all other actions required by the agreements governing the
Pari Passu Notes. Any Note not so accepted shall be promptly mailed or delivered
by the Company to the holder thereof. The Company shall 

 

70

 

publicly announce
the results of the Asset Disposition Offer on the Asset Disposition Purchase
Date.

 

(f)                                    For
the purposes of this Section 3.7, the following will be deemed to be
cash: (1) the assumption by the transferee of Indebtedness (other than
Subordinated Obligations or Disqualified Stock) of the Company or Indebtedness
of a Restricted Subsidiary (other than Guarantor Subordinated Obligations or
Disqualified Stock of a Subsidiary Guarantor) and the release of the Company or
such Restricted Subsidiary from all liability on such Indebtedness in
connection with such Asset Disposition (in which case the Company will, without
further action, be deemed to have applied such deemed cash to Indebtedness in
accordance with clause (a) above); and (2) securities, notes or other
obligations received by the Company or any Restricted Subsidiary from the
transferee that are within 180 days converted by the Company or such Restricted
Subsidiary into cash.

 

(g)                                 The
Company will not, and will not permit any Restricted Subsidiary to, engage in
any Asset Swaps, unless (1) at the time of entering into such Asset Swap and
immediately after giving effect to such Asset Swap, no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof; and (2) the Company or such Restricted Subsidiary, as the case may be,
receives Additional Assets at least equal to the fair market value (such fair
market value to be determined on the date of contractually agreeing to such
Asset Swap), as determined in good faith by the Board of Directors of the
shares and assets subject to such Asset Swap and the terms of such Asset Swap
have been approved by a majority of the members of the Board of Directors of
the Company.

 

(h)                                 All
Net Available Cash received by the Company or any Restricted Subsidiary, as the
case may be, from any Recovery Event may be invested in Additional Assets or,
at the election of the Company, applied in accordance with the provisions above
relating to application of Net Available Cash from an Asset Disposition.

 

(i)                                     The
Company will comply, to the extent applicable, with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes pursuant to this Indenture. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this Section 3.8, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Indenture by virtue of any conflict.

 

(j)                                     For
the purposes of this Section 3.8, Holders electing to have a Note
purchased shall be required to surrender the Note, with an appropriate form
duly completed, to the Company at the address specified in the notice at least
three Business Days prior to the purchase date. Each Holder shall be entitled
to withdraw its election if the Company receives, not later than one Business
Day prior to the purchase date, a telegram, telex, facsimile transmission or
letter from such Holder setting forth the name of such Holder, the principal
amount of the Note or Notes which were delivered for purchase by such Holder
and a statement that such Holder is withdrawing his election to have such Note
or Notes purchased.

 

SECTION 3.14                    Limitation
on Transactions with Affiliates. Section 3.15  The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly,

 

71

 

enter into or conduct any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of the Company (an “Affiliate Transaction”) unless: (1) the terms of
such Affiliate Transaction are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained in
a comparable transaction at the time of such transaction in arm’s-length
dealings with a Person who is not such an Affiliate; (2) in the event such
Affiliate Transaction involves an aggregate consideration in excess of $1.0
million, the terms of such transaction have been approved by a majority of the
members of the Board of Directors of the Company and by a majority of the
members of such Board having no personal stake in such transaction, if any (and
such majority or majorities, as the case may be, determines that such Affiliate
Transaction satisfies the criteria in clause (1) above); and (3) in the event
such Affiliate Transaction involves an aggregate consideration in excess of
$10.0 million the Company has received a written opinion from an independent
investment banking, accounting or appraisal firm of nationally recognized
standing that such Affiliate Transaction is not materially less favorable than
those that might reasonably have been obtained in a comparable transaction at
such time on an arm’s length basis from a Person that is not an Affiliate.

 

(a)                                  The
provisions of paragraph (a) of this Section 3.9 shall not apply to:
(1) subject to the limitations in clause (7) below of this Section 3.9(b),
any Restricted Payment (other than a Restricted Investment) permitted to be
made pursuant to Section 3.4; (2) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment agreements and other compensation arrangements, options
to purchase Capital Stock of the Company, restricted stock plans, long-term
incentive plans, stock appreciation rights plans, participation plans or
similar employee benefits plans and/or indemnity provided on behalf of
officers, employees, consultants or directors approved by the Board of
Directors of the Company; (3) loans or advances to employees, officers,
consultants or directors in the ordinary course of business of the Company or
any of its Restricted Subsidiaries but in any event not to exceed $1.0 million
in the aggregate outstanding at any one time (without giving effect to the
forgiveness of any such loan); (4) any transaction between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries and Guarantees issued
by the Company or a Restricted Subsidiary for the benefit of the Company or a
Restricted Subsidiary, as the case may be, in accordance with Section 3.3;
(5) the payment of reasonable and customary fees paid to, and indemnity
provided on behalf of, directors of the Company or any Restricted Subsidiary;
(6) the existence of, and the performance of obligations of the Company or any
of its Restricted Subsidiaries under the terms of any agreement to which the
Company or any of its Restricted Subsidiaries is a party as of or on the Issue
Date, as these agreements may be amended, modified, supplemented, extended or
renewed from time to time; provided, however, that any future amendment,
modification, supplement, extension or renewal entered into after the Is sue
Date will be permitted to the extent that its terms are not more disadvantageous
in any material respect to the Holders than the terms of the agreements in
effect on the Is sue Date; (7) the entering into the Management Agreement and,
so long as no Default or Event of Default has occurred and is continuing,
payment thereunder in an aggregate amount in any fiscal year not to exceed $1.0
million; (8) transactions with customers, clients, suppliers or purchasers or
sellers of goods or services, in each case in the ordinary course of the
business of the Company and its Restricted Subsidiaries and otherwise in
compliance with the terms of this Indenture; provided
that in the reasonable determination of the members of the Board of Directors
or senior management of the Company, such transactions are on terms that are no
less

 

72

 

favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and (9) any issuance or sale of Capital
Stock (other than Disqualified Stock) to Affiliates of the Company and the
granting of registration and other customary rights in connection therewith.

 

SECTION 3.16                    Change
of Control. Section 3.17  If a Change
of Control occurs, each Holder shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder’s Notes at a purchase price in cash equal to 101% of the principal
amount of the Notes, plus accrued and unpaid interest and additional interest,
if any, to the date of purchase (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date); provided, however that notwithstanding the foregoing,
the Issuers shall not be obligated to repurchase Notes pursuant to this Section
3.10 if the Issuers have previously exercised their right to redeem Notes
pursuant to Section 5.1.

 

(a)                                  Within
30 days following any Change of Control, unless the Issuers have exercised
their right to redeem all of the Notes as described under Section 5.1,
the Company will mail a notice (the “Change of Control Offer”) to each
Holder (with a copy to the Trustee) stating:

 

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

 

(2)                                  the
repurchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed) (the “Change of Control Payment Date”);

 

(3)                                  the
procedures determined by the Issuers, consistent with this Section 3.10,
that a Holder must follow in order to have its Notes repurchased or to cancel
such order of purchase.

 

(4)                                  that
any Note not tendered shall continue to accrue interest pursuant to its terms;
and

 

(5)                                  that,
unless the Issuers default in the payment of the purchase price, any Note
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest on and after the Change of Control Payment Date;

 

(b)                                 Holders
electing to have a Note purchased shall be required to surrender the Note, with
an appropriate form duly completed, to the Issuers at the address specified in
the notice at least three (3) Business Days prior to the purchase date. Each
Holder shall be entitled to withdraw its election if the Issuers receive, not
later than one Business Day prior to the purchase date, a telegram, telex,
facsimile transmission or letter from such Holder setting forth the name of
such Holder, the principal amount of the Note or Notes which were delivered for
purchase by such Holder and a statement that such Holder is withdrawing his
election to have such Note or Notes purchased.

 

73

 

(c)                                  On
the Change of Control Payment Date, the Company will, to the extent lawful: (1)
accept for payment all Notes or portions of Notes (in integral multiples of
$1,000) properly tendered pursuant to the Change of Control Offer; (2) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions of Notes so tendered; and (3) deliver or cause
to be delivered to the Trustee the Notes so accepted together with an Officers’
Certificate stating the aggregate principal amount of the Notes or portions of
Notes being purchased by the Company. The Paying Agent will promptly mail, or
cause to be mailed, to the Holders of Notes so accepted, the Change of Control
Payment for such Notes, and the Trustee will promptly authenticate and deliver
(or cause to be transferred by book entry) to such Holders a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered; provided that each Note purchased and each
new Note issued will be in a principal amount of $1,000 or an integral multiple
thereof.

 

(d)                                 If
the Change of Control Payment Date is on or after an interest record date and
on or before the related interest payment date, accrued and unpaid interest, if
any, will be paid to the Person in whose name a Note is registered at the close
of business on such record date, and no additional interest will be payable to
Holders who tender pursuant to the Change of Control Offer.

 

(e)                                  The
Issuers shall publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.

 

(f)                                    Prior
to the Change of Control Payment Date, and as a condition to such mailing (i)
the requisite holders of each issue of Indebtedness issued under an indenture
or other agreement that may be violated by such payment shall have consented to
such Change of Control Offer being made and waived the event of default, if
any, caused by the Change of Control or (ii) the Company will repay all
outstanding Indebtedness issued under an indenture or other agreement that may
be violated by a payment to the Holders of Notes under a Change of Control
Offer or the Issuers must offer to repay all such Indebtedness, and make
payment to the holders of such Indebtedness that accept such offer, and obtain
waivers of any event of default from the remaining holders of such Indebtedness.
The Company covenants to effect such repayment or obtain such consent, it being
a Default of this Section 3.1(g) if the Company fails to comply with
such covenant.

 

(g)                                 The
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.

 

(h)                                 The
Company will comply, to the extent applicable, with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes pursuant to this Section 3.10. To
the extent that the provisions of any securities laws or regulations conflict
with provisions of this Section 3.10, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Indenture by virtue of the conflict.

 

74

 

SECTION 3.18                    Future
Note Guarantors. Section 3.19  After
the Issue Date, the Company will cause each Restricted Subsidiary, that is a
Domestic Subsidiary, created or acquired by the Company or one or more of its
Restricted Subsidiaries to execute and deliver to the Trustee a supplemental
indenture to this Indenture, substantially in the form attached as Exhibit C
hereto within 10 Business Days of the date on which it was acquired or created
pursuant to which such Subsidiary Guarantor will unconditionally Guarantee, on
a joint and several basis, the full and prompt payment of the principal of,
premium, if any and interest on the Notes on a senior unsecured basis.

 

(a)                                  Each
Subsidiary Guarantee shall be released in accordance with the provisions of Article
X.

 

SECTION 3.20                    Limitation
on Lines of Business. The Company shall not, and shall not permit any
Restricted Subsidiary to, engage in any business other than a Related Business.

 

SECTION 3.21                    Limitation
on Activities of Palace Finance. Other than in connection with or incident
to its obligations under the Notes and any Additional Notes and under this
Indenture, any future issuance of Indebtedness by the Company in accordance
with this Indenture that is co-issued by Palace Finance and its existence,
Palace Finance will not hold any assets, become liable for any obligations or
engage in any business activities. At any time after the Company or a Successor
Company is a corporation, Palace Finance may consolidate or merge with or into
the Company or any Restricted Subsidiary.

 

SECTION 3.22                    Payments
for Consent. None of the Parent, Issuers or any of the Company’s Restricted
Subsidiaries will, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fees or otherwise, to any Holder of
any Notes for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid or is paid to all Holders that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or amendment.

 

SECTION 3.23                    Maintenance
of Office or Agency. The Issuers shall maintain an office or agency where
the Notes may be presented or surrendered for payment, where, if applicable,
the Notes may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Issuers in respect of the Notes and this
Indenture may be served. The office of the Trustee, at Wells Fargo Bank, N.A.,
Corporate Trust Services, Sixth and Marquette, Mac N9303-120, Minneapolis,
Minnesota 55479, shall be such office or agency of the Issuers for payment,
unless the Issuers shall designate and maintain some other office or agency for
one or more of such purposes. The Issuers shall give prompt written notice to
the Trustee of any change in the location of any such office or agency. If at
any time the Issuers shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Issuers hereby appoint the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.

 

75

 

The Issuers may also from time to time designate one
or more other offices or agencies (in or outside of The City of New York) where
the Notes may be presented or surrendered for any or all such purposes and may
from time to time rescind any such designation. The Issuers shall give prompt
written notice to the Trustee of any such designation or rescission and any
change in the location of any such other office or agency.

 

SECTION 3.24                    Money
for Note Payments to Be Held in Trust. If the Issuers shall at any time act
as its own Paying Agent, it shall, on or before each due date of the principal
of (or premium, if any) or interest on any of the Notes, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal of (or premium, if any) or interest so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided
and shall promptly notify the Trustee in writing of its action or failure to so
act.

 

Whenever the Issuers shall have one or more Paying
Agents for the Notes, it shall, on or before each due date of the principal of
(or premium, if any) or interest on any Notes, deposit with any Paying Agent a
sum in same day funds (or New York Clearing House funds if such deposit is made
prior to the date on which such deposit is required to be made) that shall be
available to the Trustee by 10:00 a.m. New York City time on such due date
sufficient to pay the principal (and premium, if any) or interest so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest, and (unless such Paying Agent is the Trustee)
the Issuers shall promptly notify the Trustee in writing of such action or any
failure to so act.

 

The Issuers shall cause each Paying Agent (other than
the Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this Section
3.16, that such Paying Agent shall:

 

(a)                                  hold
all sums held by it for the payment of the principal of (and premium, if any)
or interest on Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided;

 

(b)                                 give
the Trustee prompt written notice of any default by the Issuers (or any other
obligor upon the Notes) in the making of any payment of principal (and premium,
if any) or interest; and

 

(c)                                  at
any time during the continuance of any such default, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent.

 

The Issuers may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Issuers’ Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Issuers or such Paying Agent, such sums
to be held by the Trustee upon the same trusts as those upon which such sums
were held by the Issuers or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such sums.

 

76

 

Any money deposited with the Trustee or any Paying
Agent, or then held by the Issuers, in trust for the payment of the principal
of (or premium, if any) or interest on any Note and remaining unclaimed for two
years after such principal, premium or interest has become due and payable
shall be paid to the Issuers on Issuers’ Order, or (if then held by the
Issuers) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuers for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuers as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment to the Issuers, shall
at the expense of the Issuers cause to be published once, in a leading daily
newspaper (if practicable, The Wall Street
Journal (Eastern Edition)) printed in the English language and of
general circulation in New York City, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication nor shall it be later than two years after
such principal (or premium, if any) or interest shall have become due and
payable, any unclaimed balance of such money then remaining shall be repaid to
the Issuers.

 

SECTION 3.25                    Maintenance
of Existence. Subject to Article IV, the Issuers shall do or cause to be
done all things necessary to preserve and keep in full force and effect their
existence and that of each Restricted Subsidiary and the rights (charter and
statutory) licenses and franchises of the Issuers and each Restricted
Subsidiary; provided, however, that the Issuers shall not be
required to preserve any such existence (except the Issuers), right, license or
franchise if the Board of Directors of the Issuers shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Issuers and each of its Restricted Subsidiaries, taken as a whole, and that
the loss thereof is not, and shall not be, disadvantageous in any material
respect to the Holders.

 

SECTION 3.26                    Payment
of Taxes and Other Claims. The Issuers shall pay or discharge or cause to
be paid or discharged, before the same shall become delinquent, (i) all
material taxes, assessments and governmental charges levied or imposed upon the
Issuers or any Subsidiary or upon the income, profits or property of the
Issuers or any Subsidiary and (ii) all lawful claims for labor, materials and supplies,
which, if unpaid, might by law become a material liability or lien upon the
property of the Issuers or any Subsidiary; provided, however, that the Issuers shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which appropriate
reserves, if necessary (in the good faith judgment of management of the
Issuers) are being maintained in accordance with GAAP.

 

SECTION 3.27                    Compliance
Certificate. The Issuers shall deliver to the Trustee within 120 days after
the end of each Fiscal Year of the Issuers a certificate executed by the
Issuers’ principal executive officer, principal accounting officer or principal
financial officer stating that in the course of the performance by the signer
of his or her duties as such officer he or she would normally have knowledge of
any Default or Event of Default and whether or not the signer knows of any Default
or Event of Default that occurred during such period. If he or she does, the
certificate shall describe the Default or Event of Default, its status and what
action the Issuers are taking or proposes to take with respect thereto. The
Issuers also shall comply with TIA § 314(a)(4). An Officers’ Certificate
shall also notify the Trustee should the then current Fiscal Year be changed to
end on any date other than on the date as herein defined.

 

77

 

SECTION 3.28                    Additional
Interest Notices. In the event that the Issuers are required to pay
additional interest to Holders pursuant to the Registration Rights Agreement,
the Issuers shall provide written notice (an “Additional Interest Notice”) to
the Trustee of its obligation to pay additional interest no later than five
Business Days prior to the proposed payment date set for the amount of
additional interest, and the Additional Interest Notice shall set forth the
amount of additional interest to be paid by the Issuers on such Payment Date. The
Trustee shall not at any time be under any duty or responsibility to any Holder
to determine the additional interest, or with respect to the nature, extent, or
calculation of the amount of additional interest when made, or with respect to
the method employed in such calculation of the additional interest.

 

ARTICLE IV

 

Successor Company
and Successor Guarantor

 

SECTION 4.1                          Merger
and Consolidation of the Company and Parent. Section 4.2  The Company will not consolidate with or merge
with or into, or convey, transfer or lease all or substantially all its assets
to, any Person, unless:

 

(1)                                  (a)
the resulting, surviving or transferee Person (the “Successor Company”)
will be a corporation or limited liability company organized and existing under
the laws of the United States of America, any State of the United States or the
District of Columbia, (b) the Successor Company (if not the Company) will
expressly assume, by supplemental indenture (and other applicable documents),
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Notes, this Indenture and the
Registration Rights Agreement; and (c) if the Successor Company is a limited
liability company, a corporation will continue to be a co-issuer of the Notes;

 

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

 

(3)                                  immediately
after giving effect to such transaction, (A) the Successor Company would be
able to Incur at least an additional $1.00 of Indebtedness pursuant to Section
3.3(a) or (B) the Consolidated Coverage Ratio for the Successor Company and
its Restricted Subsidiaries (i) would be greater than such ratio for the
Company and its Restricted Subsidiaries immediately prior to such transaction
and (ii) would be at least 1.80 to 1.00;

 

(4)                                  each
Note Guarantor (unless it is the other party to the transactions above, in
which case clause (1) shall apply) shall have by supplemental indenture confirmed
that its Note Guarantee shall apply to such Person’s obligations in respect of
this Indenture and the Notes, and its obligations Registration Rights Agreement
shall continue to be in effect; and

 

78

 

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

 

Notwithstanding Section 4.1(a)(3), (x) any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company, (y) the Company may merge with an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another jurisdiction and (z) the Company may merge with and into Palace Finance
so long as the surviving entity is a corporation; provided that, in the case of a Restricted Subsidiary that
merges into the Company, the Company will not be required to comply with Section
4.1(5).

 

(b)                                 Parent
will not consolidate with or merge with or into, or convey, transfer or lease
all or substantially all its assets to, any Person, unless:

 

(1)(a) the resulting, surviving or transferee Person
(the “Successor Parent”) will be a corporation organized and existing
under the laws of the United States of America, any State of the United States
or the District of Columbia, and (b) the Successor Parent (if not Parent) will
expressly assume, by supplemental indenture (and other applicable documents),
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of Parent under the Note Guarantee, this Indenture, and the
Registration Rights Agreement;

 

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

 

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

 

(c)                                  For
purposes of this Article IV, 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 the Company, which properties and
assets, if held by Parent or the Company, as the case may be, instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of Parent or the Company on a consolidated basis, respectively, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of Parent or the Company, as the case may be.

 

(d)                                 Upon
compliance with the applicable provisions of this Section 4.1, the
predecessor entity will be released from its obligations under this Indenture
and the Parent Guarantee, as applicable, and the Successor Company or Successor
Parent shall succeed to, and be substituted for, and may exercise every right
and power of, the predecessor entity under this Indenture, but, in the case of
a lease of all or substantially all its assets, the predecessor entity will not
be released from the obligation to pay the principal of and interest on the
Notes or the payment obligations under the Parent Guarantee, as applicable.

 

79

 

SECTION 4.3                          Merger
and Consolidation of Subsidiary Guarantors. (a) The Company shall not
permit any Subsidiary Guarantor to consolidate with, merge with or into any
Person (other than another Subsidiary Guarantor) and shall not permit the
conveyance, transfer or lease of all or substantially all of the assets of any
Subsidiary Guarantor (other than to another Subsidiary Guarantor) unless:

 

(1)                                  if
such entity remains a Subsidiary Guarantor, the resulting, surviving or
transferee Person shall be a corporation, partnership, trust or limited
liability company organized and existing under the laws of the United States of
America, any State of the United States or the District of Columbia;

 

(2)                                  immediately
after giving effect to such transaction (and treating any Indebtedness that
becomes an obligation of the resulting, surviving or transferee Person or any
Restricted Subsidiary as a result of such transaction as having been Incurred
by such Person or such Restricted Subsidiary at the time of such transaction),
no Default of Event of Default shall have occurred and be continuing;

 

(3)                                  if
such entity remains a Subsidiary Guarantor, the resulting, surviving or
transferee Person assumes all the obligations of such Subsidiary Guarantor
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Notes, this Indenture and the
Registration Rights Agreement;

 

(4)                                  the
transaction is made in compliance with Section 3.8 and this Section 4.2;
and

 

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

 

(6)                                  Notwithstanding
Section 4.2, if any Subsidiary Guarantor consolidates with, merges with
or into another Subsidiary Guarantor, or conveys, transfers or leases of all or
substantially all of its assets to another Subsidiary Guarantor, the resulting,
surviving or transferee Subsidiary Guarantor shall comply with the applicable
requirements Section 4.2(a)(3).

 

ARTICLE V

 

Redemption of
Notes

 

SECTION 5.1                          Optional
Redemption. The Notes may be redeemed, as a whole or from time to time in
part, subject to the conditions and at the redemption prices specified in
paragraph 5 of the form of Notes set forth in Exhibit A and Exhibit B hereto,
which are hereby incorporated by reference and made a part of this Indenture,
together with accrued and unpaid interest to the Redemption Date (as defined
below).

 

SECTION 5.2                          Applicability
of Article. Redemption of Notes at the election of the Issuers or
otherwise, as permitted or required by any provision of this Indenture, shall
be made in accordance with such provision and this Article.

 

80

 

SECTION 5.3                          Election
to Redeem. The election of the Issuers to redeem any Notes pursuant to
Section 5.1 shall be evidenced by a Board Resolution of each of the Issuers.

 

SECTION 5.4                          Selection
by Trustee of Notes to Be Redeemed. If less than all the Notes are to be
redeemed at any time pursuant to an optional redemption, the particular Notes
to be redeemed shall be selected not more than 60 days prior to the Redemption
Date (as defined below) by the Trustee, from the outstanding Notes not
previously called for redemption, in compliance with the requirements of the
principal securities exchange, if any, on which such Notes are listed, or, if
such Notes are not so listed, on a pro rata
basis among the classes of Notes, by lot or by such other method as the Trustee
shall deem fair and appropriate (and in such manner as complies with applicable
legal requirements) and which may provide for the selection for redemption of
portions of the principal of the Notes; although no Note of $1,000 in original
principal amount or less will be redeemed in part. If any Note is to be
redeemed in part only, the notice of redemption relating to such Note will
state the portion of the principal amount thereof to be redeemed.

 

The Trustee shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the method it has chosen for the selection of
Notes and the principal amount thereof to be redeemed.

 

For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Notes shall
relate, in the case of any Note redeemed or to be redeemed only in part, to the
portion of the principal amount of such Note which has been or is to be
redeemed.

 

SECTION 5.5                          Notice
of Redemption. Notice of redemption shall be given in the manner provided
for in Section 11.2 not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Notes to be redeemed. At the Company’s
request, the Trustee shall give notice of redemption in the Company’s name and
at the Company’s expense; provided, however, that the Company shall deliver
to the Trustee, at least 35 days (or such shorter period of time as shall be satisfactory
to the Trustee) prior to the redemption date (the “Redemption Date”) fixed by
the Company or 15 days prior to the date on which notice is to be given to the
Holders, an Officers’ Certificate requesting that the Trustee give such notice
at the Company’s expense and setting forth the information to be stated in such
notice as provided in the following items. Any such notice may be cancelled at
any time prior to notice of such redemption being mailed to any Holder and
shall thereby be void and of no effect.

 

All notices of redemption shall state:

 

(i)                                     the
Redemption Date,

 

(ii)                                  the
redemption price (or the method of calculating the redemption price) and the
amount of accrued interest to the Redemption Date payable as provided in Section
5.7, if any,

 

(iii)                               if
less than all outstanding Notes are to be redeemed, the method for selecting
the Notes to

 

81

 

be redeemed, as well as the aggregate principal amount
of Notes to be redeemed and the aggregate principal amount of Notes to be
outstanding after such partial redemption,

 

(iv)                              in
case any Note is to be redeemed in part only, (a) the notice which relates to
such Note shall state that on and after the Redemption Date, upon surrender of
such Note, the Holder shall receive, without charge, a new Note or Notes of
authorized denominations for the principal amount thereof remaining unredeemed
and (b) such documentation and records as shall enable to Trustee to select the
Notes to be redeemed pursuant to Section 5.4.

 

(v)                                 that
on the Redemption Date the redemption price (and accrued interest, if any, to
the Redemption Date payable as provided in Section 5.7) shall become due
and payable upon each such Note, or the portion thereof, to be redeemed, and,
unless the Company defaults in making the redemption payment, that interest on
Notes called for redemption (or the portion thereof) shall cease to accrue on
and after said date,

 

(vi)                              the
place or places where such Notes are to be surrendered for payment of the redemption
price and accrued interest, if any,

 

(vii)                           the
name and address of the Paying Agent,

 

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

 

(ix)                                the
CUSIP number, that no representation is made as to the accuracy or correctness
of the CUSIP number, if any, listed in such notice or printed on the Notes, and
any redemption shall not be affected by any defect in such CUSIP numbers, and

 

(x)                                   the
paragraph of the Notes pursuant to which the Notes are to be redeemed.

 

SECTION 5.6                          Deposit
of Redemption Price. By 10:00 a.m., New York City time, on any Redemption
Date, the Company shall deposit with the Paying Agent (or, if the Company or a
Wholly Owned Subsidiary that is a Domestic Subsidiary is a Paying Agent, shall
segregate and hold in trust as provided in Section 2.4) an amount of money
sufficient to pay the redemption price of, and accrued interest on, all the
Notes which are to be redeemed on that date other than Notes or portions of
Notes called for redemption that are beneficially owned by the Company and have
been delivered by the Company to the Trustee for cancellation.

 

SECTION 5.7                          Notes
Payable on Redemption Date. Notice of redemption having been given as
aforesaid, the Notes or portions of Notes so to be redeemed shall, on the
Redemption Date, become due and payable at the redemption price therein
specified (together with accrued interest, if any, to the Redemption Date), and
from and after such date (unless the Company shall default in the payment of
the redemption price and accrued interest) such Notes shall cease to bear
interest. Upon surrender of any such Note for redemption in accordance with
said notice, such Note shall be paid by the Company at the redemption price,
together with accrued interest, if any, to the Redemption Date (subject to the
rights of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date).

 

82

 

If any Note called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Notes.

 

SECTION 5.8         Notes
Redeemed in Part. Any Note which is to be redeemed only in part (pursuant
to the provisions of this Article) shall be surrendered at the office or agency
of the Company maintained for such purpose pursuant to Section 3.14 (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holder’s attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
make available for delivery to the Holder of such Note at the expense of the
Company, a new Note or Notes, of any authorized denomination as requested by
such Holder, in an aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered, provided, that each such new Note will be
issued in denominations of $1,000 or an integral multiple thereof.

 

ARTICLE VI

Defaults and Remedies

 

SECTION 6.1         Events
of Default. Each of the following is an “Event of Default”:

 

(1)           default in
any payment of interest or additional interest (as required by the Registration
Rights Agreement) on any Note when due, continued for 30 days;

 

(2)           default in
the payment of principal of or premium, if any, on any Note when due at its
Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise;

 

(3)           failure by
an Issuer or any Subsidiary Guarantor to comply with its obligations under Article
IV;

 

(4)           failure by
an applicable Issuer to comply for 30 days after notice as provided below with
any of its obligations described under Sections 3.2, 3.3, 3.4,
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11,
3.12, 3.13 and 3.14 (in each case, other than a failure to
purchase Notes which will constitute an Event of Default under clause (2)
above);

 

(5)           failure by
an applicable Issuer to comply for 60 days after notice as provided below with
its other agreements in this Indenture;

 

(6)           default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which
is Guaranteed by the Company or any of its Restricted Subsidiaries), other than
Indebtedness owed to the Company or a Restricted Subsidiary, whether such
Indebtedness or Guarantee now exists, or is created after the date of this
Indenture, which default:

 

83

 

(a)           is
caused by a failure to pay principal of, or interest or premium, if any, on
such Indebtedness prior to 15 days after the expiration of the grace period, if
any, provided in such Indebtedness (“payment default”) or

 

(b)           results
in the acceleration of such Indebtedness prior to its maturity (the “cross
acceleration provision”);

 

and,
in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
payment default or the maturity of which has been so accelerated, aggregates
$5.0 million or more;

 

(7)           an Is suer
or a Significant Subsidiary or group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries) would constitute a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

 

(A)          commences
a voluntary case or proceeding;

 

(B)           consents
to the entry of a judgment, decree or order for relief against it in an
involuntary case or proceeding;

 

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

 

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

 

(E)           consents
to or acquiesces in the institution of a bankruptcy or an insolvency proceeding
against it;

 

(F)           takes
any corporate action to authorize or effect any of the foregoing; or

 

(G)           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 in an involuntary case against an Issuer or any Significant
Subsidiary or a group of Restricted Subsidiaries that, taken together (as of
the latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary pursuant to
or within the meaning of the Bankruptcy Law;

 

(B)           appoints
a Custodian for all or substantially all of the property of an Issuer or any
Significant Subsidiary or a group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries) would constitute a Significant
Subsidiary pursuant to or within the meaning of the Bankruptcy Law;

 

84

 

(C)           orders
the winding up or liquidation of an Issuer or any Significant Subsidiary or a
group of Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries) would constitute a Significant Subsidiary pursuant to or within
the meaning of the Bankruptcy Law; and

 

(D)          in
each case, the order, decree or relief remains unstayed and in effect for 60
days;

 

(9)           failure by
an Issuer or any Significant Subsidiary or group of Restricted Subsidiaries
that, taken together (as of the latest audited consolidated financial
statements for the Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary to pay final judgments aggregating in excess of $5.0
million (net of any amounts covered by a reputable and creditworthy insurance
company), which judgments are not paid, discharged or stayed for a period of 60
days (the “judgment default provision”); or

 

(10)         any Note
Guarantee ceases to be in full force and effect (except as contemplated by the
terms of this Indenture) or is declared null and void in a judicial proceeding
or any Note Guarantor denies or disaffirms its obligations under this Indenture
or its Note Guarantee.

 

However, a default under clauses (4) and (5) of this
paragraph will not constitute an Event of Default until the Trustee or the
Holders of 25% in principal amount of the outstanding Notes notify the Issuers
in writing of the default and the Issuers do not cure such default within the
time specified in clauses (4) and (5) of this paragraph after receipt of such
notice.

 

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

 

The Issuers shall deliver to the Trustee, promptly,
but in no event later than 30 days after, a senior officer of the Issuers
becomes aware of any events which would constitute an Event of Default under
clauses (3), (4), (5), (6), (7), (8), (9) or (10) of this Section 6.1 in
the form of an Officers’ Certificate, which Officers’ Certificate shall provide
their status and what action the Issuers is taking or proposing to take in
respect thereof.

 

SECTION 6.2         Acceleration.
If an Event of Default (other than an Event of Default described in clauses (7)
or (8) of Section 6.1) occurs and is continuing, the Trustee by written notice
to Issuers, or the Holders of at least 25% in principal amount of the
outstanding Notes by written notice to the Issuers and the Trustee, may, and
the Trustee at the request of such Holders shall, declare the principal of,
premium, if any, and accrued and unpaid interest, if any, on all the Notes to
be due and payable. Upon such a declaration, such principal, premium and
accrued and unpaid interest shall be due and payable immediately.

 

In the event of a declaration of acceleration of the
Notes because an Event of Default described in clause (6) of Section 6.1
has occurred and is continuing, the declaration of 

 

85

 

acceleration of the Notes shall be automatically annulled if the event
of default or payment default triggering such Event of Default pursuant to
clause (6) of Section 6.1 shall be remedied or cured by the Company or a
Restricted Subsidiary or waived by the holders of the relevant Indebtedness
within 20 days after the declaration of acceleration with respect thereto and
if (1) the annulment of the acceleration of the Notes would not conflict with
any judgment or decree of a court of competent jurisdiction and (2) all
existing Events of Default, except nonpayment of principal, premium or interest
on the Notes that became due solely because of the acceleration of the Notes,
have been cured or waived.

 

If an Event of Default described in clauses (7) and
(8) of Section 6.1 occurs and is continuing, the principal of, premium,
if any, and accrued and unpaid interest on all the Notes will become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.

 

SECTION 6.3         Other
Remedies. If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of (or premium, if any) or interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder 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 6.4         Waiver
of Past Defaults. Subject to Section 9.2, the Holders of a majority in
principal amount of the outstanding Notes by notice to the Trustee may waive
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes) all past Defaults or Events
of Default except a Default or Event of Default in the payment of principal,
premium or interest on any Note and rescind any such acceleration with respect
to the Notes and its consequences; provided
that (1) such recission would not conflict with any judgment or decree of a
court of competent jurisdiction and (2) all existing Events of Default, other
than the nonpayment of the principal of, premium, if any, and interest on the
Notes that have become due solely by such declaration of acceleration, have
been cured or waived. When a Default or Event of Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any consequent right.

 

SECTION 6.5         Control
by Majority. The Holders of a majority in principal amount of the
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust
or power conferred on the Trustee. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture or, subject to Sections
7.1 and 7.2, that the Trustee determines is unduly prejudicial to the rights of
other Holders or would involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be 

 

86

 

entitled to indemnification satisfactory to it in its sole discretion
against all losses and expenses caused by taking or not taking such action.

 

SECTION 6.6         Limitation
on Suits. Subject to the provisions of this Indenture relating to the
duties of the Trustee, if an Event of Default occurs and is continuing, the
Trustee will be under no obligation to exercise any of the rights or powers
under this Indenture at the request or direction of any of the Holders unless
such Holders have offered to the Trustee reasonable indemnity or security
against any loss, liability or expense. Except to enforce the right to receive
payment of principal, premium, if any, or interest when due, no Holder may
pursue any remedy with respect to this Indenture or the Notes unless:

 

(1)  such Holder has previously given the Trustee
notice that an Event of Default is continuing;

 

(2)  Holders of at least 25% in principal amount
of the outstanding Notes have requested the Trustee to pursue the remedy;

 

(3)  such Holders have offered the Trustee reasonable
security or indemnity against any loss, liability or expense;

 

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

 

(5)  the Holders of a majority in principal amount
of the outstanding Notes have not given the Trustee a direction that, in the
opinion of the Trustee, is inconsistent with such request within such 60-day
period.

 

SECTION 6.7         Rights
of Holders to Receive Payment. Notwithstanding any other provision of this
Indenture (including, without limitation, Section 6.6), the right of any Holder
to receive payment of principal of, premium, if any, or interest on the Notes
held by such Holder, on or after the respective due dates expressed in the
Notes, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.

 

SECTION 6.8         Collection
Suit by Trustee. If an Event of Default specified in clauses (1) or (2) of
Section 6.1 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Issuers 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 7.7.

 

SECTION 6.9         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 (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and the Holders allowed in any judicial proceedings relative to the Issuers,
their Subsidiaries or its or their respective creditors or properties and,
unless prohibited by law or applicable regulations, may be entitled and
empowered to participate as a member of any official committee of creditors
appointed in such matter and may vote on behalf of the Holders in any election
of a trustee in bankruptcy or 

 

87

 

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, its agents and its counsel pursuant to Section 7.7 and any other amounts
due the Trustee hereunder. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

 

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

 

	
  First:

  	
   

  	
  to the Trustee for amounts due under Section 7.7;

  
	
   

  	
   

  	
   

  
	
  Second:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Third:

  	
   

  	
  to the Issuers.

  

 

The Trustee may fix a record date and payment date for
any payment to Holders pursuant to this Section 6.10. At least 15 days
before such record date, the Issuers shall mail to each Holder and the Trustee
a notice that states the record date, the payment date and amount to be paid.

 

SECTION 6.11       Undertaking
for Costs. In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by the Issuers, a suit by a Holder pursuant to Section 6.7 or a
suit by Holders of more than 10% in outstanding principal amount of the Notes.

 

ARTICLE VII

Trustee

 

SECTION 7.1         Duties
of Trustee. Section 7.2  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; provided that if an
Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under this Indenture at the
request or direction of any of the 

 

88

 

Holders unless such Holders have offered the Trustee indemnity or
security satisfactory to the Trustee against loss, liability or expense.

 

(a)           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, in the case of any such
certificates or opinions which by any provisions hereof are specifically required
to be furnished to the Trustee, the Trustee shall examine such certificates and
opinions to determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of mathematical
calculations or otherwise verify the contents thereof).

 

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

 

(1)           this
paragraph does not limit the effect of paragraph (b) of this Section 7.1;

 

(2)           the
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; 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
6.5 or Section 6.6.

 

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

 

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

 

(e)           No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any 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.

 

(f)            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 7.1 and to the provisions of the TIA.

 

89

 

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

 

SECTION 7.3         Rights
of Trustee. Section 7.4  The Trustee
may conclusively rely and shall be protected in acting or refraining from
acting upon any paper or document believed by it to be genuine and to have been
signed or presented by the proper Person or Persons. The Trustee need not
investigate any fact or matter stated in the document.

 

(a)           Before the
Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel or both. 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.

 

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

 

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

 

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

 

(e)           The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, notice,
request, direction, consent, order, bond or other paper or document; but the
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Issuers and Note Guarantors at reasonable times and
in a reasonable manner, personally or by agent or attorney at the sole cost of
the Issuers and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation.

 

(f)            The
Trustee shall not be deemed to have knowledge of any Default or Event of
Default except (i), during any period it is serving as Registrar and Paying
Agent for the Notes, any Event of Default occurring pursuant to Section
6.1(1) and 6.1(2), or (ii) any Default or Event of Default of which
a Responsible Officer shall have received written notification or obtained “actual
knowledge.”  “Actual knowledge” shall
mean the actual fact or statement of knowing by a Responsible Officer without
independent investigation with respect thereto.

 

(g)           Delivery
of the reports, information and documents to the Trustee pursuant to Section
3.2 is for informational purposes only and the Trustee’s receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from 

 

90

 

information contained
therein, including the Issuers’ compliance with any of the covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers’
Certificates).

 

(h)           In no
event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited
to, loss of profit) irrespective of whether the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.

 

(i)            The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each agent, custodian and other Person employed to act hereunder.

 

(j)            The
Trustee may request that each Issuer deliver an Officers’ Certificate setting
forth the names of individuals and/or titles of officers authorized at such
time to take specified actions pursuant to this Indenture, which Officers’
Certificate may be signed by any person authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded.

 

SECTION 7.5         Individual
Rights of Trustee. The Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with the Issuers or
their Affiliates with the same rights it would have if it were not Trustee. Any
Paying Agent, Registrar or co-paying agent may do the same with like rights. However,
the Trustee must comply with Sections 7.10 and 7.11. In addition, the Trustee
shall be permitted to engage in transactions with the Issuers; provided,
however, that if the Trustee acquires any conflicting interest the
Trustee must (i) eliminate such conflict within 90 days of acquiring such
conflicting interest, (ii) apply to the SEC for permission to continue acting
as Trustee or (iii) resign.

 

SECTION 7.6         Trustee’s
Disclaimer. The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers’ use of the Notes or the proceeds from the Notes,
and it shall not be responsible for any statement of the Issuers in this
Indenture or in any document issued in connection with the sale of the Notes or
in the Notes other than the Trustee’s certificate of authentication or for the
use or application of any funds received by any Paying Agent other than the
Trustee.

 

SECTION 7.7         Notice
of Defaults. If a Default or Event of Default occurs and is continuing and
if a Responsible Officer has actual knowledge thereof, the Trustee shall mail
to each Holder notice of the Default or Event of Default within 90 days after
it occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium (if any), or interest on any Note (including payments
pursuant to the required repurchase provisions of such Note, if any), the
Trustee may withhold the notice if and so long as its board of directors, a
committee of its board of directors or a committee of its Responsible Officers
and/or a Responsible Officer in good faith determines that withholding the
notice is in the interests of Holders.

 

SECTION 7.8         Reports
by Trustee to Holders. As promptly as practicable after each September 15
beginning with the September 15 following the date of this Indenture, 

 

91

 

and in any event prior to October 15 in each year, the Trustee shall
mail to each Holder a brief report dated as of such September 15 that complies
with TIA § 313(a), if and to the extent such report may be required by the TIA.
The Trustee also shall comply with TIA § 3 13(b). The Trustee shall also
transmit by mail all reports required by TIA § 3 13(c).

 

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

 

SECTION 7.9         Compensation
and Indemnity. The Issuers and the Note Guarantors, jointly and severally,
shall pay to the Trustee from time to time such compensation for its services
as the parties shall agree in writing from time to time. The Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuers and the Note Guarantors, jointly and severally,
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by it, including, but not
limited to, costs of collection, costs of preparing and reviewing reports,
certificates and other documents, costs of preparation and mailing of notices
to Holders and reasonable costs of counsel retained by the Trustee in
connection with the delivery of an Opinion of Counsel or otherwise, 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 Issuers and the Note Guarantors,
jointly and severally, shall indemnify the Trustee, and each of its officers,
directors, counsel and agents, against any and all loss, liability or expense
(including, but not limited to, reasonable attorneys’ fees and expenses) and
taxes (other than those based upon or determined by the income of the Trustee)
incurred by it in connection with the acceptance or administration of this
trust and the performance of its duties hereunder, including the costs and
expenses of enforcing this Indenture (including this Section 7.7) and the Notes
and of defending itself against any claims (whether asserted by any Holder, the
Issuers or otherwise). The Trustee shall notify the Issuers promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Issuers shall not relieve the Issuers of its obligations hereunder. The Issuers
shall defend the claim and the Trustee may have separate counsel and the
Issuers shall pay the fees and expenses of such counsel. The Issuers and the
Note Guarantors need not reimburse any expense or indemnify against any loss,
liability or expense incurred by the Trustee through the Trustee’s own willful
misconduct, negligence or bad faith, subject to the exceptions contained in
Section 7.1(c) hereof.

 

To secure the Issuers’ and the Note Guarantors’
payment obligations in this Section 7.7, the Trustee shall have a lien
prior to the Notes on all money or property held or collected by the Trustee
other than money or property held in trust to pay principal of and interest on
particular Notes. The Trustee’s right to receive payment of any amounts due
under this Section 7.7 shall not be subordinate to any other liability
or indebtedness of the Issuers or the Note Guarantors.

 

The Issuers’ payment obligations pursuant to this Section
7.7 and any lien arising hereunder shall survive the discharge of this
Indenture and the resignation or removal of the Trustee. When the Trustee
incurs expenses after the occurrence of a Default specified in 

 

92

 

Section 6.1(7) or (8), the expenses are
intended to constitute expenses of administration under any Bankruptcy Law.

 

SECTION 7.10       Replacement
of Trustee. The Trustee may resign at any time by so notifying the Issuers
in writing. The Holders of a majority in principal amount of the Notes may
remove the Trustee by so notifying the Issuers and the Trustee in writing and
may appoint a successor Trustee. The Issuers 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 or is removed by the Issuers or
by the Holders of a majority in principal amount of the Notes and such Holders
do not reasonably promptly appoint a successor Trustee, or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Issuers shall promptly appoint
a successor Trustee.

 

A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Issuers. 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 Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided that all sums owing to the
Trustee hereunder have been paid and subject to the lien provided for in Section
7.7.

 

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

 

If the Trustee fails to comply with Section 7.10,
unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b), any
Holder 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 7.8, the Issuers’ obligations under Section
7.7 shall continue for the benefit of the retiring Trustee.

 

SECTION 7.11       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, banking association or other entity, the
resulting, surviving or transferee entity without any further act shall be the
successor Trustee.

 

93

 

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

 

SECTION 7.12       Eligibility;
Disqualification. The Trustee shall at all times satisfy the requirements
of TIA § 3 10(a). The Trustee shall have a combined capital and surplus of at
least $50 million as set forth in its most recent filed annual report of
condition. The Trustee shall comply with TIA § 310(b).

 

SECTION 7.13       Preferential
Collection of Claims Against Issuers. If and when the Trustee shall be or
become a creditor of the Issuers, 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 VIII

Discharge of Indenture; Defeasance

 

SECTION 8.1         Discharge
of Liability on Notes; Defeasance. (a) Subject to Section 8.1(c), when
(i)(x) the Issuers deliver to the Trustee all outstanding Notes (other than
Notes replaced pursuant to Section 2.10) for cancellation or (y) all
outstanding Notes not theretofore delivered for cancellation have become due
and payable at maturity, whether at maturity or upon redemption or shall become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption pursuant to Article V hereof and the Issuers or any Note Guarantor
irrevocably deposits or causes to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders money in U.S. dollars,
non-callable U.S. Government Obligations, or a combination thereof, in such
amounts as shall be sufficient without consideration of any reinvestment of
interest to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation for principal, premium,
if any, and accrued interest to the date of maturity or redemption; (ii) no
Default or Event of Default shall have occurred and be continuing on the date
of such deposit or shall occur as a result of such deposit and such deposit
shall not result in a breach or violation of, or constitute a default under,
any other instrument to which either Issuer or any Note Guarantor is a party or
by which either Issuer or any Note Guarantor is bound; (iii) Issuers or any
Note Guarantor has paid or cause to be paid all sums payable under this
Indenture and the Notes; and (iv) the Issuers have delivered irrevocable
instructions to the Trustee under this Indenture to apply the deposited money
toward the payment of such Notes at maturity or the Redemption Date, as the
case may be, then the Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Issuers (accompanied by an Officers’
Certificate and an Opinion of Counsel stating that all conditions 

 

94

 

precedent specified herein relating to the satisfaction and discharge
of this Indenture have been complied with) at the cost and expense of the
Issuers.

 

(a)           Subject to
Sections 8.1(c) and 8.2, the Issuers at their option and at any
time may terminate (i) all the obligations of the Issuers and any Note
Guarantor under the Notes, the Note Guarantees and this Indenture (“legal
defeasance option”), and after giving effect to such legal defeasance, any
omission to comply with such obligations shall no longer constitute a Default
or Event of Default or (ii) the obligations of the Issuers and any Note
Guarantor under Sections 3.2, 3.3, 3.4, 3.5, 3.6,
3.7, 3.8, 3.9, 3.10, 3.11, 3.12 and 4.1(a)(3),
(iii) and the Issuers may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant or
provision, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or provision or by reason of any reference in any
such covenant to any other provision herein or in any other document and such
omission to comply with such covenants or provisions shall no longer constitute
a Default or an Event of Default under Sections 6.1(3) (but only as it
relates to an Event of Default as a result of a default under Section
4.1(a)(3)), 6.1(4) and 6.1(5) (“covenant defeasance option”),
but except as specified above, the remainder of this Indenture and the Notes
shall be unaffected thereby. The Issuers may exercise their legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.

 

If the Issuers exercise their legal defeasance option,
payment of the Notes may not be accelerated because of an Event of Default, and
the Note Guarantees in effect at such time shall terminate. If the Issuers
exercise their covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Sections 6.1(3)
(but only as it relates to an Event of Default as a result of a default under Section
4.1(a)(3)), 6.1(4), 6.1(5) (as such section relates to Sections
3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8,
3.9, 3.10, 3.11 and 3.12) 6.1(6), 6.1(7)
(but only with respect to only to a Significant Subsidiary or a group of
Restricted Subsidiaries that would constitute a Significant Subsidiary), 6.1(8)
(but only with respect to only to a Significant Subsidiary or a group of
Restricted Subsidiaries that would constitute a Significant Subsidiary), 6.1(9)
or 6.1(10).

 

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

 

(b)           In the
event that the Issuers exercise their rights under Section 8.1(a) or
their legal defeasance option and notwithstanding the provisions thereof, each
Issuer’s obligations in Sections 2.2, 2.3, 2.4, 2.5,
2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12,
3.1, 3.15, 3.16, 3.17, 3.19, 3.20, 6.7,
7.1, 7.2, 7.7, 7.8, and in this Article VIII
shall survive until the Notes have been paid in full. Thereafter, the Issuers’
and the Note Guarantors’ obligations in Sections 7.7, 8.4 and 8.5
shall survive.

 

SECTION 8.2         Conditions
to Defeasance. The Issuers may exercise their legal defeasance option or
its covenant defeasance option only if:

 

(1)           the
Issuers irrevocably deposit in trust with the Trustee for the benefit of the
Holders money in U.S. dollars or U.S. Government Obligations or a combination
thereof the 

 

95

 

principal of and interest
(without reinvestment) on which shall be sufficient, or a combination thereof sufficient,
for the payment of principal, premium, if any, and interest on the Notes to
redemption or maturity;

 

(2)           the
Issuers deliver 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 shall
provide cash at such times and in such amounts as shall be sufficient to pay
principal, premium, if any, and interest when due on all the Notes to
redemption or maturity;

 

(3)           no Default
or Event of Default shall have occurred and be continuing on the date of such
deposit (other than a Default or Event of Default with respect to this Indenture
resulting from the incurrence of Indebtedness, all or a portion of which shall
be used to defease the Notes concurrently with such incurrence);

 

(4)           such legal
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a Default under this Indenture or any other material agreement or
instrument to which the Issuers or any of its Subsidiaries is a party or by
which the Issuers or any of its Subsidiaries is bound;

 

(5)           the
Issuers shall have each delivered to the Trustee an Opinion of Counsel to the
effect that (A) the Notes and (B) assuming no intervening bankruptcy of the
Issuers between the date of deposit and the 91st day following the deposit and
that no Holder is an insider of the Issuers, after the 91st day following the
deposit, the trust funds shall not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
right generally;

 

(6)           the
deposit does not constitute a default under any other agreement binding on the
Issuers;

 

(7)           the
Issuers each deliver 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;

 

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

 

(9)           in the
case of the covenant defeasance option, the Issuers shall have each delivered
to the Trustee an Opinion of Counsel in the United States to the effect that
the Holders shall not recognize income, gain or loss for federal income tax
purposes as a result of such 

 

96

 

covenant defeasance and
shall 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

 

(10)         the Issuers
each deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent to the defeasance and discharge of
the Notes and this Indenture as contemplated by this Article VIII have
been complied with.

 

SECTION 8.3         Application
of Trust Money. The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to this Article VIII. It shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
of and interest on the Notes.

 

SECTION 8.4         Repayment
to Issuers. Anything herein to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuers from time to time upon Issuers’ Order any
money or U.S. Government Obligations held by it as provided in this Article
VIII which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect legal defeasance or covenant defeasance, as applicable,
provided that the Trustee shall not be required to liquidate any U.S.
Government Obligations in order to comply with the provisions of this
paragraph.

 

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

 

SECTION 8.5         Indemnity
for U.S. Government Obligations. The Issuers 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 8.6         Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with this Article VIII by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
obligations of the Issuers under this Indenture and the Notes shall be revived
and reinstated as though no deposit had occurred pursuant to this Article VIII
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 VII; provided,
however, that, if the Issuers have made any payment of interest on
or principal of any Notes because of the reinstatement of its obligations, the
Issuers shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.

 

97

 

ARTICLE IX

Amendments

 

SECTION 9.1         Without
Consent of Holders. The Issuers, the Note Guarantors and the Trustee may
amend or supplement this Indenture, a Note Guarantee or the Notes without
notice to or consent of any Holder to:

 

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

 

(2)           provide
for the assumption by a successor entity of the obligations of the Company or
any Note Guarantor under this Indenture;

 

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

 

(4)           add
Guarantees with respect to the Notes;

 

(5)           add
collateral to secure the Notes;

 

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

 

(7)           make any
change that does not adversely affect the rights of any Holder;

 

(8)           comply
with any requirement of the SEC in connection with the qualification of this
Indenture under the TIA;

 

(9)           release a
Subsidiary Guarantor from its obligations under its Note Guarantee or this
Indenture in accordance with the applicable provisions of this Indenture;

 

(10)         provide for
the appointment of a successor trustee; provided
that the successor trustee is otherwise qualified and eligible to act as such
under the terms of this Indenture;

 

(11)         provide for
the issuance of the Exchange Notes which shall have terms substantially
identical in all respects to the Notes (except that the transfer restrictions
contained in the Notes shall be modified or eliminated, as appropriate) and
which shall be treated, together with any outstanding Notes, as a single class
of securities; or

 

(12)         conform the
text of this Indenture, the Notes or the Note Guarantees to any provision of
the “Description of notes” section of the Offering Memorandum to the
extent that such provision in the “Description of notes” section of the
Offering Memorandum was intended to be a verbatim recitation of a provision in
this Indenture, the Notes or the Note Guarantees.

 

98

 

After an amendment or supplement under this Section
9.1 becomes effective, the Company shall mail to Holders a notice briefly
describing such amendment or supplement. The failure to give such notice to all
Holders, or any defect therein, shall not impair or affect the validity of an
amendment or supplement under this Section 9.1.

 

SECTION 9.2         With
Consent of Holders. The Issuers, the Note Guarantors and the Trustee may
amend or supplement this Indenture, a Note Guarantee or the Notes without
notice to any Holder but with the written consent of the Holders of at least a
majority in principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes). Any past default or compliance with any provision
of this Indenture, a Note Guarantee or the Notes may be waived with the written
consent of the Holders of a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Notes). However,
without the consent of each Holder affected, an amendment, supplement or waiver
may not (with respect to any Notes held by a non-consenting Holder):

 

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

 

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

 

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

 

(4)           reduce
the premium payable upon the redemption or repurchase of any

 

(5)           Note
or change the time at which any Note may or shall be redeemed or repurchased as
described under Section 3.8 or Article V, whether through an
amendment or waiver of Section 3.8 or Article V, related
definitions or otherwise;

 

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

 

(7)           impair
the right of any Holder to receive payment of principal, premium, if any, and
interest on such Holder’s Notes on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect to such
Holder’s Notes;

 

(8)           make
any change to the amendment provisions which require each Holder’s consent or
to the waiver provisions; or

 

(9)           modify
the Note Guarantees in any manner materially adverse to the Holders.

 

It shall not be necessary for the consent of the
Holders under this Section 9.2 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent approves the
substance thereof. A consent to any amendment or waiver under this Indenture by
any Holder given in connection with a tender of such Holder’s Notes will not be
rendered invalid by such tender. After an amendment or supplement under this Section
9.2 becomes effective, the Company shall mail to Holders a notice briefly
describing such amendment or supplement. The 

 

99

 

failure to give such notice to all Holders, or any defect therein,
shall not impair or affect the validity of an amendment or supplement under
this Section 9.2.

 

SECTION 9.3         Compliance
with Trust Indenture Act. Every amendment or supplement to this Indenture,
a Note Guarantee or the Notes shall comply with the TIA as then in effect.

 

SECTION 9.4         Revocation
and Effect of Consents and Waivers. A consent to an amendment, supplement
or a waiver by a Holder of a Note shall bind the Holder and every subsequent
Holder of that Note or portion of the Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent or waiver is not made
on the Note.

 

Any such Holder or subsequent Holder may revoke the
consent or waiver as to such Holder’s Note or portion of the Note if the
Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective or otherwise in accordance with any
related solicitation documents. After an amendment, supplement or waiver
becomes effective, it shall bind every Holder unless it makes a change
described in any of clauses (1) through (8) of Section 9.2, in
which case the amendment, supplement, waiver or other action shall bind each
Holder who has consented to it and every subsequent Holder that evidences the
same debt as the consenting Holder’s Notes. An amendment, supplement or waiver
shall become effective upon receipt by the Trustee of the requisite number of
written consents under Section 9.1 or 9.2 as applicable.

 

The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders 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
Holders 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 become
valid or effective more than 120 days after such record date.

 

SECTION 9.5         Notation
on or Exchange of Notes. If an amendment, supplement or waiver changes the
terms of a Note, the Trustee may require the Holder of the Note to deliver it
to the Trustee. The Trustee may place an appropriate notation on the Note
regarding the changed terms and return it to the Holder. Alternatively, if the
Issuers or the Trustee so determine, the Issuers, in exchange for the Note,
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment.

 

SECTION 9.6         Trustee
To Sign Amendments. The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article IX if the amendment, supplement or waiver
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 any
amendment, supplement or waiver the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and to receive, and (subject to
Sections 7.1 and 7.2) shall be fully protected in relying upon an Officers’
Certificate and an Opinion of Counsel stating that such amendment, supplement
or waiver is 

 

100

 

authorized or permitted by this Indenture and that such amendment,
supplement or waiver is the legal, valid and binding obligation of the Issuers
and any Note Guarantors, enforceable against them in accordance with its terms,
subject to customary exceptions, and complies with the provisions hereof
(including Section 9.3).

 

ARTICLE X

Note Guarantees

 

SECTION 10.1       Note
Guarantees. The Parent and the Subsidiary Guarantors hereby unconditionally
guarantee, on a senior unsecured basis and as primary obligor and not merely as
surety, jointly and severally with each other Note Guarantor, to each Holder
and the Trustee the full and punctual payment when due, whether at maturity, by
acceleration, by redemption or otherwise, of the principal of, premium, if any,
and interest on the Notes, all other obligations and liabilities of the Issuers
under this Indenture (including without limitation interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Issuers or any Note
Guarantor whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) and any and all costs (including reasonable counsel
fees and expenses) Incurred by the trustee or the Holders in enforcing any
rights under the Note Guarantees (all the foregoing being hereinafter
collectively called the “Obligations”). The Obligations of Note Guarantors
under the Note Guarantee will rank equally in right of payment with other
Indebtedness of such Note Guarantors, except to the extent such other
Indebtedness is expressly subordinated to the obligations arising under the
Note Guarantees. Each Note Guarantor further agrees (to the extent permitted by
law) that the Obligations may be extended or renewed, in whole or in part,
without notice or further assent from it, and that it shall remain bound under
this Article X notwithstanding any extension or renewal of any Obligation.

 

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

 

Each Note Guarantor further agrees that its Note
Guarantee herein constitutes a Note Guarantee of payment when due (and not a
Note Guarantee of collection) and waives any right to require that any resort
be had by any Holder to any security held for payment of the Obligations.

 

The obligations of each Note Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any
reason (other than payment of the 

 

101

 

Obligations in full), 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 Note
Guarantor herein shall not be discharged or impaired or otherwise affected by
the failure of any Holder to assert any claim or demand or to enforce any
remedy under this Indenture, the Notes or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of any Note Guarantor or would otherwise
operate as a discharge of such Note Guarantor as a matter of law or equity.

 

Each Note Guarantor agrees that its Note Guarantee
herein shall remain in full force and effect until payment in full of all the
Obligations or such Note Guarantor is released from its Note Guarantee upon the
merger or the sale of all the Capital Stock or assets of the Note Guarantor in
compliance with Section 10.2 or otherwise in accordance with the terms
of this Indenture. Each Note Guarantor further agrees that its Note 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 of
the Obligations is rescinded or must otherwise be restored by any Holder 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 has at law or in equity against any Note
Guarantor by virtue hereof, upon the failure of the Company to pay any of the
Obligations when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, each Note 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 an amount equal to the sum of (i) the
unpaid amount of such Obligations then due and owing and (ii) accrued and
unpaid interest on such Obligations then due and owing (but only to the extent
not prohibited by law).

 

Each Note Guarantor further agrees that, as between
such Note Guarantor, on the one hand, and the Holders, on the other hand, (x)
the maturity of the Obligations guaranteed hereby may be accelerated as
provided in this Indenture for the purposes of its Note Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby and (y) in the event
of any such declaration of acceleration of such Obligations, such Obligations
(whether or not due and payable) shall forthwith become due and payable by the
Note Guarantor for the purposes of this Note Guarantee.

 

Each Note Guarantor also agrees to pay any and all
reasonable costs and expenses (including reasonable attorneys’ fees) incurred
by the Trustee or the Holders in enforcing any rights under this Section
10.1.

 

SECTION 10.2       Limitation
on Liability; Termination, Release and Discharge.

 

(a)           The obligations
of each Subsidiary Guarantor hereunder shall be limited to the maximum amount
as shall, after giving effect to all other contingent and fixed liabilities of 

 

102

 

such Subsidiary Guarantor
(including, without limitation, any guarantees under the Senior Secured Credit
Agreement) and after giving effect to any collections from or payments made by
or on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Note Guarantee or pursuant to its
contribution obligations under this Indenture, result in the obligations of
such Subsidiary Guarantor under its Note Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law and not
otherwise being void or voidable under any similar laws affecting the rights of
creditors generally.

 

(b)           In the
event a Subsidiary Guarantor is sold or disposed of (whether by merger,
consolidation, the sale of its Capital Stock or the sale of all or
substantially all of its assets (other than by lease)) and whether or not the
Subsidiary Guarantor is the surviving corporation in such transaction to a
Person which is not Parent or a Subsidiary of Parent, such Subsidiary Guarantor
shall be released (without any further action on the part of any Person) from
all its obligations under this Indenture, its Note Guarantee and the
Registration Rights Agreement if: (1) the sale or other disposition is in
compliance with this Indenture, including Section 3.8 and Article IV;
and (2) all the obligations of such Subsidiary Guarantor under all Credit
Facilities and related documentation and any other agreements relating to any
other Indebtedness of the Company or its Restricted Subsidiaries terminate upon
consummation of such transaction.

 

(c)           Each Note
Guarantor shall be deemed released from all its obligations under this
Indenture, its Note Guarantee and the Registration Rights Agreement and such
Note Guarantee shall terminate upon the satisfaction and discharge of this
Indenture or upon the legal defeasance of the Notes, in each case, pursuant to
the provisions of Article VIII hereof.

 

(d)           A
Subsidiary Guarantor shall be deemed released from all of its obligations under
this Indenture, its Note Guarantee and the Registration Rights Agreement and
such Note Guarantee shall terminate if the Company designates such Subsidiary
Guarantor as an Unrestricted Subsidiary and such designation complies with the
applicable provisions of this Indenture.

 

SECTION 10.3       Right
of Contribution. Each Note Guarantor hereby agrees that to the extent that
any Note Guarantor shall have paid more than its proportionate share of any
payment made on the obligations under the Note Guarantees, such Note Guarantor
shall be entitled to seek and receive contribution from and against the Issuers
or any other Note Guarantor who has not paid its proportionate share of such
payment. The provisions of this Section 10.3 shall in no respect limit the
obligations and liabilities of each Note Guarantor to the Trustee and the
Holders, and each Note Guarantor shall remain liable to the Trustee and the
Holders for the full amount guaranteed by such Note Guarantor hereunder.

 

SECTION 10.4       No
Subrogation. Notwithstanding any payment or payments made by Note Guarantor
hereunder, no Note Guarantor shall be entitled to be subrogated to any of the
rights of the Trustee or any Holder against the Issuers or any other Note
Guarantor or any collateral security or guarantee or right of offset held by
the Trustee or any Holder for the payment of the Obligations, nor shall any
Note Guarantor seek or be entitled to seek any contribution or reimbursement
from the Issuers or any other Note Guarantor in respect of 

 

103

 

payments made by such Note Guarantor hereunder, until all amounts owing
to the Trustee and the Holders by the Issuers on account of the Obligations are
paid in full. If any amount shall be paid to any Note Guarantor on account of
such subrogation rights at any time when all of the Obligations shall not have
been paid in full, such amount shall be held by such Note Guarantor in trust
for the Trustee and the Holders, segregated from other funds of such Note
Guarantor, and shall, forthwith upon receipt by such Note Guarantor, be turned
over to the Trustee in the exact form received by such Note Guarantor (duly
indorsed by such Note Guarantor to the Trustee, if required), to be applied
against the Obligations.

 

ARTICLE XI

Miscellaneous

 

SECTION 11.1       Trust
Indenture Act Controls. If any provision of this Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Indenture by the TIA, the provision required by the TIA shall control.

 

SECTION 11.2       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 Issuers:

 

Festival Fun Parks, LLC

Palace Finance, Inc.

4590 MacArthur Boulevard,

Suite 400,

Newport Beach, CA 92660

Attention: John Cora

Facsimile No.: (949) 261-1414

 

if to the Trustee:

 

Wells Fargo Bank, N.A.

Corporate Trust Services

Sixth and Marquette

Mac N9303-120

Minneapolis, MN 55479

Attention: Lynn M. Steiner

Facsimile No.: (612) 316-4305

 

The Issuers 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 Holder shall
be mailed to the Holder at the Holder’s address as it appears on the Note
Register and shall be sufficiently given if so mailed within the time
prescribed.

 

104

 

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

 

SECTION 11.3       Communication
by Holders with other Holders. Holders may communicate pursuant to TIA §
312(b) with other Holders with respect to their rights under this Indenture or
the Notes. The Issuers, the Trustee, the Registrar and anyone else shall have
the protection of TIA § 312(c).

 

SECTION 11.4       Certificate
and Opinion as to Conditions Precedent. Upon any request or application by
the Issuers to the Trustee to take or refrain from taking any action under this
Indenture, except upon the initial issuance of Notes hereunder, the Issuers
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 11.5       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.

 

In giving such Opinion of Counsel, counsel may rely as
to factual matters on an Officers’ Certificate or on certificates of public
officials.

 

SECTION 11.6       When
Notes Disregarded. In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent, Notes
owned by the Issuers or by any of their Affiliates (except that, for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes which a Responsible Officer of
the Trustee actually knows are so owned)

 

105

 

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

 

SECTION 11.7       Rules
by Trustee, Paying Agent and Registrar. The Trustee may make reasonable
rules for action by, or a meeting of, Holders. The Registrar and the Paying
Agent may make reasonable rules for their functions.

 

SECTION 11.8       Legal
Holidays. A “Legal Holiday” is a Saturday, a Sunday or other day on which
commercial banking institutions are authorized or required to be closed in New
York City. 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 11.9       Governing
Law. This Indenture, the Note Guarantees and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.

 

SECTION 11.10     No
Recourse Against Others. An incorporator, director, officer, employee,
stockholder or controlling person, as such, of the Issuers shall not have any
liability for any obligations of the Issuers under the Notes or the Note
Guarantees or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Note, each Holder
shall waive and release all such liability. The waiver and release shall be
part of the consideration for the issue of the Notes.

 

SECTION 11.11     Successors.
All agreements of the Issuers in this Indenture and the Notes shall bind their
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.

 

SECTION 11.12     Multiple
Originals. The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.

 

SECTION 11.13     Variable
Provisions. The Issuers initially appoint the Trustee as Paying Agent and
Registrar and custodian with respect to any Global Notes.

 

SECTION 11.14     Qualification
of Indenture. The Issuers shall qualify this Indenture under the TIA in
accordance with the terms and conditions of the Registration Rights Agreement
and shall pay all reasonable costs and expenses (including attorneys’ fees and
expenses for the Issuers and the Trustee) incurred in connection therewith,
including, but not limited to, costs and expenses of qualification of this
Indenture and the Notes and printing this Indenture and the Notes. The Trustee
shall be entitled to receive from the Issuers any such Officers’ Certificates,
Opinions of Counsel or other documentation as it may reasonably request in connection
with any such qualification of this Indenture under the TIA.

 

SECTION 11.15     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.

 

106

 

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

 

	
   

  	
  FESTIVAL FUN PARKS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
   

  	
  Name: John A. Cora

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer and President

  

 

	
   

  	
  PALACE FINANCE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
   

  	
  Name: John A. Cora

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer and President

  

 

	
   

  	
  PALACE ENTERTAINMENT
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
   

  	
  Name: John A. Cora

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer and President

  

 

 

	
   

  	
  SPLISH SPLASH AT
  ADVENTURELAND INC.

  FAMILY FUN CENTER HOLDINGS LLC

  SMARTPARKS – SAN JOSE INC.

  SMARTPARKS – RIVERSIDE INC.

  SMARTPARKS – SAN DIMAS INC.

  RAGING WATERS GROUP INC. WET ‘N WILD

  NEVADA INC.SMARTPARKS – CAROLINA

  INC. SMARTPARKS – FLORIDA INC.

  SMARTPARKS – SILVER SPRINGS INC.

  PALACE MANAGEMENT COMPANY LLC

  

 

 

	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
  Title: President

  

 

 

	
   

  	
  WELLS FARGO BANK, N.A.,
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jane Y. Schweiger

  	
   

  
	
   

  	
   

  	
  Name: Jane Y. Schweiger

  
	
   

  	
   

  	
  Title: Vice PresidentExhibit 4.2

 

REGISTRATION
RIGHTS AGREEMENT

 

 

This REGISTRATION RIGHTS AGREEMENT dated April 12,
2006 (the “Agreement”) is entered into by and among Festival Fun Parks, LLC, a
Delaware limited liability company (the “Company”), Palace Finance, Inc., a
Delaware corporation (“Palace Finance,” and together with the Company, the
“Issuers”), Palace Entertainment Holdings, Inc., a Delaware corporation
(“Holdings”), the other guarantors listed in
Schedule 1 hereto (the “Subsidiary Guarantors,” and, together with Holdings,
the “Guarantors”), and J.P. Morgan Securities Inc. (“JPMorgan”) and Jefferies
& Company, Inc. (together with JPMorgan, the “Initial Purchasers”).

 

The Issuers the Guarantors and the Initial Purchasers
are parties to the Purchase Agreement dated March 29, 2006 (the “Purchase
Agreement”), which provides for the sale by the Issuers to the Initial
Purchasers of $150,000,000 aggregate principal amount of the Issuers’ 10 7/8%
Senior Notes due 2014 (the “Securities”) which will be guaranteed on an unsecured
senior basis by each of the Guarantors. 
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement, the Issuers and the Guarantors have agreed to provide to the Initial
Purchasers and their direct and indirect transferees the registration rights
set forth in this Agreement.  The
execution and delivery of this Agreement is a condition to the closing under
the Purchase Agreement.

 

In consideration of the foregoing, the parties hereto
agree as follows:

 

1.             Definitions.  As used in this Agreement, the following
terms shall have the following meanings:

 

“Additional Guarantor” shall
mean any subsidiary of the Company that executes a Guarantee under the
Indenture after the date of this Agreement.

 

“Business Day” shall mean any
day that is not a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to remain closed.

 

“Company” shall have the meaning set forth in the
preamble and shall also include the Company’s successors.

 

“Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended from time to time.

 

“Exchange Dates” shall have the meaning set forth in
Section 2(a)(ii) hereof.

 

 

“Exchange
Offer” shall mean the exchange offer by the Issuers and the Guarantors of
Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.

 

“Exchange Offer Registration” shall mean a
registration under the Securities Act effected pursuant to Section 2(a) hereof.

 

“Exchange Offer Registration Statement” shall mean an
exchange offer registration statement on Form S-4 (or, if applicable, on
another appropriate form) and all amendments and supplements to such
registration statement, in each case including the Prospectus contained therein
or deemed a part thereof, all exhibits thereto and any document incorporated by
reference therein.

 

“Exchange Securities” shall mean senior notes issued
by the Issuers and guaranteed by the Guarantors under the Indenture containing
terms identical to the Securities (except that the Exchange Securities will not
be subject to restrictions on transfer or to any increase in annual interest
rate for failure to comply with this Agreement) and to be offered to Holders of
Securities in exchange for Securities pursuant to the Exchange Offer.

 

“Free Writing Prospectus” means each free writing
prospectus (as defined in Rule 405 under the Securities Act) prepared by or on
behalf of the Issuers or used or referred to by the Issuers in connection with
the sale of the Securities.

 

“Guarantors” shall have the meaning set forth in the
preamble and shall also include any Guarantor’s successors and any Additional
Guarantors.

 

“Guarantees” shall mean the guarantees of the
Securities and Exchange Securities by the Guarantors under the Indenture.

 

“Holders” shall mean the Initial Purchasers, for so
long as they own any Registrable Securities, and each of their successors,
assigns and direct and indirect transferees who become owners of Registrable
Securities under the Indenture; provided that for purposes of Sections 4 and 5
of this Agreement, the term “Holders” shall include Participating
Broker-Dealers.

 

“Indemnified Person” shall have the meaning set forth
in Section 5(c) hereof.

 

“Indemnifying Person” shall have the meaning set forth
in Section 5(c) hereof.

 

“Indenture” shall mean the Indenture relating to the
Securities dated as of April 12, 2006 among the Issuers, the Guarantors and
Wells Fargo Bank, N.A., 

 

 

2

 

as trustee, and as the same may be amended from time to time in
accordance with the terms thereof.

 

“Initial Purchasers” shall have the meaning set forth
in the preamble.

 

“Inspector” shall have the meaning set forth in
Section 3(a)(xiv) hereof.

 

                “Issuer
Information” shall have the meaning set forth in Section 5(a) hereof.

 

                “Issuers” shall
have the meaning set forth in the preamble.

 

“JPMorgan” shall have the meaning set forth in the
preamble.

 

“Majority Holders” shall mean the Holders of a
majority of the aggregate principal amount of the outstanding Registrable
Securities; provided that whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder, any
Registrable Securities owned directly or indirectly by the Issuers or any of
their affiliates shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage or amount; and
provided, further, that if the Issuer shall issue any additional Securities
under the Indenture prior to consummation of the Exchange Offer or, if
applicable, the effectiveness of any Shelf Registration Statement, such
additional Securities and the Registrable Securities to which this Agreement
relates shall be treated together as one class for purposes of determining
whether the consent or approval of Holders of a specified percentage of
Registrable Securities has been obtained.

 

“Participating Broker-Dealers” shall have the meaning
set forth in Section 4(a) hereof.

 

“Person” shall mean an individual, partnership,
limited liability company, corporation, trust or unincorporated organization,
or a government or agency or political subdivision thereof.

 

“Prospectus” shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to such prospectus, and in each case
including any document incorporated by reference therein.

 

“Purchase Agreement” shall have the meaning set forth
in the preamble.

 

3

 

“Registrable Securities” shall mean the Securities;
provided that the Securities shall cease to be Registrable Securities (i) when
a Registration Statement with respect to such Securities has become effective
under the Securities Act and such Securities have been exchanged or disposed of
pursuant to such Registration Statement, (ii) when such Securities are eligible
to be sold pursuant to Rule 144(k) (or any similar provision then in force, but
not Rule 144A) under the Securities Act or (iii) when such Securities cease to
be outstanding.

 

“Registration Expenses” shall mean any and all
expenses incident to performance of or compliance by the Issuers and the
Guarantors with this Agreement, including without limitation: (i) all SEC,
stock exchange or National Association of Securities Dealers, Inc. registration
and filing fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable fees
and disbursements of counsel for any Underwriters or Holders in connection with
blue sky qualification of any Exchange Securities or Registrable Securities),
(iii) all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any
Prospectus, any Free Writing Prospectus and any amendments or supplements
thereto, any underwriting agreements, securities sales agreements or other
similar agreements and any other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) all fees and
disbursements relating to the qualification of the Indenture under applicable
securities laws, (vi) the fees and disbursements of the Trustee and its
counsel, (vii) the fees and disbursements of counsel for the Issuers and the
Guarantors and, in the case of a Shelf Registration Statement, the fees and
disbursements of one counsel for the Holders (which counsel shall be selected
by the Majority Holders and which counsel may also be counsel for the Initial
Purchasers) and (viii) the fees and disbursements of the independent public
accountants of the Issuers and the Guarantors, including the expenses of any
special audits or “comfort” letters required by or incident to the performance
of and compliance with this Agreement, but excluding fees and expenses of
counsel to the Underwriters (other than fees and expenses set forth in clause
(ii) above) or the Holders and underwriting discounts and commissions,
brokerage commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by a Holder.

 

“Registration Statement” shall mean any registration
statement of the Issuers and the Guarantors that covers any of the Exchange
Securities or Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein or deemed a part thereof, all exhibits thereto and
any document incorporated by reference therein.

 

4

 

“SEC” shall mean the United States Securities and
Exchange Commission.

 

“Securities” shall have the meaning set forth in the
preamble.

 

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

 

“Shelf Additional Interest Date” shall have the
meaning set forth in Section 2(d) hereof.

 

“Shelf Effectiveness Period” shall have the meaning
set forth in Section 2(b) hereof.

 

“Shelf Registration” shall mean a registration
effected pursuant to Section 2(b) hereof.

 

“Shelf Registration Statement” shall mean a “shelf”
registration statement of the Issuers and the Guarantors that covers all or a
portion of the Registrable Securities (but no other securities unless approved
by a majority of the Holders whose Registrable Securities are to be covered by
such Shelf Registration Statement) on an appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein or deemed a part thereof, all exhibits thereto and any document
incorporated by reference therein.

 

“Shelf Request” shall have the meaning set forth in
Section 2(b) hereof.

 

“Staff” shall mean the staff of the SEC.

 

“Target Registration Date” shall have the meaning set
forth in Section 2(d) hereof.

 

“Trust Indenture Act” shall mean the Trust Indenture
Act of 1939, as amended from time to time.

 

“Trustee” shall mean the trustee with respect to the
Securities under the Indenture.

 

“Underwriter” shall have the meaning set forth in
Section 3(e) hereof.

 

“Underwritten Offering” shall mean an offering in
which Registrable Securities are sold to an Underwriter for reoffering to the
public.

 

5

 

2.             Registration
Under the Securities Act.  (a)  To the extent not prohibited by any
applicable law or applicable interpretations of the Staff, the Issuers and the
Guarantors shall use their commercially reasonable efforts  to (i) cause to be filed an Exchange Offer
Registration Statement covering an offer to the Holders to exchange all the
Registrable Securities for Exchange Securities and (ii) have such Registration Statement
remain effective until 180 days after the last Exchange Date for use by one or
more Participating Broker-Dealers.  The
Issuers and the Guarantors shall commence the Exchange Offer promptly after the
Exchange Offer Registration Statement is declared effective by the SEC and use
their commercially reasonable efforts to complete the Exchange Offer not later
than 30 days after such effective date.

 

The Issuers and the Guarantors shall commence the
Exchange Offer by mailing the related Prospectus, appropriate letters of
transmittal and other accompanying documents to each Holder stating, in
addition to such other disclosures as are required by applicable law,
substantially the following:

 

(i)                                     that the Exchange Offer is being made
pursuant to this Agreement and that all Registrable Securities validly tendered
and not properly withdrawn will be accepted for exchange;

 

(ii)                                  the dates of acceptance for exchange
(which shall be a period of at least 20 Business Days from the date such notice
is mailed) (the “Exchange Dates”);

 

(iii)                               that any Registrable Security not
tendered will remain outstanding and continue to accrue interest but will not
retain any rights under this Agreement, except as otherwise specified herein;

 

(iv)                              that any Holder electing to have a Registrable
Security exchanged pursuant to the Exchange Offer will be required to (A)
surrender such Registrable Security, together with the appropriate letters of
transmittal, to the institution and at the address (located in the Borough of
Manhattan, The City of New York) and in the manner specified in the notice, or
(B) effect such exchange otherwise in compliance with the applicable
procedures of the depositary for such Registrable Security, in each case prior
to the close of business on the last Exchange Date; and

 

(v)                                 that any Holder will be entitled to
withdraw its election, not later than the close of business on the last
Exchange Date, by (A) sending to the institution and at the address (located in
the Borough of Manhattan, The City of New York) specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Registrable Securities delivered for
exchange and a statement that such Holder is withdrawing its election to have
such Securities 

 

6

 

exchanged or (B)
effecting such withdrawal in compliance with the applicable procedures of the
depositary for the Registrable Securities.

 

As a condition to participating in the Exchange Offer, a
Holder will be required to represent to the Issuers and the Guarantors that (i)
any Exchange Securities to be received by it will be acquired in the ordinary
course of its business, (ii) at the time of the commencement of the Exchange
Offer it has no arrangement or understanding with any Person to participate in
the distribution (within the meaning of the Securities Act) of the Exchange
Securities in violation of the provisions of the Securities Act, (iii) it is
not an “affiliate” (within the meaning of Rule 405 under the Securities Act) of
any of the Issuers or any Guarantor and (iv) if such Holder is a broker-dealer
that will receive Exchange Securities for its own account in exchange for
Registrable Securities that were acquired as a result of market-making or other
trading activities, then such Holder will deliver a Prospectus (or, to the
extent permitted by law, make available a Prospectus to purchasers) in
connection with any resale of such Exchange Securities.

 

As soon as practicable after the last Exchange Date,
the Issuers and the Guarantors shall:

 

(i)                                     accept for exchange Registrable
Securities or portions thereof validly tendered and not properly withdrawn
pursuant to the Exchange Offer; and

 

(ii)                                  deliver, or cause to be delivered, to the
Trustee for cancellation all Registrable Securities or portions thereof so
accepted for exchange by the Issuers and issue, and cause the Trustee to
promptly authenticate and deliver to each Holder, Exchange Securities equal in
principal amount to the principal amount of the Registrable Securities tendered
by such Holder.

 

The Issuers and the Guarantors shall use their
commercially reasonable efforts to complete the Exchange Offer as provided
above and shall comply with the applicable requirements of the Securities Act,
the Exchange Act and other applicable laws and regulations in connection with
the Exchange Offer.  The Exchange Offer
shall not be subject to any conditions, other than that the Exchange Offer does
not violate any applicable law or applicable interpretations of the Staff.

 

(b)           In
the event that (i) the Issuers and the Guarantors determine that the Exchange
Offer Registration provided for in Section 2(a) above is not available or may
not be completed as soon as practicable after the last Exchange Date because it
would violate any applicable law or applicable interpretations of the Staff,
(ii) the Exchange Offer is not for any other reason completed by April 7, 2007
or (iii) upon receipt of a written request (a “Shelf Request”) from any Initial
Purchaser representing that it holds Registrable Securities that are or were 

 

7

 

ineligible to be exchanged in the Exchange Offer, the Issuers and the
Guarantors shall use their commercially reasonable efforts to cause to be filed
as soon as practicable after such determination, date or Shelf Request, as the
case may be, a Shelf Registration Statement providing for the sale of all the
Registrable Securities by the Holders thereof and to have such Shelf
Registration Statement become effective.

 

In the event that the Issuers and the Guarantors are
required to file a Shelf Registration Statement pursuant to clause (iii) of the
preceding sentence, the Issuers and the Guarantors shall use their commercially
reasonable efforts to file and have become effective both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all Registrable
Securities and a Shelf Registration Statement (which may be a combined
Registration Statement with the Exchange Offer Registration Statement) with
respect to offers and sales of Registrable Securities held by the Initial
Purchasers after completion of the Exchange Offer.

 

The Issuers and the Guarantors agree to use their
commercially reasonable efforts to keep the Shelf Registration Statement
continuously effective until the expiration of the period referred to in Rule
144(k) (or any similar rule then in force, but not Rule 144A) under the
Securities Act with respect to the Registrable Securities or such shorter period
that will terminate when all the Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement (the “Shelf Effectiveness Period”). 
The Issuers and the Guarantors further agree to supplement or amend the
Shelf Registration Statement, the related Prospectus and any Free Writing
Prospectus if required by the rules, regulations or instructions applicable to
the registration form used by the Issuers for such Shelf Registration Statement
or by the Securities Act or by any other rules and regulations thereunder or if
reasonably requested by a Holder of Registrable Securities with respect to
information relating to such Holder, and to use their commercially reasonable
efforts to cause any such amendment to become effective, if required, and such
Shelf Registration Statement, Prospectus or Free Writing Prospectus, as the
case may be, to become usable as soon as thereafter practicable.  The Issuers and the Guarantors agree to
furnish to the Holders of Registrable Securities copies of any such supplement
or amendment promptly after its being used or filed with the SEC.

 

(c)           The
Issuers and the Guarantors shall pay all Registration Expenses in connection
with any registration pursuant to Section 2(a) or Section 2(b) hereof.  Each Holder shall pay all underwriting
discounts and commissions, brokerage commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder’s Registrable Securities
pursuant to the Shelf Registration Statement.

 

8

 

(d)           An
Exchange Offer Registration Statement pursuant to Section 2(a) hereof will not
be deemed to have become effective unless it has been declared effective by the
SEC.  A Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC or is automatically effective
upon filing with the SEC as provided by Rule 462 under the Securities Act.

 

In the event that either the Exchange Offer is not
completed or the Shelf Registration Statement, if required pursuant to Section
2(b)(i) or 2(b)(ii) hereof, does not become effective on or prior to April 7,
2007 (the “Target Registration Date”), the interest rate on the Registrable
Securities will be increased by 1.00% per annum until the Exchange Offer is
completed or the Shelf Registration Statement, if required hereby, becomes
effective or the Securities become freely tradable under the Securities Act.  In the event that the Issuers receive a Shelf
Request pursuant to Section 2(b)(iii), and the Shelf Registration Statement
required to be filed thereby does not become effective by the later of (x)
September 9, 2006 or (y) 90 days after the delivery of such Shelf Request (such
later date, the “Shelf Additional Interest Date”), then the interest rate on
the Registrable Securities will be increased by 1.00% per annum until the Shelf
Registration Statement becomes effective or the Securities become freely
tradable under the Securities Act.

 

                If the Shelf
Registration Statement, if required hereby, has become effective and thereafter
either ceases to be effective or the Prospectus contained therein ceases to be
usable, in each case whether or not permitted by this Agreement, at any time
during the Shelf Effectiveness Period, and such failure to remain effective or
usable exists for more than any consecutive 30 day period or an aggregate of 90
days (whether or not consecutive) in any 12-month period, then the interest
rate on the Registrable Securities will be increased by 1.00% per annum
commencing on the 31st day or the 91st day, as the case
may be, in such 12-month period and ending on such date that the Shelf
Registration Statement has again become effective or the Prospectus again becomes
usable.

 

(e)           Without
limiting the remedies available to the Initial Purchasers and the Holders, the
Issuers and the Guarantors acknowledge that any failure by the Issuers or the
Guarantors to comply with their obligations under Section 2(a) and Section 2(b)
hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Issuers’ and the
Guarantors’ obligations under Section 2(a) and Section 2(b) hereof.

 

3.             Registration
Procedures.  (a) In connection with
their obligations pursuant to Section 2(a) and Section 2(b) hereof, the Issuers
and the Guarantors shall as promptly as possible:

 

9

 

(i)            prepare
and file with the SEC a Registration Statement on the appropriate form under
the Securities Act, which form (x) shall be selected by the Issuers and the
Guarantors, (y) shall, in the case of a Shelf Registration, be available for
the sale of the Registrable Securities by the Holders thereof and (z) shall
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to be
filed therewith; and use their commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective for the
applicable period in accordance with Section 2 hereof;

 

(ii)           prepare
and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement
effective for the applicable period in accordance with Section 2 hereof and
cause each Prospectus to be supplemented by any required prospectus supplement
and, as so supplemented, to be filed pursuant to Rule 424 under the Securities
Act; and keep each Prospectus current during the period described in Section
4(3) of and Rule 174 under the Securities Act that is applicable to
transactions by brokers or dealers with respect to the Registrable Securities
or Exchange Securities;

 

(iii)          to
the extent any Free Writing Prospectus is used, file with the SEC any Free
Writing Prospectus that is required to be filed by the Company or the
Guarantors with the SEC in accordance with the Securities Act and to retain any
Free Writing Prospectus not required to be filed;

 

(iv)          in
the case of a Shelf Registration, furnish to each Holder of Registrable
Securities, to counsel for the Initial Purchasers, to counsel for such Holders
and to each Underwriter of an Underwritten Offering of Registrable Securities,
if any, without charge, as many copies of each Prospectus, preliminary
prospectus or Free Writing Prospectus, and any amendment or supplement thereto,
as such Holder, counsel or Underwriter may reasonably request in order to
facilitate the sale or other disposition of the Registrable Securities
thereunder; and the Issuers and the Guarantors consent to the use of such
Prospectus, preliminary prospectus or such Free Writing Prospectus and any
amendment or supplement thereto in accordance with applicable law by each of
the Holders of Registrable Securities and any such Underwriters in connection
with the offering and sale of the Registrable Securities covered by and in the
manner described in such Prospectus, preliminary prospectus or such Free Writing Prospectus or any amendment or supplement
thereto in accordance with applicable law;

 

(v)           use
their commercially reasonable efforts to register or qualify the Registrable
Securities under all applicable state securities or blue sky laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement shall reasonably request in writing by the time the 

 

10

 

applicable Registration Statement becomes effective; cooperate with
such Holders in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; and do any and all other acts
and things that may be reasonably necessary to enable each Holder to complete
the disposition in each such jurisdiction of the Registrable Securities owned
by such Holder; provided that neither of the Issuers nor any Guarantor
shall be required to (1) qualify as a foreign corporation or other entity or as
a dealer in securities in any such jurisdiction where it would not otherwise be
required to so qualify, (2) file any general consent to service of process in
any such jurisdiction or (3) subject itself to taxation in any such
jurisdiction if it is not so subject;

 

(vi)          notify
counsel for the Initial Purchasers and, in the case of a Shelf Registration,
notify each Holder of Registrable Securities and counsel for such Holders as
promptly as practicable and, if requested by any such Holder or counsel,
confirm such advice in writing (1) when a Registration Statement has become
effective, when any post-effective amendment thereto has been filed and becomes
effective, when any Free Writing Prospectus has been filed or any amendment or
supplement to the Prospectus or any Free Writing Prospectus has been filed, (2)
of any request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement, Prospectus or any Free Writing
Prospectus or for additional information after the Registration Statement has
become effective, (3) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, including the
receipt by the Issuers of any notice of objection of the SEC to the use of a
Shelf Registration Statement or any post-effective amendment thereto pursuant
to Rule 401(g)(2) under the Securities Act, (4) if, between the applicable
effective date of a Shelf Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and warranties of
any the Issuers or the Guarantors contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating to an
offering of such Registrable Securities cease to be true and correct in all
material respects or if any of the Issuers or the Guarantors receives any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, (5) of the happening of any event during the
period a Shelf Registration Statement is effective that makes any statement
made in such Shelf Registration Statement or the related Prospectus or any Free
Writing Prospectus untrue in any material respect or that requires the making
of any changes in such Shelf Registration Statement or Prospectus or any Free
Writing Prospectus in order to make the statements therein not misleading and
(6) of any determination by the Issuers or any Guarantor that a post-effective
amendment to a Registration Statement or any amendment or supplement to the
Prospectus or any Free Writing Prospectus would be appropriate;

 

11

 

(vii)         use
their commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or, in the case of a
Shelf Registration, the resolution of any objection of the SEC pursuant to Rule
401(g)(2), including by filing an amendment to such Shelf Registration
Statement on the proper form, at the earliest possible moment and provide
immediate notice to each Holder of the withdrawal of any such order or such
resolution;

 

(viii)        in
the case of a Shelf Registration, furnish to each Holder of Registrable Securities,
without charge, at least one conformed copy of each Registration Statement and
any post-effective amendment thereto (without any documents incorporated
therein by reference or exhibits thereto, unless requested);

 

(ix)           in
the case of a Shelf Registration, cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends and enable such Registrable Securities to be issued in such
denominations and registered in such names (consistent with the provisions of
the Indenture) as such Holders may reasonably request at least one Business Day
prior to the closing of any sale of Registrable Securities;

 

(x)            in
the case of a Shelf Registration, upon the occurrence of any event contemplated
by Section 3(a)(vi)(5) hereof, use their commercially reasonable efforts to
prepare and file with the SEC a supplement or post-effective amendment to such
Shelf Registration Statement or the related Prospectus or any Free Writing
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered (or, to the extent permitted
by law, made available) to purchasers of the Registrable Securities, such
Prospectus or Free Writing Prospectus, as the case may be, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and the Issuers and the Guarantors shall notify
the Holders of Registrable Securities to suspend use of the Prospectus or any
Free Writing Prospectus as promptly as practicable after the occurrence of such
an event, and such Holders hereby agree to suspend use of the Prospectus or any
Free Writing Prospectus, as the case may be, until the Issuers and the
Guarantors have amended or supplemented the Prospectus or the Free Writing
Prospectus, as the case may be, to correct such misstatement or omission;

 

(xi)           a
reasonable time prior to the filing of any Registration Statement, any
Prospectus, any Free Writing Prospectus, any amendment to a Registration
Statement or amendment or supplement to a Prospectus or a Free Writing Prospectus
or of any document that is to be incorporated by reference into a Registration
Statement, a Prospectus or a Free Writing Prospectus after initial 

 

12

 

filing of a Registration Statement, provide copies of such document to
the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, to the Holders of Registrable Securities and their
counsel) and make such of the representatives of the Issuers and the Guarantors
as shall be reasonably requested by the Initial Purchasers or their counsel
(and, in the case of a Shelf Registration Statement, the Holders of Registrable
Securities or their counsel) available for discussion of such document; and the
Issuers and the Guarantors shall not, at any time after initial filing of a
Registration Statement, use or file any Prospectus, any Free Writing
Prospectus, any amendment of or supplement to a Registration Statement or a
Prospectus or a Free Writing Prospectus, or any document that is to be
incorporated by reference into a Registration Statement, a Prospectus or a Free
Writing Prospectus, of which the Initial Purchasers and their counsel (and, in
the case of a Shelf Registration Statement, the Holders of Registrable
Securities and their counsel) shall not have previously been advised and
furnished a copy or to which the Initial Purchasers or their counsel (and, in
the case of a Shelf Registration Statement, the Holders of Registrable
Securities or their counsel) shall object;

 

(xii)          obtain
a CUSIP number for all Exchange Securities or Registrable Securities, as the
case may be, not later than the initial effective date of a Registration
Statement;

 

(xiii)         cause
the Indenture to be qualified under the Trust Indenture Act in connection with
the registration of the Exchange Securities or Registrable Securities, as the
case may be; cooperate with the Trustee and the Holders to effect such changes
to the Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the Trust Indenture Act; and execute, and use
their commercially reasonable efforts  to
cause the Trustee to execute, all documents as may be required to effect such
changes and all other forms and documents required to be filed with the SEC to
enable the Indenture to be so qualified in a timely manner;

 

(xiv)        in
the case of a Shelf Registration, make available for inspection by a
representative of the Holders of the Registrable Securities (an “Inspector”),
any Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, any attorneys and accountants designated by a majority
of the Holders of Registrable Securities to be included in such Shelf
Registration and any attorneys and accountants designated by such Underwriter,
at reasonable times and in a reasonable manner, all pertinent financial and
other records, documents and properties of the Issuers and their subsidiaries,
and cause the respective officers, directors and employees of the Issuers and
the Guarantors to supply all information reasonably requested by any such
Inspector, Underwriter, attorney or accountant in connection with a Shelf
Registration Statement; provided that if any such information is identified by
the Issuers or any Guarantor as being confidential or proprietary, each Person
receiving such information shall take such actions as are reasonably necessary
to protect the confidentiality of 

 

13

 

such information to the extent such action is
otherwise not inconsistent with, an impairment of or in derogation of the
rights and interests of any Inspector, Holder or Underwriter);

 

(xv)         in
the case of a Shelf Registration, use their commercially reasonable efforts to
cause all Registrable Securities to be listed on any securities exchange or any
automated quotation system on which similar securities issued or guaranteed by
the Issuers or any Guarantor are then listed if requested by the Majority
Holders, to the extent such Registrable Securities satisfy applicable listing
requirements;

 

(xvi)        if
reasonably requested by any Holder of Registrable Securities covered by a Shelf
Registration Statement, as promptly as practicable, include in a Prospectus
supplement or post-effective amendment such information with respect to such
Holder as such Holder reasonably requests to be included therein and make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as the Issuers have received notification of the matters to be so
included in such filing;

 

(xvii)       in
the case of a Shelf Registration, enter into such customary agreements and take
all such other actions in connection therewith (including those requested by
the Holders of a majority in principal amount of the Registrable Securities covered
by the Shelf Registration Statement) in order to expedite or facilitate the
disposition of such Registrable Securities including, but not limited to, an
Underwritten Offering and in such connection, (1) to the extent possible, make
such representations and warranties to the Holders and any Underwriters of such
Registrable Securities with respect to the business of the Issuers and their
subsidiaries and the Registration Statement, Prospectus, any Free Writing
Prospectus and documents incorporated by reference or deemed incorporated by
reference, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings and
confirm the same if and when requested, (2) obtain opinions of counsel to the Issuers
and the Guarantors (which counsel and opinions, in form, scope and substance,
shall be reasonably satisfactory to the Holders and such Underwriters and their
respective counsel) addressed to each selling Holder and Underwriter of
Registrable Securities, covering the matters customarily covered in opinions
requested in underwritten offerings, (3) obtain “comfort” letters from the
independent certified public accountants of the Issuers and the Guarantors
(and, if necessary, any other certified public accountant of any subsidiary of
the Issuers or any Guarantor, or of any business acquired by the Issuers or any
Guarantor for which financial statements and financial data are or are required
to be included in the Registration Statement) addressed to each selling Holder
(to the extent permitted by applicable professional standards) and Underwriter
of Registrable Securities, such letters to be in customary form and covering
matters of the type customarily covered in “comfort” letters in connection with
underwritten offerings, including but not limited to financial information
contained 

 

14

 

in any preliminary prospectus, Prospectus or Free Writing Prospectus
and (4) deliver such documents and certificates as may be reasonably requested
by the Holders of a majority in principal amount of the Registrable Securities
being sold or the Underwriters, and which are customarily delivered in
underwritten offerings, to evidence the continued validity of the representations
and warranties of the Issuers and the Guarantors made pursuant to clause (1)
above and to evidence compliance with any customary conditions contained in an
underwriting agreement; and

 

(xviii)      so
long as any Registrable Securities remain outstanding, cause each Additional
Guarantor upon the creation or acquisition by the Issuers of such Additional
Guarantor, to execute a counterpart to this Agreement in the form attached
hereto as Annex A and to deliver such counterpart, together with an opinion of
counsel as to the enforceability thereof against such entity, to the Initial
Purchasers no later than five Business Days following the execution thereof.

 

(b)           In
the case of a Shelf Registration Statement, the Issuers may require each Holder
of Registrable Securities to furnish to the Issuers such information regarding
such Holder and the proposed disposition by such Holder of such Registrable
Securities as the Issuers and the Guarantors may from time to time reasonably
request in writing.

 

(c)           In
the case of a Shelf Registration Statement, each Holder of Registrable
Securities covered in such Shelf Registration Statement agrees that, upon
receipt of any notice from the Issuers and the Guarantors of the happening of
any event of the kind described in Section 3(a)(vi)(3) or 3(a)(vi)(5) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to the Shelf Registration Statement until such Holder’s receipt of the
copies of the supplemented or amended Prospectus and any Free Writing
Prospectus contemplated by Section 3(a)(x) hereof and, if so directed by the
Issuers and the Guarantors, such Holder will deliver to the Issuers and the
Guarantors all copies in its possession, other than permanent file copies then
in such Holder’s possession, of the Prospectus and any Free Writing Prospectus covering such Registrable Securities that is current at the
time of receipt of such notice.

 

(d)           If
the Issuers and the Guarantors shall give any notice pursuant to Section 3(c)
hereof to suspend the disposition of Registrable Securities pursuant to a Shelf
Registration Statement, the Issuers and the Guarantors shall extend the period
during which such Shelf Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice to and including the date when
the Holders of such Registrable Securities shall have received copies of the
supplemented or amended Prospectus or any Free Writing Prospectus necessary to
resume such dispositions. The Issuers and the Guarantors may give any such
notice only twice during any 365-day period and any such 

 

15

 

suspensions shall not exceed 30 days for each suspension and there
shall not be more than two suspensions in effect during any 365-day period.

 

(e)           The
Holders of Registrable Securities covered by a Shelf Registration Statement who
desire to do so may sell such Registrable Securities in an Underwritten
Offering.  In any such Underwritten
Offering, the investment bank or investment banks and manager or managers (each
an “Underwriter”) that will administer the offering will be selected by the
Holders of a majority in principal amount of the Registrable Securities included
in such offering.

 

4.             Participation
of Broker-Dealers in Exchange Offer. 
(a)  The Staff has taken the
position that any broker-dealer that receives Exchange Securities for its own
account in the Exchange Offer in exchange for Securities that were acquired by
such broker-dealer as a result of market-making or other trading activities (a
“Participating Broker-Dealer”) may be deemed to be an “underwriter” within the
meaning of the Securities Act and must deliver a prospectus  meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Securities.

 

The Issuers and the Guarantors understand that it is
the Staff’s position that if the Prospectus contained in the Exchange Offer
Registration Statement includes a plan of distribution containing a statement
to the above effect and the means by which Participating Broker-Dealers may
resell the Exchange Securities, without naming the Participating Broker-Dealers
or specifying the amount of Exchange Securities owned by them, such Prospectus
may be delivered by Participating Broker-Dealers (or,
to the extent permitted by law, made available to purchasers) to satisfy their prospectus delivery
obligation under the Securities Act in connection with resales of Exchange
Securities for their own accounts, so long as the Prospectus otherwise meets
the requirements of the Securities Act.

 

(b)           In
light of the above, and notwithstanding the other provisions of this Agreement,
the Issuers and the Guarantors agree to amend or supplement the Prospectus
contained in the Exchange Offer Registration Statement for a period of up to
180 days after the last Exchange Date, if requested by the Initial Purchasers
or by one or more Participating Broker-Dealers, in order to expedite or
facilitate the disposition of any Exchange Securities by Participating
Broker-Dealers consistent with the positions of the Staff recited in Section
4(a) above.  The Issuers and the
Guarantors further agree that Participating Broker-Dealers shall be authorized
to deliver such Prospectus (or, to the extent permitted by law, make available)
during such period in connection with the resales contemplated by this Section
4.

 

(c)           The
Initial Purchasers shall have no liability to the Issuers, any Guarantor or any
Holder with respect to any request that they may make pursuant to Section 4(b)
above.

 

16

 

5.             Indemnification
and Contribution.  (a)  Each of the Issuers and the Guarantors,
jointly and severally, agree to indemnify and hold harmless each Initial
Purchaser and each Holder, their respective affiliates, directors and officers
and each Person, if any, who controls any Initial Purchaser or any Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), joint or several, that arise
out of, or are based upon, (1) any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or (2) any
untrue statement or alleged untrue statement of a material fact contained in
any Prospectus, any Free Writing Prospectus or any “issuer information”
(“Issuer Information”) filed or required to be filed pursuant to Rule 433(d)
under the Securities Act, or any omission or alleged omission to state therein
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, in each case
except insofar as such losses, claims, damages or liabilities arise out of, or
are based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser or information relating to any Holder furnished to the
Issuers in writing by or on behalf of such Initial Purchaser or any selling
Holder, respectively, expressly for use therein.  In connection with any Underwritten Offering
permitted by Section 3, the Issuers and the Guarantors, jointly and severally,
will also indemnify the Underwriters, if any, selling brokers, dealers and
similar securities industry professionals participating in the distribution, their
respective affiliates and each Person who controls such Persons (within the
meaning of the Securities Act and the Exchange Act) to the same extent as
provided above with respect to the indemnification of the Holders, if requested
in connection with any Registration Statement, any Prospectus, any Free Writing
Prospectus or any Issuer Information.

 

                (b)           Each Holder agrees, severally and not
jointly, to indemnify and hold harmless the Issuers, the Guarantors, the
Initial Purchasers and the other selling Holders, the directors of the Issuers
and the Guarantors, each officer of the Issuers and the Guarantors who signed
the Registration Statement and each Person, if any, who controls the Issuers,
the Guarantors, any Initial Purchaser and any other selling Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
to the same extent as the indemnity set forth in paragraph (a) above, but only
with respect to any losses, claims, damages or liabilities that arise out of,
or are based upon, any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with any information
relating to such Holder furnished to the Issuers 

 

17

 

in writing by such Holder expressly for use in any Registration
Statement, any Prospectus and any Free Writing Prospectus.

 

                (c)           If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any Person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such Person (the
“Indemnified Person”) shall promptly notify the Person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve
it from any liability that it may have under this Section 6 except to the
extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided, further,
that the failure to notify the Indemnifying Person shall not relieve it from
any liability that it may have to an Indemnified Person otherwise than under
this Section 5.  If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall
retain counsel reasonably satisfactory to the Indemnified Person to represent
the Indemnified Person and any others entitled to indemnification pursuant to
this Section 5 that the Indemnifying Person may designate in such proceeding
and shall pay the fees and expenses of such proceeding and shall pay the fees
and expenses of such counsel related to such proceeding, as incurred.  In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary; (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to
those available to the Indemnifying Person; or (iv) the named parties in any
such proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them.  It is understood
and agreed that the Indemnifying Person shall not, in connection with any proceeding
or related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Indemnified Persons, and that all such fees and expenses shall be
reimbursed as they are incurred.  Any
such separate firm (x) for any Initial Purchaser, its affiliates, directors and
officers and any control Persons of such Initial Purchaser shall be designated
in writing by JPMorgan, (y) for any Holder, its directors and officers and any
control Persons of such Holder shall be designated in writing by the Majority
Holders and (z) in all other cases shall be designated in writing by the
Issuers.  The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and 

 

18

 

against any loss or liability by reason of such settlement or
judgment.  Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested that an
Indemnifying Person reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by this paragraph, the Indemnifying Person shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by the Indemnifying Person of such request and (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement. 
No Indemnifying Person shall, without the written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (A) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to or any admission
of fault, culpability or a failure to act by or on behalf of any Indemnified
Person.

 

                (d)           If the indemnification provided for
in paragraphs (a) and (b) above is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Issuers and the Guarantors from the offering
of the Securities and the Exchange Securities, on the one hand, and by the
Holders from receiving Securities or Exchange Securities registered under the
Securities Act, on the other hand, or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Issuers and the Guarantors on the one hand and the
Holders on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations.  The
relative fault of the Issuers and the Guarantors on the one hand and the
Holders on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by
the Issuers and the Guarantors or by the Holders and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

 

                (e)           The Issuers, the Guarantors and the
Holders agree that it would not be just and equitable if contribution pursuant
to this Section 5 were determined by pro  rata allocation (even if
the Holders were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the 

 

19

 

equitable considerations referred to in paragraph (d) above.  The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to
in paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses incurred by such Indemnified
Person in connection with any such action or claim.  Notwithstanding the provisions of this
Section 5, in no event shall a Holder be required to contribute any amount in
excess of the amount by which the total
price at which the Securities or Exchange Securities sold by such Holder exceeds
the amount of any damages that such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.  The
Holders’ obligations to contribute pursuant to this Section 5 are several and
not joint.

 

(f)            The
remedies provided for in this Section 5 are not exclusive and shall not limit
any rights or remedies that may otherwise be available to any Indemnified
Person at law or in equity.

 

(g)           The
indemnity and contribution provisions contained in this Section 5 shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of the Initial
Purchasers or any Holder or any Person controlling any Initial Purchaser or any
Holder, or by or on behalf of the Issuers or the Guarantors or the officers or
directors of or any Person controlling the Issuers or the Guarantors, (iii)
acceptance of any of the Exchange Securities and (iv) any sale of Registrable
Securities pursuant to a Shelf Registration Statement.

 

6.             General.

 

(a)           No Inconsistent Agreements.   The Issuers and the Guarantors represent,
warrant and agree that (i) the rights granted to the Holders hereunder do not
in any way conflict with and are not inconsistent with the rights granted to
the holders of any other outstanding securities issued or guaranteed by the
Issuers or any Guarantor under any other agreement and (ii) neither the Issuers
nor any Guarantor has entered into, or on or after the date of this Agreement
will enter into, any agreement that is inconsistent with the rights granted to
the Holders of Registrable Securities in this Agreement or otherwise conflicts
with the provisions hereof.

 

(b)           Amendments and Waivers.   The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Issuers and the Guarantors have obtained the written consent
of Holders of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, 

 

20

 

modification, supplement, waiver or consent; provided that no
amendment, modification, supplement, waiver or consent to any departure from
the provisions of Section 5 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder.  Any amendments, modifications, supplements,
waivers or consents pursuant to this Section 6(b) shall be by a writing
executed by each of the parties hereto.

 

(c)           Notices.  All notices
and other communications provided for or permitted hereunder shall be made in
writing by hand-delivery, registered first-class mail, telex, telecopier, or
any courier guaranteeing overnight delivery (i) if to a Holder, at the most
current address given by such Holder to the Issuers by means of a notice given
in accordance with the provisions of this Section 6(c), which address initially
is, with respect to the Initial Purchasers, the address set forth in the
Purchase Agreement; (ii) if to the Issuers and the Guarantors, initially at the
Issuers’ address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions of this
Section 6(c); and (iii) to such other persons at their respective addresses as
provided in the Purchase Agreement and thereafter at such other address, notice
of which is given in accordance with the provisions of this Section 6(c).  All such notices and communications shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged,
if telecopied; and on the next Business Day if timely delivered to an air
courier guaranteeing overnight delivery. 
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.

 

(d)           Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture.  If any transferee of any
Holder shall acquire Registrable Securities in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all
the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof.  The Initial Purchasers (in their capacity as
Initial Purchasers) shall have no liability or obligation to the Issuers or the
Guarantors with respect to any failure by a Holder to comply with, or any
breach by any Holder of, any of the obligations of such Holder under this
Agreement.

 

21

 

(e)           Third Party Beneficiaries. 
Each Holder shall be a third party beneficiary to the agreements made
hereunder between the Issuers and the Guarantors, on the one hand, and the
Initial Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of other Holders hereunder.

 

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

 

(g)           Headings.  The
headings in this Agreement are for convenience of reference only, are not a
part of this Agreement and shall not limit or otherwise affect the meaning
hereof.

 

(h)           Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

 

(j)            Entire Agreement; Severability.  This
Agreement contains the entire agreement between the parties relating to the
subject matter hereof and supersedes all oral statements and prior writings
with respect thereto.  If any term,
provision, covenant or restriction contained in this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable or against
public policy, the remainder of the terms, provisions, covenants and
restrictions contained herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. 
The Issuers, the Guarantors and the Initial Purchasers shall endeavor in
good faith negotiations to replace the invalid, void or unenforceable
provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, void or unenforceable provisions.

 

22

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.

 

	
   

  	
   

  	
  FESTIVAL FUN PARKS, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
  and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PALACE FINANCE, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
  and President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PALACE
  ENTERTAINMENT

  HOLDINGS, INC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
  and President

  	
   

  

 

23

 

 

	
   

  	
   

  	
  SPLISH SPLASH AT

  
	
   

  	
   

  	
  ADVENTURELAND INC.

  
	
   

  	
   

  	
  FAMILY FUN CENTER HOLDINGS LLC

  
	
   

  	
   

  	
  SMARTPARKS — SAN JOSE INC.

  
	
   

  	
   

  	
  SMARTPARKS — RIVERSIDE INC.

  
	
   

  	
   

  	
  SMARTPARKS — SAN DIMAS INC.

  
	
   

  	
   

  	
  RAGING WATERS GROUP INC.

  
	
   

  	
   

  	
  WET ‘N WILD NEVADA INC.

  
	
   

  	
   

  	
  SMARTPARKS — CAROLINA INC.

  
	
   

  	
   

  	
  SMARTPARKS — FLORIDA INC.

  
	
   

  	
   

  	
  SMARTPARKS — SILVER SPRINGS INC.

  
	
   

  	
   

  	
  PALACE MANAGEMENT COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  

 

 

 

 

 

 

Confirmed and accepted as of the date first above written:

 

J.P. MORGAN SECURITIES INC.

 

For itself and on behalf of the

 several Initial Purchasers

 

 

 

	
  By

  	
  /s/ [Illegible]

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  

 

24

 

Annex A

Counterpart to Registration
Rights Agreement

 

The undersigned hereby absolutely,
unconditionally and irrevocably agrees as a Guarantor (as defined in the
Registration Rights Agreement, dated as of April 12, 2006 by and among the
Festival Fun Parks, LLC, a Delaware limited liability company, Palace Finance,
Inc., a Delaware corporation, Palace Entertainment Holdings, Inc., a Delaware
corporation, the other guarantors party thereto
and J.P. Morgan Securities Inc., on behalf of itself and the other Initial
Purchasers) to be bound by the terms and provisions of such Registration Rights
Agreement.

 

 

IN WITNESS WHEREOF, the undersigned has
executed this counterpart as of                          .

 

	
   

  	
  [NAME]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  NAME:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule
1

Guarantors

Palace Entertainment
Holdings Inc., a Delaware corporation;

Splish Splash at
Adventureland Inc., a New York corporation;

Family Fun Center Holdings
LLC; a Delaware limited liability company;

Smartparks — San Jose Inc.,
a Delaware corporation;

Smartparks — Riverside Inc.,
a Delaware corporation;

Smartparks — San Dimas Inc.,
a Delaware corporation;

Raging Waters Group Inc., a
California corporation;

Wet ‘N Wild Nevada Inc., a
Nevada corporation;

Smartparks — Carolina Inc.,
a Delaware corporation;

Smartparks — Florida Inc., a
Delaware corporation;

Smartparks — Silver Springs
Inc., a Delaware corporation;

Palace Management Company
LLC, a Delaware limited liability company

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]