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Exhibit 10.20    
    

LICENSE
AGREEMENT 

Effective
as of August 16, 2004

RE: Harvard Cases # 1960, 2210, 2288, 2360, 2361 

In
consideration of the mutual promises and covenants set forth below, the parties hereto, the President and Fellows of Harvard College, a charitable corporation of the Commonwealth of Massachusetts
("HARVARD") with a business address of 25 Shattuck Street, Boston, MA 02115 and Sirtris Pharmaceuticals, Inc. ("LICENSEE"), a Delaware Corporation with a business address of 1000 Winter Street,
Suite 3350, Waltham, MA 02451, agree as follows: 

ARTICLE
I

DEFINITIONS 

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

	1.1
	ACADEMIC
RESEARCH PURPOSES: use of PATENT RIGHTS and/or KNOW-HOW for academic research or other not-for-profit scholarly purposes which are
undertaken at a non-profit or governmental institution that does not use the PATENT RIGHTS and/or KNOW-HOW in the production or manufacture of products for sale or the
performance of services for a fee.

	1.2
	AFFILIATE:
any entity which controls, is controlled by, or is under common control with a party by ownership or control of at least fifty percent (50%) of the voting stock or other
ownership. Unless otherwise specified, the term LICENSEE includes AFFILIATES.

	1.3
	FIELD:
All fields excluding ACADEMIC RESEARCH PURPOSES and HARVARD ACADEMIC RESEARCH PURPOSES.

	1.4
	HARVARD:
President and Fellows of Harvard College, a charitable corporation having an office at the Office of Technology Licensing and Industry Sponsored Research, Harvard Medical
School, 25 Shattuck Street, Suite 414, Boston, MA, 02115.

	1.5
	HARVARD
ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS and/or KNOW-HOW for academic research or other not-for-profit scholarly purposes which are
undertaken at HARVARD that does not use the PATENT RIGHTS and/or KNOW-HOW in the production or manufacture of products for sale or the performance of services for a fee.

	1.6
	NON-EXCLUSIVE
KNOW-HOW: All confidential technology proprietary to HARVARD, whether patentable or not, discovered, invented or developed during the course of
performing research in the laboratory of David Sinclair directly related to any patent application or patent included in the PATENT RIGHTS and which is necessary or useful for the manufacture, use or
sale of any product covered by any such patent application or patent that HARVARD is in possession of as of the date of this Agreement.

	1.7
	EXCLUSIVE
KNOW-HOW: All confidential technology including tangible materials proprietary to HARVARD whether patentable or not, to the extent owned or controlled by HARVARD
that is discovered, invented or developed during the course of performing research in David Sinclair's laboratory and that directly relates to the discovery, characterization or uses of a serum
factor(s) whose presence or absence mediates the biological effects of calorie restriction in animals.

	1.8
	KNOW-HOW
means EXCLUSIVE KNOW-HOW and NON-EXCLUSIVE KNOW-HOW.

	1.9
	LICENSED
PROCESSES: the processes covered by PATENT RIGHTS or processes utilizing KNOW-HOW or some portion thereof. 

[*]  =  Portions
of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed
separately with the Commission. 

	1.10
	LICENSED
KNOW-HOW PRODUCTS: products or processes, the development, manufacture, use or sale of which utilizes the EXCLUSIVE KNOW-HOW; provided that, if any
such product or process is included within the definition of a LICENSED PATENT PRODUCT, such product or process shall be deemed to be a LICENSED PATENT PRODUCT and not a LICENSED KNOW-HOW
PRODUCT.

	1.11
	LICENSED
PATENT PRODUCTS: products or processes the manufacture, use or sale of which in the absence of a license from HARVARD, would infringe a VALID CLAIM of the PATENT RIGHTS.

	1.12
	LICENSED
PRODUCTS: LICENSED KNOW-HOW PRODUCTS and LICENSED PATENT PRODUCTS.

	1.13
	LICENSEE:
Sirtris Pharmaceuticals Inc., a corporation organized under the laws of Delaware having its principal offices at 1000 Winter Street, Suite 3350, Waltham, MA 02451.

	1.14
	NET
SALES: the amount billed, invoiced or received (whichever occurs first) for sales, leases, or other transfers of LICENSED PRODUCTS by LICENSEE or its AFFILIATES, less:

	(a)
	customary
trade, quantity or cash discounts and non-affiliated brokers' or agents' commissions actually allowed and taken;

	(b)
	amounts
repaid or credited by reason of rejection or return;

	(c)
	to
the extent separately stated on purchase orders, invoices, or other documents of sale, taxes levied on and/or other governmental charges made as to production, sale,
transportation, delivery or use and paid by or on behalf of LICENSEE or AFFILIATES; and

	(d)
	reasonable
charges for delivery or transportation provided by third parties, if separately stated. 

NET
SALES also includes the fair market value of any non-cash consideration received by LICENSEE or AFFILIATES for the sale, lease, or transfer of LICENSED PRODUCTS. 

In
the event a LICENSED PRODUCT is sold as a COMBINATION PRODUCT as defined below, NET SALES of the COMBINATION PRODUCT will be calculated by multiplying the NET SALES of the COMBINATION PRODUCT by
the fraction A/(A+B), where A is the gross invoice price of the LICENSED PRODUCT when sold separately and B is the gross invoice price of the other product(s) included in the COMBINATION PRODUCT when
sold separately. In the event that there have been no separate sales of a LICENSED PRODUCT but there have been separate sales of all of the other product(s) in the COMBINATION PRODUCT, NET SALES shall
be the difference between the gross selling price of the COMBINATION PRODUCT and that of the other product(s). In the event that not all of the other product(s) included in a COMBINATION PRODUCT have
had separate sales, NET SALES will be calculated by multiplying the NET SALES of the COMBINATION PRODUCT by the fraction C/(C+D), where C is the fully burdened manufacturing cost of the LICENSED
PRODUCT and D is the fully burdened manufacturing cost of the other product(s) contained in the COMBINATION PRODUCT, such cost being calculated in accordance with U.S. generally accepted accounting
principles. As used above, the term "COMBINATION PRODUCT" means any product that comprises a LICENSED PRODUCT and other therapeutically or diagnostically active compounds or ingredients, or components
of a delivery system, that are not LICENSED PRODUCTS. 

	1.15
	SUBLICENSE
INCOME: (a) Royalty payments made to LICENSEE for sale of LICENSED PRODUCT by sublicensees, and (b) sublicense issue fees, sublicense maintenance fees,
sublicense milestone payments, any premiums in excess of market value for equity investments in LICENSEE made by any sublicensee and similar non-royalty payments made by sublicensees to
LICENSEE on. account of sublicenses pursuant to this Agreement; provided that, in either case, SUBLICENSE INCOME shall only include such payments to the extent that they relate
specifically to the grant of a sublicense of the rights hereunder and shall not include any payments not described above 

and
shall specifically exclude payments made in connection with or as reimbursement for research and development, patent prosecution and maintenance, and marketing; sales or promotion activities. 

	1.16
	PATENT
RIGHTS: The patents and patent applications described on Exhibit A hereto, as such  Exhibit A may be amended pursuant to Section 7.3 hereof,
as well as, for all such patents and patent applications, the inventions
described and claimed therein, and any divisions or continuations, continuations-in-part (to the extent the claims are directed to subject matter specifically described in such
patents or patent applications or are dominated by the claims of the existing PATENT RIGHTS or relate to EXCLUSIVE KNOW-HOW), patents issuing thereon or reissues thereof, and any and all
foreign patents and patent applications corresponding thereto, all to the extent owned or controlled by HARVARD. In the event that separate patent application(s) not included in the foregoing are
filed covering EXCLUSIVE KNOW-HOW pursuant to Section 7.3, such applications, the inventions described and claimed therein, and any divisions or continuations,
continuations-in-part (to the extent the claims are directed to subject matter specifically described in such patents or patent applications or are dominated by the claims of
the existing PATENT RIGHTS), patents issuing thereon or reissues thereof, and any and all foreign patents and patent applications corresponding thereto shall be included in HARVARD Case Number 2361
and shall be included in PATENT RIGHTS. The parties agree that the relative valuation of the PATENT RIGHTS corresponding to the case numbers listed in Exhibit A are as follows unless modified
per Section 7.3. The parties agree that the relative valuation of the PATENT RIGHTS corresponding to the case numbers listed in Exhibit A are as follows: 

	Case No.
 
	 	Relative Valuation (%)

	1960	 	10
	2210	 	30
	2288	 	25
	2360	 	10
	2361	 	25
	 	 	

	Total	 	100

	1.17
	TERRITORY:
Worldwide.

	1.18
	THERAPEUTIC
AREA: The therapeutic areas listed on Exhibit B hereto.

	1.19
	VALID
CLAIM: a pending or issued and unexpired claim of the PATENT RIGHTS that shall not have been irrevocably abandoned or declared invalid in an unappealable decision of a court or
other authority of competent jurisdiction; provided that, any pending claim shall not be considered a VALID CLAIM if it is not be prosecuted in good faith by HARVARD or if it has not been issued
within five (5) years after the first filing thereof and provided further, that any pending claim that issues more than 5 years after the first filing thereof shall thereafter be
considered a VALID CLAIM upon. such issuance subject to and in accordance with this Section.

	1.20
	The
terms "Public Law 96-517" and "Public Law 98-620" include all amendments to those statutes.

	1.21
	The
terms "sold" and "sell" include, without limitation, leases and other transfers and similar transactions. 

ARTICLE
II

REPRESENTATIONS 

	2.1
	HARVARD
is the owner of the entire right, title and interest in U.S. patent applications corresponding to HARVARD Case Numbers 1960, 2360, 2361 described in  Exhibit A hereto, in the foreign patent
applications corresponding thereto, and in the inventions described and claimed therein and in the
KNOW-HOW. HARVARD and the Massachusetts General Hospital ("MGH") are co-owners of entire right, title and interest in U.S. patent applications corresponding to HARVARD Case
Number 2288 described in Exhibit A hereto, in the foreign patent applications corresponding thereto, and in the inventions described and claimed
therein, and have entered into 

an
interinstitutional agreement that provides HARVARD the right to license MGH's right, title and interest in such patent applications and inventions. HARVARD is the owner of an equal undivided share
along with BIOMOL International L.P. (and any successor entity) ("BIOMOL"), of the right, title and interest in the U.S. patent applications corresponding to HARVARD Case Numbers 2210
described in Exhibit A hereto. 

	2.2
	HARVARD
has the authority to issue the licenses under PATENT RIGHTS and the KNOW-HOW as set forth in this Agreement and limited per the Sections of this Article II.

	2.3
	HARVARD
is committed to the policy that ideas or creative works produced at HARVARD should be used for the greatest possible public benefit, and believes that every reasonable
incentive should be provided for the prompt introduction of such ideas into public use, all in a manner consistent with the public interest.

	2.4
	LICENSEE
intends to diligently develop the PATENT RIGHTS and EXCLUSIVE KNOW-HOW and to bring products to market which are subject to this Agreement.

	2.5
	LICENSEE
is desirous of obtaining an exclusive license in the TERRITORY and in the FIELD in order to practice the above-referenced invention covered by PATENT RIGHTS and EXCLUSIVE
KNOW-HOW, and to manufacture, use and sell in the commercial market the products made in accordance therewith. 

ARTICLE
III

GRANT OF RIGHTS 

	3.1
	HARVARD
hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions hereof, in the TERRITORY and in the FIELD:

	(a)
	an
exclusive commercial license under PATENT RIGHTS,

	(b)
	an
exclusive commercial license under the EXCLUSIVE KNOW-HOW, and

	(c)
	a
non-exclusive license under the NON-EXCLUSIVE KNOW-HOW 

to
make and have made, to use and have used, to sell and have sold the LICENSED PRODUCTS, and to practice the LICENSED PROCESSES. Such licenses shall include the right to grant sublicenses subject to
HARVARD's approval, such approval not to be unreasonably withheld, and provided that sublicensees shall not further sublicense without HARVARD's approval, not to be unreasonably withheld. In order to
provide LICENSEE with commercial exclusivity for so long as the license under PATENT RIGHTS and EXCLUSIVE KNOW-HOW remains exclusive, HARVARD agrees that it will not grant licenses under
PATENT RIGHTS and EXCLUSIVE KNOW-HOW to others in the FIELD except as required by HARVARD's obligations in Section 3.2(a) or as permitted in Section 3.2(b) and that it will
not disclose EXCLUSIVE KNOW-HOW to others for any commercial purpose in the FIELD, 

	3.2
	The
granting and exercise of this license is subject to the following conditions:

	(a)
	HARVARD's
"Statement of Policy in Regard to Inventions, Patents and Copyrights," dated August 10, 1998, the provisions of Public Law 96-517, Public Law
98-620 and HARVARD's obligations under agreements with sponsors of research. Any right granted in this Agreement greater than that permitted under Public Law 96-517, or Public
Law 98-620, shall be subject to modification as may be required to conform to the provisions of those statutes.

	(b)
	HARVARD
reserves the right within the FIELD to

	(i)
	make
and use for HARVARD ACADEMIC RESEARCH PURPOSES the subject matter described and claimed in PATENT RIGHTS and EXCLUSIVE KNOW-HOW; and

	(ii)
	grant
to other non-profit institutions non-exclusive licenses to make and use for ACADEMIC RESEARCH PURPOSES the subject matter described and
claimed in PATENT RIGHTS and EXCLUSIVE KNOW-HOW; provided that HARVARD shall 

promptly
notify LICENSEE of the identity of any licensee to which a license is granted by HARVARD under this clause. 

	(c)
	LICENSEE
shall use diligent efforts to effect introduction of the LICENSED PRODUCTS into the commercial market as soon as practicable, consistent with sound and reasonable business
practice and judgment; thereafter, until the expiration of this Agreement, LICENSEE shall endeavor to keep LICENSED PRODUCTS reasonably available to the public.

	(d)
	At
any time after five (5) years from the effective date of this Agreement, HARVARD may render this license non-exclusive or terminate this license if, in HARVARD's
reasonable judgment, the Progress Reports furnished by LICENSEE per Article 5.1 do not demonstrate that LICENSEE or its sublicensees:

	(i)
	have
put the licensed subject matter into commercial use in the country or countries hereby licensed, directly or through a sublicense, and is keeping the licensed
subject matter reasonably available to the public; or

	(ii)
	are
engaged in research, development, manufacturing, marketing or sublicensing activity appropriate to achieving 3.2(d)(i). 

Before
rendering this license non-exclusive or terminating it, HARVARD will provide LICENSEE with written notice and permit LICENSEE 60 days to submit any missing or revised
Progress Reports. In the event that LICENSEE objects to HARVARD's determination as to LICENSEE's compliance with (i) or (ii) above, the parties shall attempt to resolve such disagreement
for a period of not less than thirty (30) days. If at the end of such 30-day period, the parties have not reach agreement, the matter shall be submitted to binding arbitration in
Boston, MA before a single arbitrator in accordance with the rules of the American Arbitration Association. HARVARD shall not be permitted to render this license non-exclusive nor
terminate this license during the period of any such dispute. 

	(e)
	In
all sublicenses or sub-sublicenses granted by LICENSEE or any sublicense hereunder, LICENSEE shall include a requirement that the sublicensee use efforts consistent
with those required to be used by LICENSEE hereunder to bring the subject matter of the sublicense into commercial use as quickly as is reasonably possible to the extent required hereunder. LICENSEE
shall further provide in such sublicenses that such sublicenses are subject and subordinate to the applicable terms and conditions of this Agreement. Copies of all sublicense agreements shall be
provided promptly to HARVARD; provided that, LICENSEE may redact such sublicense agreements to omit confidential portions of such sublicense agreements (but shall not redact any such agreement so as
to prevent HARVARD from confirming compliance by LICENSEE hereunder or reasonably exercise its rights under Article 3.1 to approve such sublicenses).

	(f)
	If,
following the fourth (4th) anniversary of the Effective Date, LICENSEE is unable or unwilling to grant sublicenses outside the field of human therapeutics,
diagnostics or vaccines, either as suggested by HARVARD or by a potential sublicensee or otherwise, then HARVARD may directly license such potential sublicensee unless, in HARVARD's reasonable
judgment, such license would be contrary to sound and reasonable business practice and the granting of such license would not materially increase the availability to the public of LICENSED PRODUCTS,
in which event the FIELD definition in this Agreement shall be modified as appropriate to enable HARVARD to grant such license.

	(g)
	During
the period of exclusivity of this license in the United States, LICENSEE shall cause any LICENSED PRODUCT produced for sale in the United States to be manufactured
substantially in the United States unless a waiver is obtained from the U.S. National Institutes of Health.

	3.3
	All
rights reserved to the United States Government and others under Public Law 96-517, and Public Law 98-620, shall remain and shall in no way be affected by
this Agreement. 

	3.4
	The
provisions of this Article 3 and other provisions of this Agreement relevant to LICENSEE's obligations and HARVARD's rights under this Article 3 shall apply
individually to each HARVARD case listed in Exhibit A and the corresponding patents, patent applications and KNOW-HOW. As an
illustration without limiting the applicability of the foregoing, HARVARD shall have the right per Article 3(d) to render non-exclusive or terminate the license under any individual
group of PATENT RIGHTS corresponding to a particular HARVARD Case Number without affecting LICENSEE's rights under other licensed PATENT RIGHTS. 

ARTICLE
IV

PAYMENTS 

	4.1	 	(a)	 	LICENSEE shall pay to HARVARD a non-refundable license issue fee in the sum of One Hundred Thousand dollars ($100,000) within fifteen (15) business days following the execution of this Agreement
	

 	
 	

(b)	
 	

Within fifteen days following the execution of this Agreement, LICENSEE shall reimburse HARVARD for all patent costs accrued through the Effective Date relating to PATENT RIGHTS pursuant to Article VII below.
	

4.2	
 	

(a)	
 	

LICENSEE shall pay to HARVARD for the applicable period specified herein a royalty of (i) [*] of NET SALES by LICENSEE of LICENSED PATENT PRODUCTS and (ii) [*] of NET SALES by LICENSEE or any sublicensee of LICENSED KNOW-HOW
PRODUCTS.
	

 	
 	

(b)	
 	

If the license pursuant to this Agreement is converted to. a non-exclusive, all payments due to HARVARD pursuant to Sections 4.2 through 4.6 shall be reduced to the lesser of (i) [*] of the amount of the payment otherwise due and (ii) the
corresponding payment to be paid by other licensees under other non-exclusive licenses, if any, granted by HARVARD in the same field and territory.
	

 	
 	

(c)	
 	

On sales between LICENSEE and its AFFILIATES for resale, the royalty shall be paid on the NET SALES of the AFFILIATE.

	4.3
	No
later than each of the anniversaries of the effective date of this Agreement specified below, LICENSEE shall pay to HARVARD a non-refundable license maintenance royalty
and/or advance on royalties equal to the amount for the applicable anniversary specified below. Such payments may be credited against running royalties due for that calendar year and Royalty Reports
shall reflect such a credit. Such payments shall not be credited against milestone payments (if any) nor against royalties due for any subsequent calendar year. 

	Anniversary
 
	 	Amount

	2nd Anniversary through 5th Anniversary	 	$	25,000
	6th Anniversary through 10th Anniversary	 	$	50,000
	11th Anniversary and thereafter	 	$	75,000

	4.4
	LICENSEE
shall also pay HARVARD the amount specified below within fifteen (15) days of the first occurrence of each of the events specified below. 

	Event
 
	 	Amount

	A. Initiation of the first clinical trial of a LICENSED PATENT PRODUCT	 	[*]
	

B. Filing of a New Drug Application with the United States Food and Drug Administration (or the equivalent in Japan or with the EMEA) for a LICENSED PATENT PRODUCT	
 	

[*]
	

C. Receipt of marketing approval (including, to the extent applicable, pricing approval) from the United States Food and Drug Administration, the EMEA or the equivalent Japan regulatory authority for a LICENSED PATENT PRODUCT	
 	

[*]
	

D. First commercial sale following receipt of marketing approval in the United States, Japan or any of France, Germany, Italy, Spain or the United Kingdom of a LICENSED PATENT PRODUCT	
 	

[*]

        In
addition to the payments described above, LICENSEE shall also pay to HARVARD an amount equal to [*] of the amounts set forth above in this Section within
fifteen (15) days of the occurrence of each of the events described in this Section with respect to a LICENSED KNOW-HOW PRODUCT. 

        Notwithstanding
anything else contained herein, (a) the first two milestone payments described above shall only be paid with respect to the first occurrence of each such event
with respect to a LICENSED PATENT PRODUCT or LICENSED KNOW-HOW PRODUCT and not with respect to any subsequent event with respect to any other LICENSED PRODUCT, and (b) the last two
milestone payments described above shall be paid with respect to each LICENSED PRODUCT that is a different chemical entity from any other for which such milestones have been previously paid and that
is approved for a THERAPEUTIC AREA for which such milestone payments have not been previously paid. 

	4.5
	(a)
In the case of sublicenses granted hereunder, LICENSEE shall pay to HARVARD the percentage of SUBLICENSE INCOME, other than royalty payments made to LICENSEE for sale of LICENSED
PRODUCT by sublicensees, specified below based on the time that any such sublicense is granted as described below:

	(i)
	prior
to submission of IND application to the FDA for a LICENSED PRODUCT, LICENSEE shall pay to HARVARD [*] of SUBLICENSE INCOME,

	(ii)
	after
filing of IND application to the FDA for any LICENSED PRODUCT but prior to completion of collection of data for all patients enrolled in a Phase II clinical trial
sufficient to enable commencement of a Phase III clinical trial for a LICENSED PRODUCT, LICENSEE shall pay to HARVARD [*] of SUBLICENSE INCOME,

	(iii)
	after
completion of collection of data for all patients enrolled in a Phase II clinical trial sufficient to enable commencement of a Phase III clinical trial for a
LICENSED PRODUCT, LICENSEE shall pay to HARVARD [*] of SUBLICENSE INCOME.

	(iv)
	For
the avoidance of doubt, the parties agree that the reduction in sublicense payments from the [*] level described in
Section 4.5(a)(i) upon the attainment of the level of development specified in Section 4.5a (ii) and (iii) above shall only apply to a sublicense under PATENT RIGHTS
corresponding to the HARVARD case of Exhibit A to which such level of development appertains, and not to sublicenses of any other PATENT RIGHTS.

	(v)
	For
all sublicenses outside the field of human therapeutics, LICENSEE shall pay to HARVARD [*] of SUBLICENSE INCOME. 

(b)
In the case of sublicenses granted hereunder, LICENSEE shall pay to HARVARD [*] of royalty payments made to LICENSEE for sale of LICENSED PRODUCT by sublicensees. 

	4.6
	(a)
Should LICENSEE be required to pay royalties to a third party(ies) for the manufacture or sale of a LICENSED PRODUCT, the payments otherwise due HARVARD under Section 4.2
above for that LICENSED PRODUCT only shall be reduced by [*] of the royalties paid to such third parties; provided that the maximum amount of such reduction shall not exceed
[*] of the payments otherwise due HARVARD under Section 4.2. 

(b)
Should LICENSEE be required to pay royalties to a third party(ies) for the manufacture or sale of a LICENSED PRODUCT, the payments otherwise due HARVARD under Section 4.5(b) above for that
LICENSED PRODUCT only shall be reduced by [*] of the royalties paid to such third parties; provided that the percentage of royalty payments made to LICENSEE which is paid to
HARVARD pursuant to Section 4.5(b) shall not be less than [*], unless one of the third parties to which royalty payments are required as described above in this
clause (c) is BIOMOL, in which case the percentage of royalty payments made to LICENSEE which is paid to HARVARD pursuant to Section 4.5(b) shall not be less than
[*]. 

(c)
Should LICENSEE be required to pay milestone payments or a percentage of LICENSEE's sublicense income to BIOMOL, the payments otherwise due HARVARD under Sections 4.4 and 4.5(a) above for such
milestone or sublicense, respectively, shall be reduced by [*] of the dollar amount of the amounts paid to BIOMOL; provided that the maximum amount of such reduction shall not
exceed [*] of the payments otherwise due HARVARD under Section 4.4 and 4.5(a). 

	4.7
	(a)
Within five (5) business days following the execution of this Agreement, LICENSEE shall issue to HARVARD 400,000 shares of its Common Stock, $.001 par value per share, and
LICENSEE thereafter shall issue any additional shares of Common Stock as may be necessary to maintain HARVARD's ownership, following any such issuance, equal to no less than four percent (4%) of the
total number of shares of LICENSEE'S Common Stock outstanding on a Fully Diluted Basis (as defined below) until such time as LICENSEE has completed its first equity financing that raises at least
$2.5 million in cash in one or a series of closings; provided that, in the event LICENSEE raises a total of more than $2.5 million in such equity financing, LICENSEE shall be 

required
to issue to HARVARD only so many additional shares of Common Stock, if any, as are necessary so that HARVARD would have owned 4% of the total number of shares of LICENSEE'S Common Stock that
would have been outstanding on a Fully Diluted Basis (following the additional issuance to HARVARD) had LICENSEE sold only $2.5 million of capital stock in that financing (and not the amount in
excess of $2.5 million that was also sold). HARVARD acknowledges that all certificates representing the shares described in this Section may bear customary securities legends requiring
compliance with the Securities Act of 1933 and related state securities laws upon any transfer of such shares. LICENSEE represents and warrants to HARVARD that (i) all shares of Common Stock
issued to LICENSEE under this Agreement, when issued, will be duly and validly issued, fully paid and non-assessable; (ii) neither issuance of such shares nor compliance by LICENSEE
with the provisions of this Agreement will violate or breach, or conflict with, any law, regulation, order, agreement, instrument or obligation by which LICENSEE or any of its property is bound or
affected; and (iii) LICENSEE has provided HARVARD with (A) a capitalization table showing accurately all shares of LICENSEE'S capital stock that will be outstanding on a Fully Diluted
Basis immediately following the issuance to HARVARD of the 400,000 shares of Common Stock required to be issued initially hereunder and (B) a true and correct copy of LICENSEE'S charter and
by-laws as amended through the date of this Agreement. For purposes of this Section, the number of shares of Common Stock outstanding on a "Fully Diluted Basis" at any time shall include
(1) all then outstanding shares of Common Stock, whether or not fully vested, (2) all shares of Common Stock acquirable, directly or indirectly, upon exercise or conversion of any then
outstanding securities or rights, whether or not such securities or rights are then exercisable or convertible, (3) all shares of Common Stock that would be outstanding or acquirable, directly
or indirectly, upon the issuance (and exercise or conversion, if applicable) of all securities reserved for issuance under any stock purchase, stock option or other compensatory benefit plan of
LICENSEE, and (4) all shares of Common Stock then held in treasury by LICENSEE or acquirable, directly or indirectly, upon exercise or conversion of any securities then held in treasury,
whether or not such securities are then exercisable or convertible. 

(b)
LICENSEE shall permit HARVARD to have one representative attend each regularly scheduled meeting of the Board of Directors of LICENSEE, and LICENSEE shall send HARVARD notice of the time and place
of each such meeting in the same manner and at the same time as it sends such notice to its directors or committee members; provided that, HARVARD's representative shall not be entitled to participate
in those portions of any Board meeting in which the Board goes into executive session or during which the Board is discussing matters which the Board
determines in good faith present a conflict of interest for the HARVARD representative to attend, and provided further that this right of HARVARD shall terminate on the earlier of (x) the date
when HARVARD ceases to own at least half of the shares of LICENSEE'S Common Stock issued to it hereunder, and (y) the date when LICENSEE becomes subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended. 

	4.7
	For
payments due under Sections 4.2 and 4.4, when a LICENSED PRODUCT may be construed as a LICENSED PATENT PRODUCT or LICENSED KNOW-HOW PRODUCT, the higher payments due as
a LICENSED PATENT PRODUCT shall apply. 

ARTICLE
V

REPORTING 

	5.1
	Within
ninety (90) days of the Effective Date, LICENSEE shall provide HARVARD with its one year Operating and Development Plan on a confidential basis.

	5.2
	No
later than March 31 of each year to the term hereof, LICENSEE shall provide to HARVARD a written annual Progress Report summarizing progress on research and development,
regulatory approvals, manufacturing, sublicensing, marketing and sales during the most recent twelve (12) month period ending December 31 and plans for the forthcoming year. Following
the fifth (5th) anniversary of the Effective Date, such Progress Report shall be specific to each HARVARD 

Case
in Exhibit A. If progress differs from that anticipated in the plan required under Section 5.1, LICENSEE shall explain the reasons
for the difference and propose a modified Operating and Development Plan for HARVARD's review and approval. LICENSEE shall also provide any reasonable additional data HARVARD requires to evaluate
LICENSEE's performance. 

	5.3
	LICENSEE
shall report each milestone event pursuant to Article 4.4 within fifteen (15) days of its occurrence.

	5.4
	LICENSEE
shall report to HARVARD the date of first sale of LICENSED PRODUCTS in each country within thirty (30) days of occurrence.

	5.5
	(a)
Following the first commercial sale of a LICENSED PRODUCT, LICENSEE shall submit to HARVARD within sixty (60) days after each six-month period ending
June 30 and December 31, a Royalty Report setting forth for such half year at least the following information:

	(i)
	the
number of LICENSED PRODUCTS sold by LICENSEE and its AFFILIATES in each country;

	(ii)
	total
amount received for such LICENSED PRODUCTS;

	(iii)
	deductions
applicable to determine the NET SALES thereof;

	(iv)
	the
amount of SUBLICENSE INCOME received by LICENSEE; and

	(v)
	the
amount of royalty due thereon, or, if no royalties are due to HARVARD for any reporting period, the statement that no royalties are due. 

Such
report shall be certified as correct by an officer of LICENSEE and shall include a detailed listing of all deductions from royalties. 

	(a)
	LICENSEE
shall pay to HARVARD with each such Royalty Report the amount of royalty due with respect to such half year.

	(b)
	All
payments due hereunder shall be deemed received when funds are credited to HARVARD's bank account and shall be payable by check or wire transfer in United States dollars.
Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the New York Times or the Wall Street Journal) on the last working day
of each royalty period. No transfer, exchange, collection or other charges shall be deducted from such payments.

	(c)
	All
such reports shall be maintained in confidence by HARVARD except as required by law; however, HARVARD may include in its usual reports annual amounts of royalties paid.

	(d)
	Late
payments shall be subject to a charge of one and one-half percent (1.5%) per month, or $250, whichever is greater. Late payments that are overdue by more than one
hundred eighty (180) days will be subject to additional charge of 5% of the payment otherwise due.

	5.6
	In
the event of acquisition, merger, change of corporate name, or change of make-up, organization, or identity, LICENSEE shall notify HARVARD in writing within thirty
(30) days of such event.

	5.7
	If
LICENSEE or any AFFILIATE or sublicensee does not qualify as a "small entity" as provided by the United States Patent and Trademark Office, LICENSEE must notify HARVARD
immediately. 

ARTICLE
VI

RECORD KEEPING 

	6.1
	LICENSEE
shall keep, and shall require its AFFILIATES and sublicensees to keep, accurate records (together with supporting documentation) of LICENSED PRODUCTS made, used or sold under
this Agreement, appropriate to determine the amount of royalties due to HARVARD hereunder. Such records shall be retained for at least three (3) years following the end of the 

reporting
period to which they relate and shall be available during normal business hours upon reasonable prior notice not more than one time in each twelve-month period for examination by an
accountant selected by HARVARD, for the sole purpose of verifying reports and payments hereunder. In conducting examinations pursuant to this Section, HARVARD's accountant shall have access to all
records which HARVARD reasonably believes to be relevant to the calculation of royalties under Article IV. 

	6.2
	HARVARD's
accountant shall not disclose to HARVARD any information other than information relating to the accuracy of reports and payments made hereunder.

	6.3
	Such
examination by HARVARD's accountant shall be at HARVARD's expense, except that if such examination shows an underreporting or underpayment in excess of five percent (5%) for any
twelve (12) month period, then LICENSEE shall pay the cost of such examination as well as any additional sum that would have been payable to HARVARD had the LICENSEE reported correctly, plus
interest on said sum at the rate of one and one-half percent (1.5%) per month. 

ARTICLE
VII

DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE 

	7.1
	Within
fifteen (15) days following the execution of this Agreement, LICENSEE shall reimburse HARVARD for all reasonable expenses HARVARD has incurred for the preparation,
filing, prosecution and maintenance of PATENT RIGHTS. Thereafter LICENSEE shall reimburse HARVARD for all such future expenses upon receipt of invoices from HARVARD. HARVARD shall invoice LICENSEE for
such patent expenses on a quarterly basis beginning with an invoice for patent costs accrued as of the date of execution of this Agreement. LICENSEE shall pay the invoiced amounts within thirty
(30) days of receipt of each invoice.

	7.2
	HARVARD
shall be responsible for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in PATENT RIGHTS, using counsel
acceptable to HARVARD; provided that, if, at any time following the six-month anniversary of the Effective Date, LICENSEE reasonably objects to counsel selected by HARVARD, the parties
shall confer and mutually agree on different counsel for the filing, prosecution of maintenance of patent applications and patents included in the PATIENT RIGHTS. HARVARD shall use reasonable and
diligent efforts to keep LICENSEE timely (at least 30 days when possible) informed of decisions and deadlines and to seek and seriously consider suggestions from LICENSEE as to the preparation,
filing, prosecution and maintenance of such patent applications and patents, and shall instruct counsel to promptly furnish to LICENSEE copies of documents relevant to any such preparation, filing,
prosecution or maintenance in advance of any such filing.

	7.3
	HARVARD
shall, in consultation with LICENSEE, file all patent applications covering patentable EXCLUSIVE KNOW-HOW as continuation-in-part
applications to patent filings licensed hereunder or as separate patent applications; provided that in the event such applications are filed, LICENSEE hereby consents to discuss in good faith with
HARVARD the relative valuations of the HARVARD Case Numbers set forth in Section 1.16 hereof and to amend Section 1.16 of Agreement to incorporate such revised valuations.

	7.4
	HARVARD
and LICENSEE shall cooperate fully in the preparation, filing, prosecution and maintenance of PATENT RIGHTS and of all patents and patent applications licensed to LICENSEE
hereunder. Each party shall provide to the other prompt notice as to all matters which come to its attention and which may affect the preparation, filing, prosecution or maintenance of any such patent
applications or patents.

	7.5
	LICENSEE
may elect not to pay expenses for the prosecution or maintenance of any patent application or patent included in the PATENT RIGHTS in any country by providing sixty
(60) days written notice to HARVARD. Such notice shall not relieve LICENSEE from responsibility to pay for patent-related expenses incurred prior to the expiration of the (60) day notice
period (or such longer period specified in LICENSEE's notice). Upon such notice, LICENSEE's rights under this 

Agreement
in such countries shall terminate and HARVARD shall be free to license PATENT RIGHTS in such countries to third parties. 

ARTICLE
VIII

INFRINGEMENT 

	8.1
	With
respect to any PATENT RIGHTS that are exclusively licensed to LICENSEE pursuant to this Agreement, LICENSEE shall have the right to prosecute in its own name and at its own
expense any infringement within the FIELD of such patent, so long as such license is exclusive at the time of the commencement of such action. HARVARD agrees to notify LICENSEE promptly of each
infringement of such patents of which HARVARD is or becomes aware. Before LICENSEE commences an action with respect to any infringement of such patents, LICENSEE shall give careful consideration to
the views of HARVARD and to potential effects on the public interest in making its decision whether or not to sue. 

	8.2	 	(a)	 	If LICENSEE elects to commence an action as described above, HARVARD may, to the extent permitted by law, elect to join as a party in that action. Regardless of whether HARVARD elects to join as a party, HARVARD shall
cooperate fully with LICENSEE in connection with any such action.
	

 	
 	

(b)	
 	

LICENSEE shall reimburse HARVARD for any reasonable costs HARVARD incurs, including reasonable attorneys' fees, as part of an action brought by LICENSEE, irrespective of whether HARVARD becomes a co-plaintiff.
	

 	
 	

(c)	
 	

Whether or not HARVARD becomes a party in any action described in this Section, LICENSEE shall keep HARVARD reasonably informed of the progress of the action and shall give HARVARD a reasonable opportunity in advance to consult with LICENSEE and
offer its views about major decisions affecting the litigation. LICENSEE shall give careful consideration to those views, but shall have the ultimate right to control the action. LICENSEE shall vigorously defend the validity and enforceability of the
PATENT RIGHTS if challenged in the action, unless it has made a good faith decision to not do so.

	8.3
	If
LICENSEE elects to commence an action as described above, LICENSEE may deduct from its royalty payments to HARVARD with respect to the patent(s) subject to suit an amount not
exceeding [*] of LICENSEE's expenses and costs of such action, including reasonable attorneys' fees; provided, however, that such reduction shall not exceed
[*] of the total royalty due to HARVARD with respect to the patent(s) subject to suit for each calendar year. If such [*] of LICENSEE's expenses and
costs exceeds the amount of royalties deducted by LICENSEE for any calendar year, LICENSEE may to that extent reduce the royalties due to HARVARD from LICENSEE in succeeding calendar years, but never
by more than [*] of the total royalty due in any one year with respect to the patent(s) subject to suit.

	8.4
	No
settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the prior written consent of HARVARD, which consent shall not be
unreasonably withheld.

	8.5
	Recoveries
or reimbursements from actions commenced by LICENSEE pursuant to this Article shall first be applied to reimburse LICENSEE and HARVARD for litigation costs not paid from
royalties and then to reimburse HARVARD for royalties deducted by LICENSEE pursuant to Section 8.3. Any remaining recoveries or reimbursements shall be split [*] to
LICENSEE and [*] to HARVARD.

	8.6
	If
LICENSEE elects not to exercise its right to prosecute an infringement of the PATENT RIGHTS pursuant to this Article, HARVARD may do so at its own expense and shall control such
action. LICENSEE shall cooperate fully with HARVARD in connection with any such action. HARVARD shall reimburse LICENSEE for any reasonable costs LICENSEE incurs, including reasonable attorneys' fees,
as part of an action brought by HARVARD, irrespective of whether 

LICENSEE
becomes a co-plaintiff. Any remaining recoveries or reimbursements shall be split [*] to HARVARD and [*] to LICENSEE. 

	8.7
	Without
limiting the generality of Section 8.6, HARVARD may, at its election and by notice to LICENSEE, establish a time limit of one hundred (100) days for LICENSEE to
decide whether to prosecute any infringement of which HARVARD is or becomes aware. If, by the end of such hundred (100) day period, LICENSEE has not commenced such an action, HARVARD may
prosecute such an infringement at its own expense, controlling such action and retaining all recoveries therefrom. With respect to any such infringement action prosecuted by HARVARD in good faith,
LICENSEE shall pay over to HARVARD any payments (whether or not designated as "royalties") made by the alleged infringer to LICENSEE under any existing or future sublicense authorizing LICENSED
PRODUCTS, up to the amount of HARVARD's unreimbursed litigation expenses (including, but not limited to, reasonable attorneys' fees).

	8.8
	If
a declaratory judgment action is brought naming LICENSEE as a defendant and alleging invalidity of any of the,PATENT RIGHTS; LICENSEE shall have the first right to
defend such action; provided that, if LICENSEE does not elect to defend such action at its own expense by written notice to HARVARD within thirty (30) days of the commencement of any such
action, HARVARD may elect to take over the sole defense of the action at its own expense. The party not bringing such action shall cooperate fully with the party bringing such action in connection
with any such action, and the party bringing such action shall give careful consideration to the views of the other party in connection with any such action. 

ARTICLE
IX

TERMINATION OF AGREEMENT 

	9.1
	This
Agreement, unless terminated as provided herein, shall remain in effect on a country by country and LICENSED PRODUCT by LICENSED PRODUCT basis until (i) with respect to
each LICENSED PATENT PRODUCT, the expiration or abandonment of the last to expire or abandoned VALID CLAIM of a patent or patent application in the PATENT RIGHTS in such country covering such LICENSED
PATENT PRODUCT and (ii) with respect to each LICENSED KNOW-HOW PRODUCT, twelve (12) years after the first commercial sale of such LICENSED KNOW-HOW PRODUCT in
each such country.

	9.2
	HARVARD
may terminate this Agreement as follows:

	(a)
	If
LICENSEE does not make a payment due hereunder and fails to cure such non-payment (including the payment of interest in accordance with Section 5.4(e)) within
sixty (60) days after the date of notice in writing of such non-payment by HARVARD or fails to pay the license issue fee or reimburse past (but not future) patent expenses within
the time periods prescribed in Articles 4.1 and 7.1 respectively.

	(b)
	If
LICENSEE defaults in its obligations under Sections 10.4(c) and 10.4(d) to procure and maintain insurance.

	(c)
	If
LICENSEE shall become insolvent, shall make an assignment for the benefit of creditors, or shall have a petition in bankruptcy filed for or against it. Such termination shall be
effective immediately upon HARVARD giving written notice to LICENSEE.

	(d)
	If
LICENSEE is convicted of a felony relating to the manufacture, use, or sale of LICENSED PRODUCTS.

	(e)
	If,
at any time after five years from the date of this Agreement, HARVARD determines that the Agreement should be terminated pursuant to Section 3.2 (d), subject to the
limitations described in Section 3.2(d).

	(f)
	If
an examination by HARVARD's accountant shows an underreporting or underpayment by LICENSEE in excess of the greater of (i) $100,000 and (ii) twenty percent (20%) of
the amount otherwise due for any twelve month period. 

	(g)
	Except
as provided in Subsections (a), (b), (c), (d), (e) and (f) above, if LICENSEE defaults in the performance of any obligations under this Agreement and the default
has not been remedied within ninety (90) days after the date of notice in writing of such default by HARVARD.

	9.3
	LICENSEE
shall provide, in all sublicenses granted by it under this Agreement, that LICENSEE's interest in such sublicenses shall be assigned to HARVARD upon termination of this
Agreement, provided the sublicense would not place any obligations on HARVARD that are greater or on the sublicense that are less than those included in this Agreement for HARVARD and LICENSEE,
respectively. HARVARD agrees to the assignment and assumption of all such sublicenses on such terms upon any termination of this Agreement.

	9.4
	LICENSEE
may terminate this Agreement by giving ninety (90) days advance written notice of termination to HARVARD. Upon termination, LICENSEE shall submit a final Royalty
Report to HARVARD and any royalty payments shall become immediately payable.

	9.5
	Upon
termination pursuant to Section 9.2 or 9.4, whether by LICENSEE or by HARVARD, LICENSEE shall cease all use of KNOW-HOW.

	9.5
	Sections
6.1, 6.2, 6.3, 7.1, 8.5, 9.4, 9.5, 10.2, 10.3, 10.5, 10.6, 10.8 and 10.9 of this Agreement shall survive termination. 

ARTICLE
X

GENERAL 

	10.1
	HARVARD
does not warrant the validity of the PATENT RIGHTS licensed hereunder and makes no representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that
such PATENT RIGHTS or the KNOW-HOW may be exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing other patents.

	10.2
	HARVARD
EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE
PATENT RIGHTS, KNOW-HOW OR INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES. OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. Further, HARVARD has made no
investigation and makes no representation that any materials supplied by it or the method used in making or using such materials are free from liability for patent infringement.

	10.3
	IN
NO EVENT SHALL HARVARD BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS OR EXPECTED SAVINGS OR
OTHER ECONOMIC LOSSES, OR FOR INJURY TO PERSONS OR PROPERTY) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER, REGARDLESS WHETHER HARVARD KNOWS OR SHOULD KNOW OF THE
POSSIBILITY OF SUCH DAMAGES. HARVARD'S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO THIS AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID BY LICENSEE TO HARVARD UNDER
THIS AGREEMENT. The foregoing exclusions and limitations shall apply to all claims and actions of any kind, whether based on contract, tort (including but not limited to negligence), or any other
grounds.

	10.4
	LICENSEE
shall not distribute or release the KNOW-HOW to others except to further the, purposes of this Agreement. LICENSEE shall protect the KNOW-HOW at
least as well as it protects its own valuable tangible property and shall take measures to protect the KNOW-HOW from any claims by third parties including creditors and trustees in
bankruptcy. 

	10.5	 	(a	)	LICENSEE shall indemnify, defend and hold harmless HARVARD and its current or former directors, governing board members, trustees, officers, faculty, medical and professional staff, employees, students, and agents and
their respective successors, heirs and assigns (collectively, the "INDEMNITEES"), from and against any claim, liability, cost, expense, damage, deficiency, loss or obligation of any kind or nature (including, without limitation, reasonable attorney's
fees and other costs and expenses of litigation) (collectively, "Claims"), based upon, arising out of, or otherwise relating to this Agreement, including without limitation any cause of action relating to product liability concerning any product,
process, or service made, used or sold pursuant to any right or license granted under this Agreement; [*].
	

 	
 	

(b	
)	

LICENSEE shall, at its own expense except as set forth in the proviso in clause (a) above, provide attorneys reasonably acceptable to HARVARD to defend against any actions brought or filed against any Indemnitee hereunder with respect to the
subject of indemnity contained herein, whether or not such actions are rightfully brought.
	

 	
 	

(c	
)	

Beginning at the time any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a sublicensee, AFFILIATE or agent of LICENSEE, LICENSEE shall, at
its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than $2,000,000 per incident and $2,000,000 annual aggregate and naming the Indemnitees as additional insureds. During clinical trials of any
such product, process or service, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in such equal or lesser amount as HARVARD shall require consistent with its internal policies, naming the
Indemnitees as additional insureds. Such commercial general liability insurance shall provide: (i) product liability coverage; and (ii) broad form contractual liability coverage for LICENSEE's indemnification under this Agreement. If
LICENSEE elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of $250,000 annual aggregate) such self-insurance program must be acceptable to HARVARD and the Risk Management
Foundation of the Harvard Medical Institutions, Inc. in their reasonable discretion. The minimum amounts of insurance coverage required shall not be construed to create a limit of LICENSEE's liability with respect to its indemnification under
this Agreement.
	

 	
 	

(d	
)	

LICENSEE shall provide HARVARD with written evidence of such insurance upon request of HARVARD. LICENSEE shall provide HARVARD with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such
insurance; if LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, HARVARD shall have the right to terminate this Agreement effective at the end of such fifteen (15) day period
without notice or any additional waiting periods.
	

 	
 	

(e	
)	

LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during: (i) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is
being commercially distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a reasonable period after the period referred to in Subsection (e)(i) above which in no event shall be less than fifteen
(15) years.

	

10.6	
 	

LICENSEE shall not use HARVARD's name or insignia, or any adaptation of them, or the name of any of HARVARD's inventors in any advertising, promotional or sales literature without the prior written approval of HARVARD.
	 	 	 

	

10.7	
 	

Without the prior written approval of HARVARD in each instance, neither this Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to any person whether voluntarily or involuntarily, by operation
of law or otherwise, except that LICENSEE may assign this agreement in connection with any merger, reorganization, consolidation or sale of all or substantially all of the outstanding capital stock or assets of LICENSEE. This Agreement shall be
binding upon the respective successors, legal representatives and assignees of HARVARD and LICENSEE.
	

10.8	
 	

The interpretation and application of the provisions of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts.
	

10.9	
 	

LICENSEE shall comply with all applicable laws and regulations. In particular, it is understood and acknowledged that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of
such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations among other things, prohibit or require a license for the export of certain types of
technical data to certain specified countries. LICENSEE hereby agrees and gives written assurance that it will comply with all United States laws and regulations controlling the export of commodities and technical data, that it will be solely
responsible for any violation of such by LICENSEE or its AFFILIATES or sublicensees, and that it will defend and hold HARVARD harmless in the event of any legal action of any nature occasioned by such violation.
	

10.10	
 	

LICENSEE agrees: (i) to obtain all regulatory approvals required for the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES; and (ii) to utilize appropriate patent marking on such LICENSED PRODUCTS. LICENSEE also agrees to
register or record this Agreement as is required by law or regulation in any country where the license is in effect.
	

10.11	
 	

Any notices to be given hereunder shall be sufficient if signed by the party (or party's attorney) giving same and either: (i) delivered in person; (ii) mailed certified mail return receipt requested; or (iii) faxed to other party if
the sender has evidence of successful transmission and if the sender promptly sends the original by ordinary mail, in any event to the following addresses:

If
to LICENSEE: 

Sirtris
Pharmaceuticals, Inc.

1000 Winter Street

Suite 3350

Waltham, MA 02451

Fax: (781) 290-0880 

With
a copy to: 

Marc
A. Rubenstein

Ropes & Gray LLP

One International Place

Boston, MA 02110

Fax: (617) 951-7050 

If
to HARVARD: 

Harvard
Medical School

25 Shattuck St, Gordon Hall 414

Office of Technology Licensing

Boston, MA 02115

Fax: (617) 432-2788 

With
a copy to: 

Harvard
University

Office of Technology and Trademark

Licensing Holyoke Center, Suite 727

1350 Massachusetts Ave.

Cambridge, MA 02138

Fax: (617) 495-9568 

By
such notice either party may change their address for future notices. 

Notices
delivered in person shall be deemed given on the date delivered. Notices sent by fax shall be deemed given on the date faxed. Notices mailed shall be deemed given on the date postmarked on the
envelope. 

	10.12
	Should
a court of competent jurisdiction later hold any provision of this Agreement to be invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it shall be
considered severed from this Agreement. All other provisions, rights and obligations shall continue without regard to the severed provision, provided that the remaining provisions of this Agreement
are in accordance with the intention of the parties.

	10.13
	In
the event of any controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof, the parties shall try to settle such conflict amicably
between themselves. Subject to the limitation stated in the final sentence of this Section, any such conflict which the parties are unable to resolve promptly shall be settled through arbitration
conducted in accordance with the rules of the American Arbitration Association. The demand for arbitration shall be filed within a reasonable time after the controversy or claim has arisen, and in no
event after the date upon which institution of legal proceedings based on such controversy or claim would be barred by the applicable statute of limitation. Such arbitration shall be held in Boston,
Massachusetts. The award through arbitration shall be final and binding. Either party may enter any such award in a court having jurisdiction or may make application to such court for judicial
acceptance of the award and an order of enforcement, as the case may be. Notwithstanding the foregoing, either party may, without recourse to arbitration, assert against the other party a third-party
claim or cross-claim in any action brought by a third party, to which the subject matter of this Agreement may be relevant.

	10.14
	This
Agreement may be executed in any number of counterparts, each such counterpart shall be deemed to be an original instrument, and all such counterparts together shall constitute
but one agreement. Any such counterpart may contain one or more signature pages. This Agreement may be executed by facsimile signature pages.

	10.15
	This
Agreement constitutes the entire understanding between the parties and neither party shall be obligated by any condition or representation other than those expressly stated
herein or as may be subsequently agreed to by the parties hereto in writing. 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives. 

	

PRESIDENT AND FELLOWS OF

HARVARD COLLEGE	
 	

SIRTRIS PHARMACEUTICALS, INC.
	

/s/ O. PREM DAS
 O. Prem Das, Director

Office for Technology Licensing	
 	

/s/ CHRISTOPH WESTPHAL
 Signature
	 	 	Christoph Westphal
 Name
	

8/16/04
 Date	
 	

Chief Executive Officer
 Title
	

 	
 	

8/16/04
 Date

EXHIBIT A  

[*] 

EXHIBIT B  

Therapeutic Areas

Cardiovascular

Neurology/CNS

Endocrinology/metabolism

Obesity

Oncology

Rheumatology

Allergy/immunology

Dermatology

Gastroenterology

Infectious disease

Ophthalmology

Pulmonology/respiratory

Genito-urinary/nephrology

Hematology

All others 

        For
clarification, each Therapeutic Area includes, but is not limited to, the following indications: 

Cardiovascular 

	•
	angina

	•
	arryhythmia

	•
	arteriosclerosis/athlersclerosis

	•
	congenital
heart disease 
	•
	congestive
heart failure 
	•
	edema 
	•
	heart
attack 
	•
	high
blood pressure 
	•
	stroke

Neurology/CNS

	•
	ADD

	•
	ADHD

	•
	Adrenoleukodystrophy 
	•
	ALS 
	•
	Alzheimers 
	•
	Anxiety 
	•
	Aphasia

	•
	Bell's
Palsy 
	•
	Cerebral
palsy 
	•
	Depression

	•
	Epilepsy

	•
	Huntington's
disease 
	•
	Insomnia 
	•
	Memory 
	•
	Migraine

	•
	Multiple
sclerosis 
	•
	Narcolepsy

	•
	Neuropathy

	•
	Parkinson's
disease 
	•
	Psychosis 
	•
	Tay-Sachs 
	•
	Vertigo 

Endocrinology/metabolism

	•
	Diabetes,
Type I 
	•
	Diabetes,
Type II 
	•
	Goiter 
	•
	Graves'
disease 
	•
	Hyperparathyroidism 
	•
	Hyperthyroidism

	•
	Insulin
resistance 
	•
	Metabolic
Syndrome X 
	•
	Pheochromocytoma

	•
	Turner's
syndrome 

Oncology 

	•
	Bladder
cancer 
	•
	Bone
cancer 
	•
	Brain
cancer 
	•
	Breast
cancer 
	•
	Cervical
cancer 
	•
	Colorectal
cancer 
	•
	Eye
cancer 
	•
	Hodgkin's
disease 
	•
	Kaposi's
sarcoma 
	•
	Leukemia 
	•
	Lung
cancer 
	•
	Liver
Cancer 
	•
	Melanoma

	•
	Multiple
myeloma 
	•
	Ovarian
cancer 
	•
	Pancreatic
cancer 
	•
	Stomach
cancer 
	•
	Uterine
cancer 
	•
	Vaginal
cancer 
	•
	Vulvar
cancer 

Rheumatology/musculoskeletal

	•
	Ankylosing
spondylitis 
	•
	Arthritis

	•
	Ataxia 
	•
	Back
pain 
	•
	Bursitis 
	•
	Carpal
tunnel syndrome 
	•
	Chronic
fatigue syndrome 
	•
	Fibromyalgia

	•
	Gout,
pseudogout 
	•
	Lupus

	•
	Myositis 
	•
	Osteoarthritis 
	•
	Osteoporosis 
	•
	Sjogren's
Syndrome 

Allergy/immunology

	•
	Allergy

	•
	Wegener's
Granulomatosis 

Dermatology 

	•
	Acne 
	•
	Dermatitis

	•
	Eczema

	•
	Itching

	•
	Psoriasis

Gastroenterology

	•
	GERD 
	•
	Celiac
disease 
	•
	Cirrhosis 
	•
	Ulcerative
colitis 
	•
	Crohn's
disease 
	•
	Duodenal
ulcer 
	•
	Fistulas

	•
	Irritable
bowel syndrome 

Infectious
disease 

	•
	Anthrax 
	•
	Botulism 
	•
	Candidiasis

	•
	Chagas
disease 
	•
	Cryptosporidiosis

	•
	Gonorrhea

	•
	Hepatitis

	•
	Herpes 
	•
	HTV/AIDS 
	•
	HPV 
	•
	Influenza 
	•
	Leishmaniasis

	•
	Listeria

	•
	Lyme
disease 
	•
	Malaria

	•
	Measles

	•
	Meningitis 
	•
	Mononucleosis 
	•
	Mumps 
	•
	Parasitic
disease 
	•
	Plague

	•
	Pneumocycstis
carinii 
	•
	Pneumonia

	•
	Rabies

	•
	Roseola 
	•
	RSV 
	•
	Salmonella 
	•
	SARS 
	•
	Sepsis

	•
	Shingles

	•
	Small
pox 
	•
	Tetanus

	•
	Toxoplasmosis

	•
	Tuberculosis 
	•
	Varicella-Zoster
virus 
	•
	West
Nile Virus 
	•
	Yellow
Fever 

Ophthalmology

	•
	Macular
degeneration 
	•
	Cataracts 

Pulmonology/respiratory 

	•
	Asthma

	•
	COPD

	•
	Bronchitis

	•
	Cystic
fibrosis 
	•
	Emphysema

	•
	Sleep
apnea 

Genito-urinary 

	•
	Dyspareunia 
	•
	End-stage
renal disease 
	•
	Erectile
dysfunction 
	•
	Interstitial
cystitis 
	•
	Premature
ejaculation 
	•
	Urinary
incontinence 
	•
	Kidney
failure 

Hematology 

	•
	Anemia 
	•
	Behcet's
syndrome 

All
others 

AMENDMENT NO. 1 TO LICENSE AGREEMENT 

        This
Amendment No. 1 to License Agreement (the "Amendment") amends to License Agreement (the "License Agreement") dated as of August 16, 2004 between Sirtris
Pharmaceuticals, Inc. ("LICENSEE") and the President and Fellows of Harvard College ("HARVARD"). The General Hospital Corporation d/b/a Massachusetts General Hospital, a
not-for-profit corporation of the Commonwealth of Massachusetts with a business address at 55 Fruit Street, Boston, MA 02114 is a party to this Amendment for the applicable
portions of this Amendment and the License Agreement as modified hereby. Capitalized terms used but not defined herein shall have the meaning given to them in the License Agreement. 

        WHEREAS
LICENSEE and HARVARD have entered into the License Agreement; 

        WHEREAS,
LICENSEE and HARVARD desire to amend the License Agreement as set forth herein; 

        NOW
THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties to the License Agreement hereby agree as follows: 

	1.
	Section 2.1
of the License Agreement is amended so that the words "Massachusetts General Hospital" appearing in such section are deleted and replaced with the words "The General
Hospital Corporation d/b/a Massachusetts General Hospital."

	2.
	Section 3.2(b)
of the License Agreement is hereby deleted in its entirety and replaced with the following:

	(b)
	The
following rights arc reserved within the FIELD:

	(i)
	HARVARD's
right to make and use for HARVARD ACADEMIC RESEARCH PURPOSES the subject matter described and claimed in PATENT RIGHTS and EXCLUSIVE KNOW-HOW;

	(ii)
	HARVARD's
right to grant to other non-profit institutions non-exclusive licenses to make and use for ACADEMIC RESEARCH PURPOSES the subject
matter described and claimed in PATENT RIGHTS and EXCLUSIVE KNOW-HOW; provided that HARVARD shall promptly notify LICENSEE of the identity of any licensee to which a license is granted by
HARVARD under this clause; and

	(iii)
	MGH's
right to make and use for ACADEMIC RESEARCH PURPOSES the subject matter described and claimed in the patent described by HMS Ref. No. 2288 in  Exhibit A hereto (MGH Ref. No. 2533).

	3.
	Section 10.5(a)
and 10.5(b) of the License Agreement are hereby deleted in their entirety and replaced with the following: 

	10.5(a)	 	LICENSEE shall indemnify, defend and hold harmless HARVARD and MGH and their current or former directors, governing board members, trustees, officers, faculty, medical and professional staff, employees, students, and
agents and their respective successors, heirs and assigns (collectively, the "INDEMNITEES"), from and against any claim, liability, cost, expense, damage, deficiency, loss or obligation of any kind or nature (including, without limitation, reasonable
attorney's fees and other costs and expenses of litigation) (collectively, "Claims"), based upon, arising out of, or otherwise relating to this Agreement, including without limitation any cause of action relating to product liability concerning any
product, process, or service made, used or sold pursuant to any right or license granted under this Agreement; [*].
	

10.5(b)	
 	

LICENSEE shall, at its own expense except as set forth in the proviso in clause (a) above, provide attorneys reasonably acceptable to HARVARD and MGH to defend against any actions brought or filed against any Indemnitee hereunder with respect to
the subject of indemnity contained herein, whether or not such actions are rightfully brought.

	4.
	Section 10.6
of the License Agreement is hereby deleted in its entirety and replaced with the following: 

	10.6	 	LICENSEE shall not use HARVARD's or MGH's name or insignia, or any adaptation of them, or the name of any of HARVARD's or MGH's inventors in any advertising, promotional or sales literature without the prior written
approval of HARVARD or MGH, as applicable.

	5.
	The
following Section 10.16 is added to the License Agreement: 

	10.16	 	This Agreement may be amended or modified only in by a written instrument that is signed by HARVARD and LICENSEE; provided that any amendment or modification hereof that directly and specifically affects or impairs the
rights of MGH hereunder shall not be effective unless additionally signed by MGH.

	6.
	Miscellaneous.

	a.
	Except
as modified hereby, the parties hereby confirm and ratify the License Agreement in all respects.

	b.
	This
Amendment may be executed in any number of counterparts, each such counterpart shall be deemed to be an original instrument, and all such counterparts together shall constitute
but one agreement. Any such counterpart may contain one or more signature pages. This Amendment may be executed by facsimile signature pages. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives. 

	PRESIDENT AND FELLOWS OF

HARVARD COLLEGE	 	 	 	SIRTRIS PHARMACEUTICALS, INC.
	

/s/  O. PREM DAS      
 O. Prem Das, Director

Office for Technology Licensing	
 	

 	
 	

/s/  CHRISTOPH WESTPHAL      
 Signature
	

 	
 	

 	
 	

Christoph Westphal
 Name
	

1/27/05
 Date	
 	

 	
 	

Chief Executive Officer
 Title
	

 	
 	

 	
 	

1/30/05
 Date
	

THE GENERAL HOSPITAL

CORPORATION D/B/A

MASSACHUSETTS GENERAL HOSPITAL	
 	

 	
 	

 
	

/s/  FRANCES TONEGUZZO      
 Frances Toneguzzo, Director

Corporate Sponsored Research & Licensing	
 	

 	
 	

 
	

1/17/05
 Date	
 	

 	
 	

 

AMENDMENT NO. 2 TO LICENSE AGREEMENT  

        This Amendment No. 2 to License Agreement (this "Amendment No. 2") is entered into as of the 2nd day of February, 2007, by and between
Sirtris Pharmaceuticals, Inc., a corporation organized and existing under the laws of Delaware, having its principal office at 790 Memorial Drive, Suite 104, Cambridge, MA 02139 (hereinafter
"LICENSEE") and President and Fellows of Harvard College, a charitable corporation of the Commonwealth of Massachusetts, having an office at Holyoke Center, Suite 727, 1350 Massachusetts Avenue,
Cambridge, MA 02138 (hereinafter "HARVARD"). The General Hospital Corporation d/b/a Massachusetts General Hospital, a not-for-profit corporation of the Commonwealth of
Massachusetts with a business address at 55 Fruit Street, Boston, MA 02144 (hereinafter "MGH") is a party to this Amendment No. 2 for the applicable portions hereof and the License Agreement
(as defined below) as modified hereby. 

WITNESSETH:

        WHEREAS, a License Agreement (the "License Agreement") was entered into by and between LICENSEE and HARVARD on August 16, 2004; 

        WHEREAS, LICENSEE, HARVARD and MGH amended the License Agreement by means of Amendment No. 1 to License Agreement on
January 30, 2005 ("Amendment No. 1"); 

        WHEREAS, a first new invention (HARVARD Case No. 2439, entitled, "Therapeutic value of Sirtl on human neurodegenerative diseases")
that relates to inventions covered by PATENT RIGHTS was made jointly by David A. Sinclair, Mihn Dang Nguyen and Kevin Bitterman of HARVARD, Li-Huei Tsai, an employee of the Howard Hughes
Medical Institute (HHMI) and a faculty member of HARVARD, and Konrad T. Howitz and Robert E. Zipkin of BIOMOL Research Laboratories; 

        WHEREAS, HARVARD is owner by assignment from David A. Sinclair, Mihn Dang Nguyen and Kevin Bitterman of their respective entire interests
in such first new invention; 

        WHEREAS, HARVARD is owner by assignment from HHMI of Li-Huei Tsai's entire interest in such first new invention; 

        WHEREAS, such first new invention is covered by United States patent application *; 

        WHEREAS, *; 

        WHEREAS, LICENSEE holds a license under HARVARD Case No. 2210 pursuant to the License Agreement; 

        WHEREAS, LICENSEE wishes to obtain a license under HARVARD Case No. 2439; 

        WHEREAS, a second new invention (HARVARD Case No. 2445, entitled, "Activation of sirtuin (class III deacetylases) by the
human equivalent of yeast PNC1-PBEF/NAMPT/Visfatin") that relates to inventions covered by the PATENT RIGHTS was made jointly by David A Sinclair and Kevin J. Bitterman of HARVARD; 

        WHEREAS, HARVARD is owner by assignment from David A. Sinclair and Kevin J. Bitterman of their respective entire interests in such second
new invention; 

        WHEREAS, such second new invention is covered by United States patent application *; 

        WHEREAS, *; 

        WHEREAS, LICENSEE holds a license under HARVARD Case No. 1960 pursuant to the License Agreement; 

        WHEREAS, LICENSEE wishes to obtain a license under HARVARD Case No. 2445; and 

        WHEREAS, the parties hereto have determined that it is in their respective best interests to amend the License Agreement (1) to
include a grant of rights under HARVARD's interests in each of HARVARD Case Nos. 2439 and 2445; and (2) to include certain rights of, and obligations due to, HHMI on account of certain of the
licenses granted pursuant to this Amendment No. 2; and (3) to 

provide
for payments to be made by LICENSEE to HARVARD on account of the licenses granted pursuant to this Amendment No. 2; 

        NOW, THEREFORE, the parties hereto agree as follows: 

	1.
	Amendment
to the License Agreement.

	(a)
	Paragraph 1.3
is hereby deleted in its entirety and replaced with the following: 

"FIELD:
All fields of use." 

	(b)
	Paragraph 1.5
("HARVARD ACADEMIC RESEARCH PURPOSES" defined) is hereby deleted.

	(c)
	New
Paragraph 1.5 is hereby added, as follows: 

"HHMI:
The Howard Hughes Medical Institute, a medical research organization having headquarters at 4000 Jones Bridge Road, Bethesda, MD 20815." 

	(d)
	Paragraph 1.16
is hereby deleted in its entirety and replaced with the following: 

"PATENT
RIGHTS: The patent and patent applications described in Exhibit A hereto, as such  Exhibit A may be amended pursuant to Section 7.3 hereof,
as well as, for all such patents and patent applications, the inventions
described and claimed therein, and any divisions or continuations, continuations-in-part (to the extent the claims are directed to subject matter specifically described in such
patents or patent applications or, in the case of PATENT RIGHTS that do not include an employee of HHMI as an inventor, are dominated by the claims of the existing PATENT RIGHTS or relate to EXCLUSIVE
KNOW-HOW), patents issuing thereon or reissues thereof, and any and all foreign patents and patent applications corresponding thereto, all to the extent owned, either solely or with
others, and controlled by HARVARD. In the event that separate patent applications(s) not included in the foregoing are filed covering EXCLUSIVE KNOW-HOW pursuant to Section 7.3,
such applications, the inventions described and claimed therein, and any divisions or continuations, continuations-in-part (to the extent the claims are directed to subject
matter specifically described in such patents or patent applications or, in the case of PATENT RIGHTS that do not include an employee of HHMI as an inventor, are dominated by the claims of the
existing PATENT RIGHTS), patents issuing thereon or reissues thereof, and any and all foreign patents and patent applications corresponding thereto shall be included in HARVARD Case Number 2361 and
shall be included in PATENT RIGHTS." 

	(e)
	Subparagraph
3.2(b) is hereby deleted in its entirety and replaced with the following: 

"The
following rights are reserved within the FIELD and the exclusivity of the license shall be subject to these rights: 

	(i)
	HARVARD's
right to make and use, and to grant other non-profit institutions the right to make and use, EXCLUSIVE KNOW-HOW and the subject matter
described and claimed in the PATENT RIGHTS for ACADEMIC RESEARCH PURPOSES; provided that HARVARD shall promptly notify LICENSEE of the identity of any licensee to which a license is granted by HARVARD
under this clause; and

	(ii)
	MGH's
right to make and use, and to grant other non-profit institutions the right to make and use, the subject matter described and claimed in the PATENT
RIGHTS that correspond to HARVARD Case Number 2288 (MGH Case Number 2533) for ACADEMIC RESEARCH PURPOSES; provided that MGH shall promptly notify LICENSEE of the identity of any licensee to which a
license is granted by MGH under this clause; and

	(iii)
	HHMI's
right to make and use, and to grant other non-profit institutions the right to make and use, the subject matter described and claimed in the PATENT
RIGHTS that correspond to HARVARD Case Number 2439 for ACADEMIC RESEARCH 

PURPOSES;
provided that HHMI shall promptly notify LICENSEE of the identity of any licensee to which a license is granted by HHMI under this clause. 

For
the sake of clarity, the obligation to notify Licensee described in subsections (i)-(iii) shall not apply with respect to material transfer agreements or other agreements that do not
explicitly grant a license to practice the inventions claimed in the PATENT RIGHTS." 

	(f)
	Subparagraph
3.2(e) is hereby deleted in its entirety and replaced with the following: 

"In
all sublicenses or sub-sublicenses granted by LICENSEE or any sublicense hereunder, LICENSEE shall include a requirement that the sublicensee use efforts consistent with those required
to be used by LICENSEE hereunder to bring the subject matter of the sublicense into commercial use as quickly as is reasonably possible to the extent required hereunder. LICENSEE shall further provide
in such sublicense agreements that such sublicenses are subject and subordinate to the applicable terms and conditions of this Agreement, as amended, and shall contain, among other things, all
provisions necessary to ensure LICENSEEs ability to perform its obligations under this Agreement and a clause substantially the same as the provisions of Paragraph 10.5 that shall also state
that the INDEMNITEES and/or HHMI INDEMNITEES (as appropriate depending on which PATENT RIGHTS are sublicensed) are intended third party beneficiaries of such sublicense agreement for the purpose of
enforcing such indemnification and insurance provisions. Copies of all sublicense agreements shall be provided promptly to HARVARD; provided that, LICENSEE may redact such sublicense agreements to
omit confidential portions of such sublicense agreements (but shall not redact any such agreement so as to prevent HARVARD from confirming compliance by LICENSEE hereunder or reasonably exercise its
rights under Paragraph 3.1 to approve such sublicenses)." 

	(g)
	Paragraph 4.4
is hereby amended to add the following: 

"In
the event that LICENSEE receives Sublicense Income with respect to a sublicensee's achievement of any milestone listed in this Section 4.4, amounts paid by LICENSEE to HARVARD under
Section 4.5
on account of such Sublicense Income shall be creditable against any amounts payable by LICENSEE to HARVARD under Section 4.4 with respect to such milestone." 

	(h)
	New
Paragraph 4.8 is hereby added, as follows: 

"With
respect to PATENT RIGHTS included in Appendix A as of the effective date of this Agreement, the parties agree that the relative valuation of such PATENT RIGHTS, on a
case-by-case basis using the HARVARD Case Numbers indicated in Exhibit A are as follows unless modified  per Section 7.3: 

	HARVARD Case No.
 
	 	Relative Valuation (%)

	1960	 	10
	2210	 	30
	2288	 	25
	2360	 	10
	2361	 	25

	(i)
	New
Paragraph 4.9 is hereby added, as follows: 

"With
respect to PATENT RIGHTS added to Appendix A pursuant to Amendment No. 2 to License Agreement, the parties agree that the relative valuation of such PATENT RIGHTS, 

on
a case-by-case basis using the HARVARD Case Numbers indicated in Exhibit A are as follows unless modified  per Section 7.3: 

	HARVARD Case No.
 
	 	Relative Valuation (%)
	 
	2439	 	90	 
	2445	 	10	"

	(j)
	New
Paragraph 4.10 is hereby added, as follows: 

"It
is understood and acknowledged by the parties that the relative valuations of HARVARD Cases within PATENT RIGHTS set forth in Paragraph 4.8 of this Agreement are applicable to the fair
allocation among such Cases of amounts paid by LICENSEE to HARVARD pursuant to each of Paragraphs 4.1 and 4.3 and of any equity in LICENSEE transferred to HARVARD pursuant to Paragraph 4.7 and
any proceeds of the sale thereof, but not of amounts paid by LICENSEE to HARVARD pursuant to any of Paragraphs 4.2, 4.4 and 4.5, to which the provisions of Paragraph 4.12 instead shall apply." 

	(k)
	New
Paragraph 4.11 is hereby added, as follows: 

"(a)
It is understood and acknowledged by the parties that the relative valuations of HARVARD Cases within PATENT RIGHTS set forth in Paragraph 4.9 of this Agreement are applicable to the fair
allocation among such Cases of amounts, other than reimbursement for patent costs, paid by LICENSEE to HARVARD as partial consideration for the second amendment of this Agreement and to the difference
between amounts due under Paragraph 4.3 of the Agreement as originally executed and those due under Paragraph 4.3 as amended pursuant to Amendment No. 2 to License Agreement, but
not to any amounts paid by LICENSEE to HARVARD pursuant to any of Paragraphs 4.2, 4.4 and 4.5, to which the provisions of Paragraph 4.12 instead shall apply. 

(b)
It is further understood and acknowledged by the parties that no portion of any amount paid by LICENSEE to HARVARD pursuant to Paragraph 4.1 or of any equity in LICENSEE transferred to
HARVARD pursuant to Paragraph 4.7 or of the proceeds of the sale thereof is attributable to either of HARVARD Case Nos. 2439 or 2445." 

	(l)
	New
Paragraph 4.12 is hereby added, as follows: 

"(a)
LICENSEE shall identify to HARVARD the HARVARD Cases within PATENT RIGHTS that cover each LICENSED PRODUCT and shall inform HARVARD of the relative contribution of each such Case to the LICENSED
PRODUCT that it covers as determined by LICENSEE in good faith in its discretion, so as to enable HARVARD to allocate fairly among such Cases any amounts paid by LICENSEE as royalties on NET SALES
pursuant to Paragraph 4.2 of this Agreement or as milestone payments pursuant to Paragraph 4.4 of this Agreement. 

(b)
LICENSEE shall identify to HARVARD the HARVARD Cases within PATENT RIGHTS that are the subject of each SUBLICENSE so that HARVARD can allocate fairly among such Cases any share of SUBLICENSE
INCOME paid by LICENSEE to HARVARD pursuant to Paragraph 4.5 of this Agreement." 

	(m)
	Exhibit A is hereby amended to read as per the attached.

	(n)
	New
Paragraph 5.8 is hereby added, as follows: 

"Notwithstanding
anything to the contrary contained in this Agreement, HARVARD shall have the right to share with MGH and HHMI any and all reports and other information provided to HARVARD by LICENSEE
pursuant to this Article V or by LICENSEE and/or HARVARD's accountant pursuant to Article VI of this Agreement." 

	(o)
	The
second Paragraph 9.5 is hereby renumbered as Paragraph 9.6 and shall read as follows: 

"Paragraphs
6.1, 6.2, 6.3, 7.1, 8.5, 9.4, 9.5, 9.6, 10.2, 10.3, 10.5, 10.6, 10.8, 10.9 and 10.17 of this Agreement shall survive termination." 

	(p)
	Paragraph 10.1
is hereby deleted in its entirety and replaced with the following: 

"Neither
HARVARD nor MGH warrants the validity of the PATENT RIGHTS licensed hereunder or makes any representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that such
PATENT RIGHTS or the KNOW-HOW may be exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing other patents." 

	(q)
	Paragraph 10.2
is hereby deleted in its entirety and replaced with the following: 

"HARVARD
AND MGH EXPRESSLY DISCLAIM ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS,
KNOW-HOW OR INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. Further, neither HARVARD nor MGH has made an investigation and makes
any representation that any materials supplied by it or the method used in making or using such materials are free from liability for patent infringement." 

	(r)
	Paragraph 10.3
is hereby deleted in its entirety and replaced with the following: 

"IN
NO EVENT SHALL HARVARD OR MGH BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS OR EXPECTED SAVINGS OR OTHER
ECONOMIC LOSSES, OR FOR INJURY TO PERSONS OR PROPERTY) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER, REGARDLESS WHETHER HARVARD OR MGH KNOWS OR SHOULD KNOW OF THE
POSSIBILITY OF SUCH DAMAGES. EACH OF HARVARD'S AND MGH'S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO THIS AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID TO IT UNDER
OR AS A RESULT OF THIS AGREEMENT. The foregoing exclusions and limitations shall apply to all claims and actions of any kind, whether based on contract, tort (including but not limited to negligence),
or any other grounds." 

	(s)
	Subparagraph
10.5(a) is hereby redesignated Subparagraph 10.5(a)(i) and amended such that each reference therein to "this Section" or "this Section 10.4" is replaced
with "this Subparagraph 10.5(a)(i)."

	(t)
	New
Subparagraph 10.5(a)(ii) is hereby added, as follows: 

"LICENSEE
shall indemnify, defend by counsel reasonably acceptable to HHMI and hold harmless HHMI and its current and former trustees, officers, employees, and agents (collectively, the "HHMI
INDEMNITEES"), from and against any claim, liability, cost, expense, damage, deficiency, loss or obligation of any kind or nature (including, without limitation, reasonable attorney's fees and other
costs and expenses of litigation) (collectively, "Claims"), based upon, arising out of, or otherwise relating to this Agreement, including without limitation any cause of action relating to product
liability." 

	(u)
	Subparagraph
10.5(c) is hereby deleted and replaced in its entirety with the following: 

"Beginning
at the time any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a sublicensee,
AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than $2,000,000 per incident and
$2,000,000 annual aggregate and naming the INDEMNITEES and 

HHMI
1NDEMNITEES as additional insureds. During clinical trials of any such product, process or service, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability
insurance in such equal or lesser amount as HARVARD shall require consistent with its internal policies, naming the INDEMNITEES and HHMI INDEMNITEES as additional insureds. Such commercial general
liability insurance shall provide: (i) product liability coverage; and (ii) broad form contractual liability coverage for LICENSEE's indemnification under this Agreement. If LICENSEE
elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of $250,000 annual aggregate) such self-insurance
program must be acceptable to HARVARD and the Risk Management Foundation of the Harvard Medical Institutions, Inc. in their reasonable discretion. The minimum amounts of insurance coverage
required shall not be construed to create a limit of LICENSEE's liability with respect to its indemnification under this Agreement." 

	(v)
	Paragraph 10.6
is hereby deleted and replaced in its entirety with the following: 

"LICENSEE
shall not use HARVARD's, MGH's or HHMI's name or insignia, or any adaptation of them, or the name of any of HARVARD's, MHG's or HHMI's inventors or employees in any advertising, promotional
or sales literature without the prior written approval of HARVARD, MGH or HHMI, as applicable." 

	(w)
	Paragraph 10.9
is hereby deleted and replaced in its entirety with the following: 

"LICENSEE
shall comply with all applicable laws and regulations. In particular, it is understood and acknowledged that the transfer of certain commodities and technical data is subject to United
States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and
regulations among other things, prohibit or require a license for the export of certain types of technical data to certain specified countries. LICENSEE hereby agrees and gives written assurance that
it will comply with all United States laws and regulations controlling the export of commodities and technical data, that it will be solely responsible for any violation of such by LICENSEE or its
AFFILIATES or sublicensees, and that it will defend and hold HARVARD, MGH and HHMI harmless in the event of any legal action of any nature occasioned by such violation." 

	(x)
	Paragraph 10.13
is hereby deleted and replaced in its entirety with the following: 

"In
the event of any controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof, the parties shall try to settle such conflict amicably between
themselves. Subject to the limitations stated in the final two sentences of this Paragraph 10.13, any such conflict which the parties are unable to resolve promptly shall be settled through
arbitration conducted in accordance with the rules of the American Arbitration Association. The demand for arbitration shall be filed within a reasonable time after the controversy or claim has
arisen, and in no event after the date upon which institution of legal proceedings based on such controversy or claim would be barred by the applicable statute of limitation. Such arbitration shall be
held in Boston, Massachusetts. The award through arbitration shall be final and binding. Either party may enter any such award in a court having jurisdiction or may make application to such court for
judicial acceptance of the award and an order of enforcement, as the case may be. Notwithstanding the foregoing, any party may, without recourse to arbitration, assert against another party a
third-party claim or cross-claim in any action brought by a third party, to which the subject matter of this Agreement may be relevant. Notwithstanding anything in this Paragraph 10.13 to the
contrary, arbitrations of any disputes affecting the rights or property of HHMI shall be nonbinding." 

	(y)
	New
Paragraph 10.17 is hereby added, as follows: 

"The
parties acknowledge and agree that HHM1 is not a party to this Agreement and has no liability to any LICENSEE, AFFILIATE of LICENSEE, a sublicensee or any user of any 

technology
covered by this Agreement, but HHMI is an intended third-party beneficiary of this Agreement and certain of its provisions are for the benefit of HHMI and are enforceable by HHMI in its own
name." 

	(z)
	In
partial consideration for this Amendment No. 2 and the rights granted to LICENSEE hereunder with respect to the inventions described and claimed in Harvard Case Nos. 2439
and 2445:

	(i)
	Within
fifteen (15) days of the date of this Amendment No. 2:

	A.
	LICENSEE
shall pay to HARVARD a non-cancellable, non-refundable, non-creditable fee of ten thousand U.S. dollars (U.S. $10,000), and

	B.
	LICENSEE
shall reimburse HARVARD for all costs accrued through the date of this Amendment No. 2 for the preparation, filing, prosecution and maintenance of PATENT RIGHTS that
cover Harvard Case Nos. 2439 and 2445;

	(ii)
	Paragraph 4.3
is hereby deleted and replaced in its entirety with the following: 

"No
later than each of the anniversaries of the effective date of this Agreement specified below, LICENSEE shall pay to HARVARD a non-refundable license maintenance royalty and/or advance
on royalties equal to the amount for the applicable anniversary specified below. Such payments may be credited against running royalties due for that calendar year and Royalty Reports shall reflect
such a credit. Such payments shall not be credited against milestone payments (if any) nor against royalties due for any subsequent calendar year. 

	Anniversary
 
	 	Amount

	2nd	 	$	25,000
	3rd through 5th	 	$	30,000
	6th through 10th	 	$	60,000
	11th and all subsequent	 	$	85,000

For
allocation purposes, the parties agree that [*] of the total payment due on the 3rd through 5th anniversaries shall be attributable to the
PATENT RIGHTS added under this Amendment No. 2, and that [*] of the total payment due on the 6th anniversary and all subsequent anniversaries shall be
attributable to the PATENT RIGHTS added under this Amendment No. 2." 

        2.    Definitions.    Capitalized terms used in this Amendment No. 2 that are not otherwise defined herein
shall have the meanings set forth in the License Agreement. 

        3.    General.    All other terms and conditions of the License Agreement, as amended by Amendment No. 1, shall
remain unchanged and in full force and effect. 

Signatures
appear on next page. 

IN
WITNESS WHEREOF, the parties have executed this Amendment No. 2 as of the date first set forth above. 

For:  

	PRESIDENT AND FELLOWS OF

HARVARD COLLEGE	 	SIRTRIS PHARMACEUTICALS, INC.
	

/s/  ISAAC T. KOHLBERG      
 Senior Associate Provost

Chief Technology Development Officer

Office of Technology Development

Harvard University	
 	

/s/  GAREN BOHLIN      
 Garen Bohlin

Chief Operating Officer
	

THE GENERAL HOSPITAL

CORPORATION D/B/A

MASSACHUSETTS GENERAL HOSPITAL	
 	

 
	

/s/  REBECCA MENAPACE      
 Rebecca Menapace, MBA

Associate Director

Corporate Sponsored Research and Licensing	
 	

 

EXHIBIT A

[*]

QuickLinks

Exhibit 10.20Exhibit 4.1

 

Execution Copy

 

 

 

 

INDENTURE
 

Dated as of November 3, 2006

Among

ENCORE MEDICAL FINANCE LLC,

ENCORE MEDICAL FINANCE CORP.,

THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

and

THE BANK OF NEW YORK, a New York banking corporation,

 

as Trustee

113⁄4% SENIOR SUBORDINATED NOTES DUE 2014

 

 

 

 

CROSS-REFERENCE TABLE*

 

	
  Trust Indenture Act 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)

  	
   

  	
  7.10

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.05

  
	
   

  	
  (b)

  	
   

  	
  14.03

  
	
   

  	
  (c)

  	
   

  	
  14.03

  
	
  313

  	
  (a)

  	
   

  	
  7.06

  
	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (b)(2)

  	
   

  	
  7.06;7.07

  
	
   

  	
  (c)

  	
   

  	
  7.06;14.02

  
	
   

  	
  (d)

  	
   

  	
  7.06

  
	
  314

  	
  (a)

  	
   

  	
  4.03;14.02; 14.05

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
   

  	
  14.04

  
	
   

  	
  (c)(2)

  	
   

  	
  14.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  14.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.01

  
	
   

  	
  (b)

  	
   

  	
  7.05;14.02

  
	
   

  	
  (c)

  	
   

  	
  7.01

  
	
   

  	
  (d)

  	
   

  	
  7.01

  
	
   

  	
  (e)

  	
   

  	
  6.14

  
	
  316

  	
  (a)(last
  sentence)

  	
   

  	
  2.09

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07

  
	
   

  	
  (c)

  	
   

  	
  2.12;9.04

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.12

  
	
   

  	
  (b)

  	
   

  	
  2.04

  
	
  318

  	
  (a)

  	
   

  	
  14.01

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  14.01

  

 

N.A.
means not applicable.

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

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.02

  	
   

  	
  Other
  Definitions

  	
   

  	
  29

  
	
  Section 1.03

  	
   

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  	
  30

  
	
  Section 1.04

  	
   

  	
  Rules of
  Construction

  	
   

  	
  31

  
	
  Section 1.05

  	
   

  	
  Acts of
  Holders

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE NOTES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01

  	
   

  	
  Form and
  Dating; Terms

  	
   

  	
  33

  
	
  Section 2.02

  	
   

  	
  Execution
  and Authentication

  	
   

  	
  34

  
	
  Section 2.03

  	
   

  	
  Registrar
  and Paying Agent

  	
   

  	
  35

  
	
  Section 2.04

  	
   

  	
  Paying Agent
  to Hold Money in Trust

  	
   

  	
  35

  
	
  Section 2.05

  	
   

  	
  Holder Lists

  	
   

  	
  35

  
	
  Section 2.06

  	
   

  	
  Transfer and
  Exchange

  	
   

  	
  35

  
	
  Section 2.07

  	
   

  	
  Replacement
  Notes

  	
   

  	
  47

  
	
  Section 2.08

  	
   

  	
  Outstanding
  Notes

  	
   

  	
  47

  
	
  Section 2.09

  	
   

  	
  Treasury
  Notes

  	
   

  	
  48

  
	
  Section 2.10

  	
   

  	
  Temporary
  Notes

  	
   

  	
  48

  
	
  Section 2.11

  	
   

  	
  Cancellation

  	
   

  	
  48

  
	
  Section 2.12

  	
   

  	
  Defaulted
  Interest

  	
   

  	
  48

  
	
  Section 2.13

  	
   

  	
  CUSIP and
  ISIN Numbers

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REDEMPTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01

  	
   

  	
  Notices to
  Trustee

  	
   

  	
  49

  
	
  Section 3.02

  	
   

  	
  Selection of
  Notes to Be Redeemed or Purchased

  	
   

  	
  49

  
	
  Section 3.03

  	
   

  	
  Notice of
  Redemption

  	
   

  	
  50

  
	
  Section 3.04

  	
   

  	
  Effect of
  Notice of Redemption

  	
   

  	
  51

  
	
  Section 3.05

  	
   

  	
  Deposit of
  Redemption or Purchase Price

  	
   

  	
  51

  
	
  Section 3.06

  	
   

  	
  Notes
  Redeemed or Purchased in Part

  	
   

  	
  51

  
	
  Section 3.07

  	
   

  	
  Optional
  Redemption

  	
   

  	
  51

  
	
  Section 3.08

  	
   

  	
  Mandatory
  Redemption

  	
   

  	
  52

  
	
  Section 3.09

  	
   

  	
  Offers to
  Repurchase by Application of Excess Proceeds

  	
   

  	
  52

  
									

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01

  	
   

  	
  Payment of
  Notes

  	
   

  	
  54

  
	
  Section 4.02

  	
   

  	
  Maintenance
  of Office or Agency

  	
   

  	
  55

  
	
  Section 4.03

  	
   

  	
  Reports and
  Other Information

  	
   

  	
  55

  
	
  Section 4.04

  	
   

  	
  Compliance
  Certificate

  	
   

  	
  56

  
	
  Section 4.05

  	
   

  	
  Taxes

  	
   

  	
  56

  
	
  Section 4.06

  	
   

  	
  Stay,
  Extension and Usury Laws

  	
   

  	
  57

  
	
  Section 4.07

  	
   

  	
  Limitation
  on Restricted Payments

  	
   

  	
  57

  
	
  Section 4.08

  	
   

  	
  Dividend and
  Other Payment Restrictions Affecting Restricted Subsidiaries

  	
   

  	
  63

  
	
  Section 4.09

  	
   

  	
  Limitation
  on Incurrence of Indebtedness and Issuance of Disqualified Stock and
  Preferred Stock

  	
   

  	
  65

  
	
  Section 4.10

  	
   

  	
  Asset Sales

  	
   

  	
  70

  
	
  Section 4.11

  	
   

  	
  Transactions
  with Affiliates

  	
   

  	
  72

  
	
  Section 4.12

  	
   

  	
  Liens

  	
   

  	
  74

  
	
  Section 4.13

  	
   

  	
  Corporate
  Existence

  	
   

  	
  74

  
	
  Section 4.14

  	
   

  	
  Offer to
  Repurchase Upon Change of Control

  	
   

  	
  75

  
	
  Section 4.15

  	
   

  	
  Limitation
  on Guarantees of Indebtedness by Restricted Subsidiaries

  	
   

  	
  76

  
	
  Section 4.16

  	
   

  	
  Limitation
  on Layering

  	
   

  	
  77

  
	
  Section 4.17

  	
   

  	
  Limitation
  on Business Activities of the Co-Issuer

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUCCESSORS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01

  	
   

  	
  Merger,
  Consolidation or Sale of All or Substantially All Assets

  	
   

  	
  78

  
	
  Section 5.02

  	
   

  	
  Successor
  Corporation Substituted

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEFAULTS AND REMEDIES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01

  	
   

  	
  Events of
  Default

  	
   

  	
  81

  
	
  Section 6.02

  	
   

  	
  Acceleration

  	
   

  	
  82

  
	
  Section 6.03

  	
   

  	
  Other
  Remedies

  	
   

  	
  83

  
	
  Section 6.04

  	
   

  	
  Waiver of
  Past Defaults

  	
   

  	
  84

  
	
  Section 6.05

  	
   

  	
  Control by
  Majority

  	
   

  	
  84

  
	
  Section 6.06

  	
   

  	
  Limitation
  on Suits

  	
   

  	
  84

  
	
  Section 6.07

  	
   

  	
  Rights of
  Holders of Notes to Receive Payment

  	
   

  	
  84

  
	
  Section 6.08

  	
   

  	
  Collection
  Suit by Trustee

  	
   

  	
  85

  
	
  Section 6.09

  	
   

  	
  Restoration
  of Rights and Remedies

  	
   

  	
  85

  
	
  Section 6.10

  	
   

  	
  Rights and
  Remedies Cumulative

  	
   

  	
  85

  
	
  Section 6.11

  	
   

  	
  Delay or
  Omission Not Waiver

  	
   

  	
  85

  
	
  Section 6.12

  	
   

  	
  Trustee May
  File Proofs of Claim

  	
   

  	
  85

  
	
  Section 6.13

  	
   

  	
  Priorities

  	
   

  	
  86

  
	
  Section 6.14

  	
   

  	
  Undertaking
  for Costs

  	
   

  	
  86

  
							

 

ii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TRUSTEE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01

  	
   

  	
  Duties of
  Trustee

  	
   

  	
  87

  
	
  Section 7.02

  	
   

  	
  Rights of
  Trustee

  	
   

  	
  88

  
	
  Section 7.03

  	
   

  	
  Individual
  Rights of Trustee

  	
   

  	
  89

  
	
  Section 7.04

  	
   

  	
  Trustee’s
  Disclaimer

  	
   

  	
  89

  
	
  Section 7.05

  	
   

  	
  Notice of
  Defaults

  	
   

  	
  89

  
	
  Section 7.06

  	
   

  	
  Reports by
  Trustee to Holders of the Notes

  	
   

  	
  89

  
	
  Section 7.07

  	
   

  	
  Compensation
  and Indemnity

  	
   

  	
  90

  
	
  Section 7.08

  	
   

  	
  Replacement
  of Trustee

  	
   

  	
  90

  
	
  Section 7.09

  	
   

  	
  Successor
  Trustee by Merger, etc

  	
   

  	
  91

  
	
  Section 7.10

  	
   

  	
  Eligibility;
  Disqualification

  	
   

  	
  91

  
	
  Section 7.11

  	
   

  	
  Preferential
  Collection of Claims Against Issuers

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01

  	
   

  	
  Option to
  Effect Legal Defeasance or Covenant Defeasance

  	
   

  	
  92

  
	
  Section 8.02

  	
   

  	
  Legal
  Defeasance and Discharge

  	
   

  	
  92

  
	
  Section 8.03

  	
   

  	
  Covenant
  Defeasance

  	
   

  	
  92

  
	
  Section 8.04

  	
   

  	
  Conditions
  to Legal or Covenant Defeasance

  	
   

  	
  93

  
	
  Section 8.05

  	
   

  	
  Deposited
  Money and Government Securities to Be Held in Trust; Other Miscellaneous
  Provisions

  	
   

  	
  94

  
	
  Section 8.06

  	
   

  	
  Repayment to
  Issuers

  	
   

  	
  95

  
	
  Section 8.07

  	
   

  	
  Reinstatement

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMENDMENT, SUPPLEMENT AND WAIVER

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01

  	
   

  	
  Without
  Consent of Holders of Notes

  	
   

  	
  95

  
	
  Section 9.02

  	
   

  	
  With Consent
  of Holders of Notes

  	
   

  	
  97

  
	
  Section 9.03

  	
   

  	
  Compliance
  with Trust Indenture Act

  	
   

  	
  98

  
	
  Section 9.04

  	
   

  	
  Revocation
  and Effect of Consents

  	
   

  	
  98

  
	
  Section 9.05

  	
   

  	
  Notation on
  or Exchange of Notes

  	
   

  	
  99

  
	
  Section 9.06

  	
   

  	
  Trustee to
  Sign Amendments, etc

  	
   

  	
  99

  
	
  Section 9.07

  	
   

  	
  Payment for
  Consent

  	
   

  	
  99

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUBORDINATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.01

  	
   

  	
  Agreement To
  Subordinate

  	
   

  	
  99

  
	
  Section
  10.02

  	
   

  	
  Liquidation,
  Dissolution, Bankruptcy

  	
   

  	
  99

  
	
  Section
  10.03

  	
   

  	
  Default on
  Senior Indebtedness of the Issuers

  	
   

  	
  100

  
	
  Section
  10.04

  	
   

  	
  Acceleration
  of Payment of Notes

  	
   

  	
  101

  
	
  Section
  10.05

  	
   

  	
  When
  Distribution Must Be Paid Over

  	
   

  	
  101

  
							

 

iii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.06

  	
   

  	
  Subrogation

  	
   

  	
  101

  
	
  Section
  10.07

  	
   

  	
  Relative
  Rights

  	
   

  	
  101

  
	
  Section
  10.08

  	
   

  	
  Subordination
  May Not Be Impaired by Issuers

  	
   

  	
  102

  
	
  Section
  10.09

  	
   

  	
  Rights of
  Trustee and Paying Agent

  	
   

  	
  102

  
	
  Section
  10.10

  	
   

  	
  Distribution
  or Notice to Representative

  	
   

  	
  102

  
	
  Section
  10.11

  	
   

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

  	
   

  	
  102

  
	
  Section
  10.12

  	
   

  	
  Trust Moneys
  Not Subordinated

  	
   

  	
  102

  
	
  Section
  10.13

  	
   

  	
  Trustee
  Entitled To Rely

  	
   

  	
  103

  
	
  Section
  10.14

  	
   

  	
  Trustee To
  Effectuate Subordination

  	
   

  	
  103

  
	
  Section
  10.15

  	
   

  	
  Trustee Not
  Fiduciary for Holders of Senior Indebtedness of the Issuers

  	
   

  	
  103

  
	
  Section
  10.16

  	
   

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

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GUARANTEES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  11.01

  	
   

  	
  Guarantee

  	
   

  	
  104

  
	
  Section
  11.02

  	
   

  	
  Limitation
  on Guarantor Liability

  	
   

  	
  105

  
	
  Section
  11.03

  	
   

  	
  Execution
  and Delivery

  	
   

  	
  106

  
	
  Section
  11.04

  	
   

  	
  Subrogation

  	
   

  	
  106

  
	
  Section
  11.05

  	
   

  	
  Benefits
  Acknowledged

  	
   

  	
  106

  
	
  Section
  11.06

  	
   

  	
  Release of
  Guarantees

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUBORDINATION OF GUARANTEES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  12.01

  	
   

  	
  Agreement To
  Subordinate

  	
   

  	
  107

  
	
  Section
  12.02

  	
   

  	
  Liquidation,
  Dissolution, Bankruptcy

  	
   

  	
  107

  
	
  Section
  12.03

  	
   

  	
  Default on
  Senior Indebtedness of a Guarantor

  	
   

  	
  107

  
	
  Section
  12.04

  	
   

  	
  Demand for
  Payment

  	
   

  	
  109

  
	
  Section
  12.05

  	
   

  	
  When
  Distribution Must Be Paid Over

  	
   

  	
  109

  
	
  Section
  12.06

  	
   

  	
  Subrogation

  	
   

  	
  109

  
	
  Section
  12.07

  	
   

  	
  Relative
  Rights

  	
   

  	
  109

  
	
  Section 12.08

  	
   

  	
  Subordination
  May Not Be Impaired by a Guarantor

  	
   

  	
  110

  
	
  Section
  12.09

  	
   

  	
  Rights of
  Trustee and Paying Agent

  	
   

  	
  110

  
	
  Section
  12.10

  	
   

  	
  Distribution
  or Notice to Representative

  	
   

  	
  110

  
	
  Section
  12.11

  	
   

  	
  Article 12
  Not To Prevent Events of Default or Limit Right To Demand Payment

  	
   

  	
  110

  
	
  Section
  12.12

  	
   

  	
  Trust Moneys
  Not Subordinated

  	
   

  	
  110

  
	
  Section
  12.13

  	
   

  	
  Trustee
  Entitled To Rely

  	
   

  	
  111

  
	
  Section
  12.14

  	
   

  	
  Trustee To
  Effectuate Subordination

  	
   

  	
  111

  
	
  Section
  12.15

  	
   

  	
  Trustee Not
  Fiduciary for Holders of Senior Indebtedness of Guarantors

  	
   

  	
  111

  
	
  Section
  12.16

  	
   

  	
  Reliance by
  Holders of Senior Indebtedness of a Guarantor on Subordination Provisions

  	
   

  	
  111

  
							

 

iv

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  13.01

  	
   

  	
  Satisfaction
  and Discharge

  	
   

  	
  112

  
	
  Section
  13.02

  	
   

  	
  Application
  of Trust Money

  	
   

  	
  113

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  14.01

  	
   

  	
  Trust
  Indenture Act Controls

  	
   

  	
  113

  
	
  Section
  14.02

  	
   

  	
  Notices

  	
   

  	
  113

  
	
  Section
  14.03

  	
   

  	
  Communication
  by Holders of Notes with Other Holders of Notes

  	
   

  	
  114

  
	
  Section
  14.04

  	
   

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  	
  114

  
	
  Section
  14.05

  	
   

  	
  Statements
  Required in Certificate or Opinion

  	
   

  	
  115

  
	
  Section
  14.06

  	
   

  	
  Rules by
  Trustee and Agents

  	
   

  	
  115

  
	
  Section
  14.07

  	
   

  	
  No Personal
  Liability of Directors, Officers, Employees and Stockholders

  	
   

  	
  115

  
	
  Section
  14.08

  	
   

  	
  Governing
  Law

  	
   

  	
  115

  
	
  Section
  14.09

  	
   

  	
  Waiver of
  Jury Trial

  	
   

  	
  115

  
	
  Section
  14.10

  	
   

  	
  Force
  Majeure

  	
   

  	
  115

  
	
  Section
  14.11

  	
   

  	
  No Adverse
  Interpretation of Other Agreements

  	
   

  	
  116

  
	
  Section
  14.12

  	
   

  	
  Successors

  	
   

  	
  116

  
	
  Section
  14.13

  	
   

  	
  Severability

  	
   

  	
  116

  
	
  Section
  14.14

  	
   

  	
  Counterpart
  Originals

  	
   

  	
  116

  
	
  Section
  14.15

  	
   

  	
  Table of
  Contents, Headings, etc

  	
   

  	
  116

  
	
  Section
  14.16

  	
   

  	
  Qualification
  of Indenture

  	
   

  	
  116

  
							

 

EXHIBITS

 

	
  Exhibit A

  	
   

  	
  Form of Note

  
	
  Exhibit B

  	
   

  	
  Form of Certificate of
  Transfer

  
	
  Exhibit C

  	
   

  	
  Form of Certificate of
  Exchange

  
	
  Exhibit D

  	
   

  	
  Form of Supplemental
  Indenture to Be Delivered by Subsequent Guarantors

  

 

v

 

INDENTURE, dated as of November 3, 2006, among Encore Medical Finance
LLC, a Delaware limited liability company (the “Company”), Encore
Medical Finance Corp., a Delaware corporation wholly owned by the Company (the “Co-Issuer”
and, together with the Company, the “Issuers”), the Guarantors (as
defined herein) listed on the signature pages hereto and The Bank of New York,
a New York banking corporation, as Trustee.

 

W  I  T
N  E  S  S  E  T  H

 

WHEREAS, the Issuers have duly authorized the creation of an issue of $200,000,000
aggregate principal amount of 113⁄4% Senior Subordinated Notes due 2014 (the “Initial
Notes”);

 

WHEREAS, as a result of the Transaction (as defined herein), the
Issuers will be jointly and severally liable for all obligations under the
Notes; and

 

WHEREAS, each of the Issuers and each of the Guarantors has duly
authorized the execution and delivery of this Indenture.

NOW, THEREFORE, each of the Issuers, the Guarantors and the Trustee
agree as follows for the benefit of each other and for the equal and ratable
benefit of the Holders of the Notes.

 

ARTICLE
1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section
1.01              Definitions.

 

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

 

“Acquired Indebtedness” means, with respect
to any specified Person,

 

(1)           Indebtedness of any
other Person existing at the time such other Person is merged with or into or
became a Restricted Subsidiary of such specified Person, including Indebtedness
incurred in connection with, or in contemplation of, such other Person merging
with or into or becoming a Restricted Subsidiary of such specified Person, and

 

(2)           Indebtedness secured
by a Lien encumbering any asset acquired by such specified Person.

 

“Acquisition” means the transactions contemplated by the
Transaction Agreement.

 

“Additional Interest” means all additional
interest then owing pursuant to the Registration Rights Agreement.

 

“Additional Notes” means additional Notes (other than the
Initial Notes and other than Exchange Notes for such Initial Notes) issued from
time to time under this Indenture in accordance with Sections 2.01 and 4.09
hereof.

 

 

“Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. 
For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under common control
with”), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise.

 

“Agent” means any Registrar or Paying Agent.

 

“Applicable
Premium” means, with respect to any Note on any Redemption Date, the
greater of:

 

(1)           1.0% of the
principal amount of such Note; and

 

(2)           the excess, if any,
of (a) the present value at such Redemption Date of (i) the redemption
price of such Note at November 15, 2010 (each such redemption price being set
forth in Section 3.07(d) hereof), plus (ii) all required interest payments due
on such Note through November 15, 2010 (excluding accrued but unpaid interest
to the Redemption Date), computed using a discount rate equal to the Treasury
Rate as of such Redemption Date plus 50 basis points; over (b) the principal
amount of such Note.

 

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

 

“Asset Sale” means:

 

(1)           the sale,
conveyance, transfer or other disposition, whether in a single transaction or a
series of related transactions, of property or assets (including by way of a
Sale and Lease-Back Transaction) of the Company or any of its Restricted
Subsidiaries (each referred to in this definition as a “disposition”);
or

 

(2)           the issuance or sale
of Equity Interests of any Restricted Subsidiary (other than Preferred Stock of
Restricted Subsidiaries issued in compliance with Section 4.09 hereof), whether
in a single transaction or a series of related transactions;

 

in each case, other than:

 

(a)           any disposition of
Cash Equivalents or Investment Grade Securities or obsolete or worn out
equipment in the ordinary course of business or any disposition of inventory or
goods (or other assets) held for sale in the ordinary course of business;

 

(b)           the disposition of
all or substantially all of the assets of the Company governed by, and in a
manner permitted pursuant to the provisions described under Section 5.01 hereof
or any disposition that constitutes a Change of Control pursuant to this Indenture;

 

(c)           the making of any
Restricted Payment or Permitted Investment that is permitted to be made, and is
made, under Section 4.07 hereof;

 

2

 

(d)           any disposition of
assets or issuance or sale of Equity Interests of any Restricted Subsidiary in
any transaction or series of transactions with an aggregate fair market value
of less than $5.0 million;

 

(e)           any disposition of
property or assets or issuance of securities by a Restricted Subsidiary of the Company
to the Company or by the Company or a Restricted Subsidiary of the Company to
another Restricted Subsidiary of the Company;

 

(f)            to the extent
allowable under Section 1031 of the Internal Revenue Code of 1986, or
comparable law or regulation, any exchange of like property (excluding any boot
thereon) for use in a Similar Business;

 

(g)           the lease,
assignment or sub-lease of any real or personal property in the ordinary
course of business;

 

(h)           any issuance or sale
of Equity Interests in, or Indebtedness or other securities of, an Unrestricted
Subsidiary;

 

(i)            foreclosures on
assets;

 

(j)            sales of accounts
receivable, or participations therein, in connection with any Receivables
Facility; and

 

(k)           any financing
transaction with respect to property built or acquired by the Company or any
Restricted Subsidiary after the Issue Date, including Sale and Lease-Back
Transactions and asset securitizations permitted by this Indenture.

 

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

 

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

 

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

 

“Capital Stock” means:

 

(1)           in the case of a
corporation, corporate stock;

 

(2)           in the case of an
association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock;

 

(3)           in the case of a
partnership or limited liability company, partnership or membership interests
(whether general or limited); and

 

(4)           any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.

 

“Capitalized Lease
Obligation” means, at the time any determination thereof is to be
made, the amount of the liability in respect of a capital lease that would at
such time be required to be capitalized and reflected as a liability on a
balance sheet (excluding the footnotes thereto) in accordance with GAAP.

 

3

 

“Cash Equivalents” means:

 

(1)           United States
dollars;

 

(2)           (a)           euro, or any national currency of any
participating member state of the EMU; or

 

(b)           such local currencies held by the Company or any Restricted
Subsidiary from time to time in the ordinary course of business;

 

(3)           securities issued or
directly and fully and unconditionally guaranteed or insured by the U.S.
government (or any agency or instrumentality thereof the securities of which
are unconditionally guaranteed as a full faith and credit obligation of the
U.S. government) with maturities of 24 months or less from the date of
acquisition;

 

(4)           certificates of
deposit, time deposits and eurodollar time deposits with maturities of one year
or less from the date of acquisition, bankers’ acceptances with maturities not
exceeding one year and overnight bank deposits, in each case with any
commercial bank having capital and surplus of not less than $500.0 million
in the case of U.S. banks and $100.0 million (or the U.S. dollar equivalent as
of the date of determination) in the case of non-U.S. banks;

 

(5)           repurchase
obligations for underlying securities of the types described in clauses (3) and
(4) entered into with any financial institution meeting the qualifications
specified in clause (4) above;

 

(6)           commercial paper
rated at least P-1 by Moody’s or at least A-1 by S&P and in
each case maturing within 24 months after the date of creation thereof;

 

(7)           marketable short-term
money market and similar securities having a rating of at least P-2 or A-2
from either Moody’s or S&P, respectively (or, if at any time neither Moody’s
nor S&P shall be rating such obligations, an equivalent rating from another
Rating Agency) and in each case maturing within 24 months after the date
of creation thereof;

 

(8)           investment funds
investing 95% of their assets in securities of the types described in clauses
(1) through (7) above;

 

(9)           readily marketable
direct obligations issued by any state, commonwealth or territory of the United
States or any political subdivision or taxing authority thereof having an
Investment Grade Rating from either Moody’s or S&P with maturities of
24 months or less from the date of acquisition;

 

(10)         Indebtedness or
Preferred Stock issued by Persons with a rating of “A” or higher from S&P
or “A2” or higher from Moody’s with maturities of 24 months or less from
the date of acquisition; and

 

(11)         Investments
with average maturities of 24 months or less from the date of acquisition in
money market funds rated AAA- (or the equivalent thereof) or better by S&P
or Aaa3 (or the equivalent thereof) or better by Moody’s.

 

Notwithstanding the foregoing, Cash Equivalents
shall include amounts denominated in currencies other than those set forth in
clauses (1) and (2) above, provided
that such amounts are converted 

 

4

 

into any currency listed in clauses (1) and (2)
as promptly as practicable and in any event within ten Business Days following
the receipt of such amounts.

 

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

 

(1)           the sale, lease or
transfer, in one or a series of related transactions, of all or substantially
all of the assets of the Company and its Subsidiaries, taken as a whole, to any
Person other than a Permitted Holder; or

 

(2)           the Company becomes
aware (by way of a report or any other filing pursuant to Section 13(d) of the
Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by
any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act, or any successor provision), including any group acting
for the purpose of acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the
Permitted Holders, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination or
purchase of beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act, or any successor provision) of 50% or more of the total
voting power of the Voting Stock of the Company or any of its direct or
indirect parent companies holding directly or indirectly 100% of the total
voting power of the Voting Stock of the Company.

 

“Clearstream” means Clearstream Banking, Société Anonyme.

 

“Co-Issuer” has the meaning set forth in the recitals hereto
until a successor Person shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Co-Issuer” shall mean such
successor Person.

 

“Company” has the meaning set forth in the recitals hereto until
a successor Person shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter “Company” shall mean such successor Person.

 

“Consolidated Depreciation
and Amortization Expense” means with respect to any Person for any
period, the total amount of depreciation and amortization expense, including
the amortization of deferred financing fees of such Person and its Restricted
Subsidiaries for such period on a consolidated basis and otherwise determined
in accordance with GAAP.

 

“Consolidated
Interest Expense” means, with respect to any Person for any period,
without duplication, the sum of:

 

(1)           consolidated
interest expense of such Person and its Restricted Subsidiaries for such
period, to the extent such expense was deducted (and not added back) in
computing Consolidated Net Income (including (a) amortization of original issue
discount resulting from the issuance of Indebtedness at less than par, (b) all
commissions, discounts and other fees and charges owed with respect to letters
of credit or bankers acceptances, (c) non-cash interest payments (but
excluding any non-cash interest expense attributable to the movement in
the mark to market valuation of Hedging Obligations or other derivative
instruments pursuant to GAAP), (d) the interest component of Capitalized Lease
Obligations, and (e) net payments, if any, pursuant to interest rate Hedging
Obligations with respect to Indebtedness and excluding (u) accretion or accrual
of discounted liabilities not constituting Indebtedness, (v) any expense
resulting from the discounting of any outstanding Indebtedness in connection
with the application of purchase accounting in connection with any acquisition,
(w) any Additional Interest , (x) amortization of deferred 

 

5

 

financing fees, debt issuance costs,
commissions, fees and expenses, (y) any expensing of bridge, commitment and
other financing fees and (z) commissions, discounts, yield and other fees and
charges (including any interest expense) related to any Receivables Facility);
plus

 

(2)           consolidated
capitalized interest of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued; less

 

(3)           interest income for
such period.

 

For purposes of this definition, interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by such Person to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP.

 

“Consolidated Net Income” means, with respect to any Person for
any period, the aggregate of the Net Income, of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, and otherwise determined
in accordance with GAAP; provided, however, that, without
duplication,

 

(1)           any after-tax
effect of extraordinary, non-recurring or unusual gains or losses (less
all fees and expenses relating thereto) or expenses (including relating to the
Transaction to the extent incurred on or prior to September 30, 2007),
severance, relocation costs and curtailments or modifications to pension and
post-retirement employee benefit plans and other restructuring costs shall be
excluded,

 

(2)           the cumulative
effect of a change in accounting principles during such period shall be
excluded,

 

(3)           any after-tax
effect of income (loss) from disposed, abandoned, transferred, closed or
discontinued operations and any net after-tax gains or losses on disposal
of disposed, abandoned, transferred, closed or discontinued operations shall be
excluded,

 

(4)           any after-tax
effect of gains or losses (less all fees and expenses relating thereto)
attributable to asset dispositions other than in the ordinary course of business,
as determined in good faith by the Company, shall be excluded,

 

(5)           the Net Income for
such period of any Person that is not a Subsidiary, or is an Unrestricted
Subsidiary, or that is accounted for by the equity method of accounting, shall
be excluded; provided
that Consolidated Net Income of the Company shall be increased by the amount of
dividends or distributions or other payments that are actually paid in cash (or
to the extent converted into cash) to the referent Person or a Restricted
Subsidiary thereof in respect of such period,

 

(6)           solely for the
purpose of determining the amount available for Restricted Payments under
clause (3)(a) of Section 4.07(a) hereof, the Net Income for such period of
any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of its Net Income is not at the date of determination
permitted without any prior governmental approval (which has not been obtained)
or, directly or indirectly, by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule, or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, unless
such restriction with respect to the payment of dividends or similar
distributions has been legally waived, provided that Consolidated Net Income of the Company will be
increased by the amount of dividends or other distributions 

 

6

 

or other payments actually paid in cash (or
to the extent converted into cash) or Cash Equivalents to the Company or a Restricted
Subsidiary thereof in respect of such period, to the extent not already
included therein,

 

(7)           effects of adjustments
(including the effects of such adjustments pushed down to the Company and its Restricted
Subsidiaries) in the property and equipment, inventory and other intangible
assets, deferred revenue and debt line items in such Person’s consolidated
financial statements pursuant to GAAP resulting from the application of
purchase accounting in relation to the Transaction or any consummated
acquisition or the amortization or write-off of any amounts thereof, net of
taxes, shall be excluded,

 

(8)           any after-tax
effect of income (loss) from the early extinguishment of Indebtedness or
Hedging Obligations or other derivative instruments shall be excluded,

 

(9)           any impairment
charge or asset write-off, in each case, pursuant to GAAP and the
amortization of intangibles arising pursuant to GAAP shall be excluded,

 

(10)         any non-cash
compensation expense recorded from grants of stock appreciation or similar
rights, stock options, restricted stock or other rights shall be excluded,

 

(11)         any fees and expenses
incurred during such period, or any amortization thereof for such period, in
connection with any acquisition, disposition, recapitalization, Investment,
Asset Sale, issuance or repayment of Indebtedness, issuance of Equity
Interests, refinancing transaction or amendment or modification of any debt
instrument (in each case, including any such transaction consummated prior to
the Issue Date and any such transaction undertaken but not completed) and any
charges or non-recurring merger costs incurred during such period as a result
of any such transaction shall be excluded, and

 

(12)         accruals and reserves
that are established or adjusted within twelve months after the Issue Date that
are so required to be established or adjusted as a result of the Transaction in
accordance with GAAP or changes as a result of a modification of accounting
policies shall be excluded.

 

Notwithstanding the foregoing, for the purpose of Section
4.07 hereof only (other than clause (3)(d) of Section 4.07(a) hereof), there
shall be excluded from Consolidated Net Income any income arising from any sale
or other disposition of Restricted Investments made by the Company and its Restricted
Subsidiaries, any repurchases and redemptions of Restricted Investments from
the Company and its Restricted Subsidiaries, any repayments of loans and
advances which constitute Restricted Investments by the Company or any of its
Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or
any distribution or dividend from an Unrestricted Subsidiary, in each case only
to the extent such amounts increase the amount of Restricted Payments permitted
under clause (3)(d) of Section 4.07(a) hereof.

 

“Contingent Obligations”
means, with respect to any Person, any obligation of such Person guaranteeing
any leases, dividends or other obligations that do not constitute Indebtedness
(“primary obligations”)
of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,

 

(1)           to purchase any such
primary obligation or any property constituting direct or indirect security
therefor,

 

7

 

(2)           to advance or supply funds

 

(a)           for the purchase or
payment of any such primary obligation, or

 

(b)           to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, or

 

(3)           to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation against loss in respect thereof.

 

“Corporate Trust Office of the Trustee” shall be at the address
of the Trustee specified in Section 14.02 hereof or such other address as to
which the Trustee may give notice to the Holders and the Issuers.

 

“Credit Facilities” means, with respect to the Company or any of
its Restricted Subsidiaries, one or more debt facilities, including the Senior
Credit Facilities, or other financing arrangements (including, without
limitation, commercial paper facilities or indentures) providing for revolving
credit loans, term loans, letters of credit or other long-term
indebtedness, including any notes, mortgages, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and any amendments,
supplements, modifications, extensions, renewals, restatements or refundings
thereof and any indentures or credit facilities or commercial paper facilities
that replace, refund or refinance any part of the loans, notes, other credit
facilities or commitments thereunder, including any such replacement, refunding
or refinancing facility or indenture that increases the amount permitted to be
borrowed thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under
Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or
guarantors thereunder and whether by the same or any other agent, lender or
group of lenders.

 

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

 

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

 

“Definitive Note” means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06(c)
hereof, substantially in the form of Exhibit A hereto, except that
such Note shall not bear the Global Note Legend and shall not have the “Schedule
of Exchanges of Interests in the Global Note” attached thereto.

 

“Depositary” means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the Notes, and any and all successors thereto
appointed as Depositary hereunder and having become such pursuant to the applicable
provision of this Indenture.

 

“Designated Non-cash
Consideration” means the fair market value of non-cash consideration
received by the Company or a Restricted Subsidiary in connection with an Asset
Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s
Certificate, setting forth the basis of such valuation, executed by the
principal financial officer of the Company, less the amount of cash or Cash
Equivalents received in connection with a subsequent sale of or collection on
such Designated Non-cash Consideration.

 

8

 

“Designated Preferred Stock”
means Preferred Stock of the Company or any parent corporation thereof (in each
case other than Disqualified Stock) that is issued for cash (other than to a Restricted
Subsidiary or an employee stock ownership plan or trust established by the Company
or any of its Subsidiaries) and is so designated as Designated Preferred Stock,
pursuant to an Officer’s Certificate executed by the principal financial
officer of the Company or the applicable parent corporation thereof, as the
case may be, on the issuance date thereof, the cash proceeds of which are
excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.

 

“Designated Senior Indebtedness” means:

 

(1)           any
Indebtedness outstanding under the Senior Credit Facilities; and

 

(2)           any
other Senior Indebtedness permitted under this Indenture, the principal amount
of which is $50.0 million or more and that has been designated by the Company
as “Designated Senior Indebtedness.”

 

“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 putable or
exchangeable, or upon the happening of any event, matures or is mandatorily
redeemable (other than solely as a result of a change of control or asset sale)
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof (other than solely as a result of a change of
control or asset sale), in whole or in part, in each case prior to the date 91
days after the maturity date of the Notes; provided, however,
that if such Capital Stock is issued to any plan for the benefit of employees
of the Company or its Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Stock solely because it may be
required to be repurchased by the Company or its Subsidiaries in order to
satisfy applicable statutory or regulatory obligations.

 

“EBITDA”
means, with respect to any Person for any period, the Consolidated Net Income
of such Person for such period

 

(1)           increased (without duplication) by:

 

(a)           provision for taxes
based on income or profits or capital gains, including, without limitation,
state, franchise and similar taxes and foreign withholding taxes of such Person
paid or accrued during such period to the extent the same was deducted (and not
added back) in computing Consolidated Net Income; plus

 

(b)           Fixed Charges
of such Person for such period (including (x) net losses or Hedging
Obligations or other derivative instruments entered into for the purpose of hedging
interest rate risk and (y) costs of surety bonds in connection with
financing activities, in each case, to the extent included in Fixed Charges) to
the extent the same was deducted (and not added back) in calculating such
Consolidated Net Income; plus

 

(c)           Consolidated
Depreciation and Amortization Expense of such Person for such period to the
extent the same were deducted (and not added back) in computing Consolidated
Net Income; plus

 

(d)           any expenses or
charges (other than depreciation or amortization expense) related to any Equity
Offering, Permitted Investment, acquisition, disposition, recapitalization or
the incurrence of Indebtedness permitted to be incurred by this Indenture
(including a refinancing thereof) (whether or not successful), including (i)
such fees, expenses 

 

9

 

or charges related to the offering of the Notes and
the Credit Facilities and (ii) any amendment or other modification of the
Notes, and, in each case, deducted (and not added back) in computing
Consolidated Net Income; plus

 

(e)           the amount of
any restructuring charges, integration costs or other business optimization
expenses or reserves deducted (and not added back) in such period in computing
Consolidated Net Income, including any one-time costs incurred in
connection with acquisitions after the Issue Date and costs related to the
closure and/or consolidation of facilities; plus

 

(f)            any other non-cash
charges, including any write offs or write downs, reducing Consolidated Net
Income for such period (provided
that if any such non-cash charges represent an accrual or reserve for potential
cash items in any future period, the cash payment in respect thereof in such
future period shall be subtracted from EBITDA to such extent, and excluding
amortization of a prepaid cash item that was paid in a prior period); plus

 

(g)           the amount of
any minority interest expense consisting of Subsidiary income attributable to
minority equity interests of third parties in any non-Wholly Owned Subsidiary
deducted (and not added back) in such period in calculating Consolidated Net
Income; plus

 

(h)           the amount of
management, monitoring, consulting and advisory fees and related expenses paid
in such period to the Investors to the extent otherwise permitted under Section
4.11 hereof; plus

 

(i)            the amount of net
cost savings projected by the Company in good faith to be realized as a result
of specified actions taken or expected to be taken within 12 months after the
Issue Date during such period (which cost savings shall be added to EBITDA
until fully realized and calculated on a pro forma basis as though such cost savings
had been realized on the first day of such period), net of the amount of actual
benefits realized during such period from such actions; provided that
(x) such cost savings are reasonably identifiable and factually
supportable and (y) the aggregate amount of cost savings added pursuant to this
clause (i) with respect to any action, shall not exceed the cost savings expected
to be realized within 12 months of taking such action (which adjustments may be
incremental to pro forma adjustments made pursuant to the second paragraph of
the definition of “Fixed Charge Coverage Ratio”); plus

 

(j)            the amount of loss
on sale of receivables and related assets to the Receivables Subsidiary in connection
with a Receivables Facility; plus

 

(k)           any
costs or expense incurred by the Company or a Restricted Subsidiary pursuant to
any management equity plan or stock option plan or any other management or
employee benefit plan or agreement or any stock subscription or shareholder
agreement, to the extent that such cost or expenses are funded with cash
proceeds contributed to the capital of the Company or net cash proceeds of an
issuance of Equity Interest of the Company (other than Disqualified Stock)
solely to the extent that such net cash proceeds are excluded from the
calculation set forth in clause (3) of Section 4.07(a) hereof;

 

(2)           decreased by
(without duplication) non-cash gains increasing Consolidated Net Income
of such Person for such period, excluding any non-cash gains to the extent they
represent 

 

10

 

the reversal of an accrual or reserve for a
potential cash item that reduced EBITDA in any prior period; and

 

(3)           increased or decreased by (without duplication):

 

(a)           any net gain or loss
resulting in such period from Hedging Obligations and the application of
Statement of Financial Accounting Standards No. 133; plus or minus,
as applicable,

 

(b)           any net gain or loss resulting in
such period from currency translation gains or losses related to currency
remeasurements of Indebtedness (including any net loss or gain resulting from
hedge agreements for currency exchange risk).

 

“EMU” means
economic and monetary union as contemplated in the Treaty on European Union.

 

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

 

“Equity Offering” means any public or private sale of common
stock or Preferred Stock of the Company (excluding Disqualified Stock) or any
of its direct or indirect parent companies (to the extent contributed to the
Company as Equity (other than Disqualified Stock), other than:

 

(1)           public offerings
with respect to the Company’s or any direct or indirect parent company’s common
stock registered on Form S-8;

 

(2)           issuances to any
Subsidiary of the Company; and

 

(3)           any such public or
private sale that constitutes an Excluded Contribution.

 

“euro” means the single currency of participating member states
of the EMU.

 

“Euroclear” means Euroclear S.A./N.V., as operator of the Euroclear
system.

 

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

 

“Exchange Notes” means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.

 

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

 

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

 

“Excluded
Contribution” means net cash proceeds, marketable securities or
Qualified Proceeds received by the Company from

 

(1)           contributions to its
common equity capital, and

 

11

 

(2)           the sale (other than
to a Subsidiary of the Company or to any management equity plan or stock option
plan or any other management or employee benefit plan or agreement of the Company)
of Capital Stock (other than Disqualified Stock and Designated Preferred Stock)
of the Company,

 

in each case designated as Excluded Contributions
pursuant to an officer’s certificate executed by the principal financial
officer of the Company on the date such capital contributions are made or the
date such Equity Interests are sold, as the case may be, which are excluded
from the calculation set forth in clause (3) of Section 4.07(a) hereof.

 

“Existing Senior Subordinated Notes” means the 9.75% Senior
Subordinated Notes due 2012 issued by Encore Medical IHC, Inc. pursuant to an
indenture, dated October 4, 2004, among Encore Medical IHC, Inc., certain
subsidiaries of Encore Medical IHC, Inc., as guarantors, and Wells Fargo Bank,
N.A. as trustee.

 

“Fixed Charge Coverage Ratio” means, with respect to any Person
for any period, the ratio of EBITDA of such Person for such period to the Fixed
Charges of such Person for such period. 
In the event that the Company or any Restricted Subsidiary incurs, assumes,
guarantees, redeems, retires or extinguishes any Indebtedness (other than
Indebtedness incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) or issues
or redeems Disqualified Stock or Preferred Stock subsequent to the commencement
of the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to or simultaneously with the event for which the calculation of the
Fixed Charge Coverage Ratio is made (the “Fixed Charge Coverage Ratio Calculation Date”), then the
Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee, redemption, retirement or extinguishment of
Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred
Stock, as if the same had occurred at the beginning of the applicable four-quarter
period.

 

For purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers, consolidations and disposed operations (as
determined in accordance with GAAP) that have been made by the Company or any
of its Restricted Subsidiaries during the four-quarter reference period
or subsequent to such reference period and on or prior to or simultaneously
with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis, assuming that all such
Investments, acquisitions, dispositions, mergers, consolidations and disposed
operations (and the change in any associated fixed charge obligations and the
change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter
reference period.  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 of its Restricted Subsidiaries since
the beginning of such period shall have made any Investment, acquisition, disposition,
merger, consolidation or disposed operation that would have required adjustment
pursuant to this definition, then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma
effect thereto for such period as if such Investment, acquisition, disposition,
merger, consolidation or disposed operation had occurred at the beginning of
the applicable four-quarter period.

 

                For purposes of
this definition, whenever pro forma
effect is to be given to a transaction, the pro
forma calculations shall be made in good faith by a responsible
financial or accounting officer of the Company. 
If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest on
such Indebtedness shall be calculated as if the rate in effect on the Fixed
Charge Coverage Ratio Calculation Date had been the applicable rate for the
entire period (taking into account any Hedging Obligations applicable to such
Indebtedness).  Interest on a Capitalized
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by a responsible financial or accounting officer of the 

 

12

 

Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP.  For purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma
basis shall be computed based upon the average daily balance of such
Indebtedness during the applicable period except as set forth in the first
paragraph of this definition.  Interest
on Indebtedness that may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered rate,
or other rate, shall be deemed to have been based upon the rate actually chosen,
or, if none, then based upon such optional rate chosen as the Company may
designate.

 

“Fixed Charges” means, with respect to any
Person for any period, the sum of:

 

(1)           Consolidated
Interest Expense of such Person for such period;

 

(2)           all cash dividends
or other distributions paid (excluding items eliminated in consolidation) on
any series of Preferred Stock of any Restricted Subsidiary during such period;
and

 

(3)           all dividends or
other distributions accrued (excluding items eliminated in consolidation) on any
series of Disqualified Stock during such period.

 

“Foreign Subsidiary”
means, with respect to any Person, any Restricted Subsidiary of such Person
that is not organized or existing under the laws of the United States, any State
thereof, the District of Columbia, or any territory thereof and any Restricted
Subsidiary of such Foreign Subsidiary.

 

“GAAP” means generally accepted accounting principles in the
United States which are in effect on the Issue Date.

 

“Global Note Legend” means the legend set forth in Section
2.06(g)(ii) hereof, which is
required to be placed on all Global Notes issued under this Indenture.

 

“Global Notes” means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto, issued in accordance with Section 2.01,
2.06(b), 2.06(d) or 2.06(f) hereof.

 

 “Government
Securities” means securities that are:

 

(1)           direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged; or

 

(2)           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 by the United States of
America,

 

which, in either case, are not callable or
redeemable at the option of the issuers thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act), as custodian with respect to any such Government Securities or
a specific payment of principal of or interest on any such Government
Securities held by such custodian for the account of the holder of such
depository receipt; provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Securities or
the specific payment of principal of or interest on the Government Securities
evidenced by such depository receipt.

 

13

 

“guarantee”
means a guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in any
manner (including letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness or other obligations.

 

“Guarantee” means the guarantee by any Guarantor of the Issuers’
Obligations under this Indenture.

 

“Guarantor” means, each Restricted Subsidiary that Guarantees
the Notes in accordance with the terms of this Indenture and its successors and
assigns, until released from its obligations under its Guarantee in accordance
with the terms of this Indenture.

 

                “Hedging
Obligations” means, with respect to any Person, the obligations of such
Person under any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, commodity swap agreement, commodity cap
agreement, commodity collar agreement, foreign exchange contract, currency swap
agreement or similar agreement providing for the transfer or mitigation of
interest rate or currency risks either generally or under specific
contingencies.

 

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

 

“Indebtedness” means, with respect to any
Person, without duplication:

 

(1)           any indebtedness of
such Person, whether or not contingent:

 

(a)           in respect of
borrowed money;

 

(b)           evidenced by bonds,
notes, debentures or similar instruments or letters of credit or bankers’ acceptances
(or, without duplication, reimbursement agreements in respect thereof);

 

(c)           representing the
balance deferred and unpaid of the purchase price of any property (including Capitalized
Lease Obligations), except (i) any such balance that constitutes a trade
payable or similar obligation to a trade creditor, in each case accrued in the
ordinary course of business and (ii) any earn-out obligations until such obligation
becomes a liability on the balance sheet of such Person in accordance with
GAAP; or

 

(d)           representing any
Hedging Obligations,

 

if
and to the extent that any of the foregoing Indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet (excluding the footnotes thereto) of such Person prepared in accordance
with GAAP;

 

(2)           to the extent not
otherwise included, any obligation by such Person to be liable for, or to pay,
as obligor, guarantor or otherwise, on the obligations of the type referred to
in clause (1) of a third Person (whether or not such items would appear upon
the balance sheet of the such obligor or guarantor), other than by endorsement
of negotiable instruments for collection in the ordinary course of business;
and

 

(3)           to
the extent not otherwise included, the obligations of the type referred to in
clause (1) of a third Person secured by a Lien on any asset owned by such first
Person, whether or not such Indebtedness is assumed by such first Person;

 

14

 

provided, however, that notwithstanding the foregoing,
Indebtedness shall be deemed not to include (a) Contingent Obligations incurred
in the ordinary course of business or (b) obligations under or in respect of
Receivables Facilities.

 

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

 

“Independent Financial
Advisor” means an accounting, appraisal, investment banking firm or
consultant to Persons engaged in Similar Businesses of nationally recognized
standing that is, in the good faith judgment of the Company, qualified to perform
the task for which it has been engaged.

 

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

 

“Initial Notes” has the meaning set forth in the recitals
hereto.

 

“Initial Purchasers”
means Banc of America Securities LLC and Credit Suisse Securities (USA) LLC.

 

“Interest Payment Date” means May 15 and November 15 of each
year to stated maturity.

 

“Investment Grade Rating” means a rating equal to or higher than
Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by
S&P, or an equivalent rating by any other Rating Agency.

 

“Investment Grade Securities” means:

 

(1)           securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof (other than Cash Equivalents);

 

(2)           debt securities or
debt instruments with an Investment Grade Rating, but excluding any debt
securities or instruments constituting loans or advances among the Company and
its Subsidiaries;

 

(3)           investments in any
fund that invests exclusively in investments of the type described in clauses
(1) and (2) which fund may also hold immaterial amounts of cash pending
investment or distribution; and

 

(4)            corresponding instruments in
countries other than the United States customarily utilized for high quality investments.

 

“Investments” means, with respect to any Person, all investments
by such Person in other Persons (including Affiliates) in the form of loans
(including guarantees), advances or capital contributions (excluding accounts
receivable, trade credit, advances to customers, commission, travel and similar
advances to officers and employees, in each case made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities issued by any other Person and investments
that are required by GAAP to be classified on the balance sheet (excluding the
footnotes) of the Company in the same manner as the other investments included
in this definition to the extent such transactions involve the transfer of cash
or other property.  For purposes of the
definition of “Unrestricted Subsidiary” and Section 4.07 hereof:

 

15

 

(1)           “Investments” shall
include the portion (proportionate to the Company’s equity interest in such
Subsidiary) of the fair market value of the net assets of a Subsidiary of the Company
at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary
as a Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent “Investment” in an Unrestricted Subsidiary 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 of such Subsidiary at the time of such redesignation;
and

 

(2)            any property transferred to or from
an Unrestricted Subsidiary shall be valued at its fair market value at the time
of such transfer, in each case as determined in good faith by the Company.

 

“Investors”
means The Blackstone Group and each of its Affiliates, but not including any of
its portfolio companies.

 

“Issue Date” means November 3,
2006.

 

“Issuers” has the meaning set forth in the recitals hereto until
a successor Person or Persons shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Issuers” shall mean such
successor Person or Persons.

 

“Issuers’ Order” means a written request or order signed on
behalf of each Issuer by an Officer of such Issuer, who must be the principal
executive officer, the principal financial officer, the treasurer, the
principal accounting officer or an executive vice president of such Issuer, and
delivered to the Trustee.

 

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

 

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

 

“Lien” means, with respect to any asset, any mortgage, lien
(statutory or otherwise), pledge, hypothecation, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction;
provided that in no
event shall an operating lease be deemed to constitute a Lien.

 

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

 

“Net Income” means, with respect to any
Person, the net income (loss) of such Person, determined in accordance with
GAAP and before any reduction in respect of Preferred Stock dividends.

 

16

 

“Net Proceeds” means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale,
including any cash received upon the sale or other disposition of any
Designated Non-cash Consideration received in any Asset Sale, net of the direct
costs relating to such Asset Sale and the sale or disposition of such
Designated Non-cash Consideration, including legal, accounting and investment
banking fees, and brokerage and sales commissions, any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of principal,
premium, if any, and interest on Senior Indebtedness required (other than
required by clause (1) of Section 4.10(b) hereof) to be paid as a result of
such transaction and any deduction of appropriate amounts to be provided by the
Company or any of its Restricted Subsidiaries as a reserve in accordance with
GAAP against any liabilities associated with the asset disposed of in such transaction
and retained by the Company or any of its Restricted Subsidiaries after such
sale or other disposition thereof, including pension and other post-employment
benefit liabilities and liabilities related to environmental matters or against
any indemnification obligations associated with such transaction.

 

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

 

“Notes” means the Initial Notes and more particularly means any
Note authenticated and delivered under this Indenture.  For all purposes of this Indenture, the term “Notes”
shall also include any Additional Notes that may be issued under a supplemental
indenture.  For purposes of this
Indenture, all references to Notes to be issued or authenticated upon transfer,
replacement or exchange shall be deemed to refer to Notes of the applicable series.

 

“Obligations” means any principal, interest (including any
interest accruing subsequent to the filing of a petition in bankruptcy,
reorganization or similar proceeding at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable state, federal or foreign law), penalties, fees,
indemnifications, reimbursements (including reimbursement obligations with
respect to letters of credit and banker’s acceptances), damages and other
liabilities, and guarantees of payment of such principal, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities, payable
under the documentation governing any Indebtedness.

 

“Offering Memorandum” means the offering memorandum, dated October
30, 2006, relating to the sale of the Initial Notes.

 

“Officer” means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the Chief Operating Officer, the
President, any Executive Vice President, Senior Vice President or Vice
President, the Treasurer or the Secretary of the applicable Issuer.

 

“Officer’s Certificate” means a certificate signed on behalf of an
Issuer by an Officer of such Issuer, who must be the principal executive
officer, the principal financial officer, the treasurer, the principal
accounting officer or executive vice president of such Issuer that meets the
requirements set forth in this Indenture.

 

“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, a Subsidiary of the Company
or the Trustee.

 

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

 

17

 

“Permitted Asset Swap” means the
concurrent purchase and sale or exchange of Related Business Assets or a combination
of Related Business Assets and cash or Cash Equivalents between the Company or
any of its Restricted Subsidiaries and another Person; provided, that
any cash or Cash Equivalents received must be applied in accordance with
Section 4.10 hereof.

 

“Permitted Holders” means each of the Investors and members of
management of the Company (or its direct parent) on the Issue Date who are
holders of Equity Interests of the Company (or any of its direct or indirect
parent companies) and any group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act or any successor provision) of which any
of the foregoing are members; provided
that, in the case of such group and without giving effect to the existence of
such group or any other group, such Investors and members of management,
collectively, have beneficial ownership of more than 50% of the total voting
power of the Voting Stock of the Company or any of its direct or indirect
parent companies.

 

“Permitted Investment” means:

 

(1)           any Investment in
the Company or any of its Restricted Subsidiaries;

 

(2)           any Investment in
cash and Cash Equivalents or Investment Grade Securities;

 

(3)           any Investment by
the Company or any of its Restricted Subsidiaries in a Person that is engaged
in a Similar Business if as a result of such Investment:

 

(a)           such Person becomes
a Restricted Subsidiary; or

 

(b)           such Person, in one
transaction or a series of related transactions, is merged or consolidated with
or into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary,

 

and,
in each case, any Investment held by such Person; provided, that such Investment was not acquired by such Person in contemplation
of such acquisition, merger, consolidation or transfer;

 

(4)           any Investment in
securities or other assets not constituting cash and Cash Equivalents and
received in connection with an Asset Sale made pursuant to the provisions of
Section 4.10 hereof or any other disposition of assets not constituting an
Asset Sale;

 

(5)           any Investment existing
on the Issue Date;

 

(6)           any Investment
acquired by the Company or any of its Restricted Subsidiaries:

 

(a)           in exchange for any
other Investment or accounts receivable held by the Company or any such Restricted
Subsidiary in connection with or as a result of a bankruptcy, workout,
reorganization or recapitalization of the issuer of such other Investment or accounts
receivable; or

 

(b)           as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with respect
to any secured Investment or other transfer of title with respect to any
secured Investment in default;

 

(7)           Hedging Obligations
permitted under clause (10) of Section 4.09(b) hereof;

 

18

 

(8)           any Investment in a
Similar Business having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (8) that are at that time
outstanding, not to exceed 2.5% of Total Assets at the time of such Investment
(with the fair market value of each Investment being measured at the time made
and without giving effect to subsequent changes in value);

 

(9)           Investments the
payment for which consists of Equity Interests (exclusive of Disqualified
Stock) of the Company, or any of its direct or indirect parent companies; provided, however, that such Equity Interests will not increase
the amount available for Restricted Payments under clause (3) of Section
4.07(a) hereof;

 

(10)         guarantees of
Indebtedness of the Company and any Restricted Subsidiary permitted under
Section 4.09 hereof;

 

(11)         any transaction to
the extent it constitutes an Investment that is permitted and made in
accordance with the provisions of Section 4.11(b) hereof (except transactions
described in clauses (2), (5) and (9) of Section 4.11(b) hereof);

 

(12)         Investments
consisting of purchases and acquisitions of inventory, supplies, material or
equipment;

 

(13)         additional
Investments having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (13) that are at that time outstanding
(without giving effect to the sale of an Unrestricted Subsidiary to the extent
the proceeds of such sale do not consist of cash or marketable securities), not
to exceed 3.5% of Total Assets at the time of such Investment (with the fair
market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value); provided
that the Total Leverage Ratio of the Company is less than 6.00 to 1.00 on a pro forma basis after giving effect to such Investment;

 

(14)         Investments relating
to a Receivables Subsidiary that, in the good faith determination of the Company
are necessary or advisable to effect any Receivables Facility;

 

(15)         advances to, or
guarantees of Indebtedness of, employees not in excess of $6.0 million
outstanding at any one time, in the aggregate;

 

(16)         loans and advances to
officers, directors and employees for business-related travel expenses,
moving expenses and other similar expenses, in each case incurred in the ordinary
course of business or consistent with past practices or to fund such Person’s
purchase of Equity Interests of the Company or any direct or indirect parent
company thereof; and

 

(17)         loans and advances to
independent sales persons against commissions not in excess of $4.0 million outstanding
at any one time, in the aggregate.

 

“Permitted Junior Securities” means:

 

(1)           Equity
Interests in an Issuer, any Guarantor or any direct or indirect parent of the Company;
or

 

(2)           unsecured
debt securities that are subordinated to all Senior Indebtedness (and any debt
securities issued in exchange for Senior Indebtedness) to substantially the
same extent 

 

19

 

as, or to a greater extent
than, the Notes and the related Guarantees are subordinated to Senior Indebtedness
under this Indenture;

 

provided
that the term “Permitted Junior Securities” shall not include any securities
distributed pursuant to a plan of reorganization if the Indebtedness under the
Senior Credit Facilities is treated as part of the same class as the Notes for
purposes of such plan of reorganization; provided  further  that to the extent that any Senior Indebtedness of an
Issuer or the Guarantors outstanding on the date of consummation of any such
plan of reorganization is not paid in full in cash on such date, the holders of
any such Senior Indebtedness not so paid in full in cash have consented to the
terms of such plan of reorganization.

 

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

 

(1)           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 U.S. government bonds to
secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case incurred in the ordinary course of business;

 

(2)           Liens imposed by
law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for
sums not yet overdue for a period of more than 30 days or being contested in
good faith by appropriate proceedings or other Liens arising out of judgments
or awards against such Person with respect to which such Person shall then be
proceeding with an appeal or other proceedings for review if adequate reserves
with respect thereto are maintained on the books of such Person in accordance
with GAAP;

 

(3)           Liens for taxes,
assessments or other governmental charges not yet overdue for a period of more
than 30 days or payable or subject to penalties for nonpayment or which are
being contested in good faith by appropriate proceedings diligently conducted,
if adequate reserves with respect thereto are maintained on the books of such
Person in accordance with GAAP;

 

(4)           Liens in favor of
issuers of performance and surety bonds or bid bonds or with respect to other
regulatory requirements or letters of credit issued pursuant to the request of
and for the account of such Person in the ordinary course of its business;

 

(5)           minor survey
exceptions, minor encumbrances, easements or reservations of, or rights of others
for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as
to the use of real properties or Liens incidental, to the conduct of the
business of such Person or to the ownership of its properties which were not
incurred in connection with Indebtedness and 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;

 

(6)           Liens existing on
the Issue Date;

 

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

 

20

 

(8)           Liens 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 of its Restricted Subsidiaries; provided, however,
that such Liens are not created or incurred in connection with, or in
contemplation of, such acquisition; provided  further, however, that
the Liens may not extend to any other property owned by the Company or any of
its Restricted Subsidiaries;

 

(9)           Liens securing
Indebtedness or other obligations of a Restricted Subsidiary owing to the Company
or another Restricted Subsidiary permitted to be incurred in accordance with
Section 4.09 hereof;

 

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

 

(11)         Liens on specific
items of inventory of other goods and proceeds of any Person securing such
Person’s obligations in respect of bankers’ acceptances issued or created for
the account of such Person to facilitate the purchase, shipment or storage of
such inventory or other goods;

 

(12)         leases, subleases,
licenses or sublicenses granted to others in the ordinary course of business
which do not materially interfere with the ordinary conduct of the business of
the Company or any of its Restricted Subsidiaries and do not secure any Indebtedness;

 

(13)         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;

 

(14)         Liens in favor of the
Company, the Co-Issuer or any Guarantor;

 

(15)         Liens on equipment of
the Company or any of its Restricted Subsidiaries granted in the ordinary
course of business to the Company’s clients;

 

(16)         Liens on accounts
receivable and related assets incurred in connection with a Receivables
Facility;

 

(17)         Liens to secure any
refinancing, refunding, extension, renewal or replacement (or successive
refinancing, refunding, extensions, renewals or replacements) as a whole, or in
part, of any Indebtedness secured by any Lien referred to in the foregoing
clauses (6), (7) and (8); provided, however, that (a) such new
Lien shall be limited to all or part of the same property that secured the
original Lien (plus improvements on such property), and (b) the Indebtedness
secured by such Lien at such time is not increased to any amount greater than
the sum of (i) the outstanding principal amount or, if greater, committed
amount of the Indebtedness described under clauses (6), (7) and (8) at the time
the original Lien became a Permitted Lien under this Indenture, and (ii) an
amount necessary to pay any fees and expenses, including premiums, related to
such refinancing, refunding, extension, renewal or replacement;

 

(18)         deposits made in the
ordinary course of business to secure liability to insurance carriers;

 

21

 

(19)         other Liens securing
obligations incurred in the ordinary course of business which obligations do
not exceed $15.0 million at any one time outstanding;

 

(20)         Liens securing
judgments for the payment of money not constituting an Event of Default under
clause (5) under Section 6.01 hereof
so long as such Liens are adequately bonded and any appropriate legal
proceedings that 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;

 

(21)         Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods in the ordinary
course of business;

 

(22)         Liens (i) of a
collection bank arising under Section 4-210 of the Uniform Commercial Code
or any comparable or successor provision on items in the course of collection,
(ii) attaching to commodity trading accounts or other commodity brokerage
accounts incurred in the ordinary course of business, and (iii) in favor
of banking institutions arising as a matter of law encumbering deposits
(including the right of set-off) and which are within the general parameters
customary in the banking industry;

 

(23)         Liens deemed to exist
in connection with Investments in repurchase agreements permitted under Section
4.09 hereof; provided
that such Liens do not extend to any assets other than those that are the
subject of such repurchase agreement;

 

(24)         Liens encumbering
reasonable customary initial deposits and margin deposits and similar Liens
attaching to commodity trading accounts or other brokerage accounts incurred in
the ordinary course of business and not for speculative purposes; and

 

(25)         Liens that are
contractual rights of set-off (i) relating to the establishment of depository
relations with banks not given in connection with the issuance of Indebtedness,
(ii) relating to pooled deposit or sweep accounts of the Company or any of its
Restricted Subsidiaries to permit satisfaction of overdraft or similar
obligations incurred in the ordinary course of business of the Company and its
Restricted Subsidiaries or (iii) relating to purchase orders and other agreements
entered into with customers of the Company or any of its Restricted
Subsidiaries in the ordinary course of business.

 

For purposes of this definition, the term “Indebtedness” shall be
deemed to include interest on such Indebtedness.

 

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

 

“Preferred Stock”
means any Equity Interest with preferential rights of payment of dividends or
upon liquidation, dissolution, or winding up.

 

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

 

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

 

22

 

“Qualified Proceeds”
means assets that are used or useful in, or Capital Stock of any Person engaged
in, a Similar Business; provided
that the fair market value of any such assets or Capital Stock shall be determined
by the Company in good faith.

 

“Rating Agencies” means Moody’s and S&P or if Moody’s or
S&P or both shall not make a rating on the Notes publicly available, a
nationally recognized statistical rating agency or agencies, as the case may
be, selected by the Issuers which shall be substituted for Moody’s or S&P
or both, as the case may be.

 

“Receivables Facility”
means any of one or more receivables financing facilities as amended,
supplemented, modified, extended, renewed, restated or refunded from time to
time, the Obligations of which are non-recourse (except for customary representations,
warranties, covenants and indemnities made in connection with such facilities)
to the Company or any of its Restricted Subsidiaries (other than a Receivables
Subsidiary) pursuant to which the Company or any of its Restricted Subsidiaries
sells its accounts receivable to either (a) a Person that is not a Restricted
Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts
receivable to a Person that is not a Restricted Subsidiary.

 

“Receivables Fees” means distributions or payments
made directly or by means of discounts with respect to any accounts receivable
or participation interest therein issued or sold in connection with, and other
fees paid to a Person that is not a Restricted Subsidiary in connection with,
any Receivables Facility.

 

“Receivables Subsidiary” means any Subsidiary formed for the
purpose of, and that solely engages only in one or more Receivables Facilities
and other activities reasonably related thereto.

 

“Record Date” for the interest or Additional Interest, if any,
payable on any applicable Interest Payment Date means May 1 or November 1 (whether
or not a Business Day) next preceding such Interest Payment Date.

 

“Registration Rights Agreement” means the Registration Rights
Agreement with respect to the Notes dated as of the Issue Date, among the
Issuers, the Guarantors and the Initial Purchasers, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements among the Issuers
and the other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Issuers to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.

 

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

 

“Regulation S Global Note” means a Regulation S Temporary Global
Note or Regulation S Permanent Global Note, as applicable.

 

“Regulation S Permanent Global Note” means a permanent Global
Note in the form of Exhibit A hereto, bearing the Global Note
Legend and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Regulation S Temporary
Global Note upon expiration of the Restricted Period.

 

“Regulation S Temporary Global Note” means a temporary Global Note
in the form of Exhibit A hereto, bearing the Global Note Legend, the
Private Placement Legend and the Regulation S Temporary Global Note Legend and deposited
with or on behalf of and registered in the name of the Depositary 

 

23

 

or its nominee, issued in a denomination equal to
the outstanding principal amount of the Notes initially sold in reliance on
Rule 903.

 

“Regulation S Temporary Global Note Legend” means the legend set
forth in Section 2.06(g)(iii) hereof.

 

“Related Business Assets”
means assets (other than cash or Cash Equivalents) used or useful in a Similar
Business, provided that
any assets received by the Company or a Restricted Subsidiary in exchange for
assets transferred by the Company or a Restricted Subsidiary shall not be
deemed to be Related Business Assets if they consist of securities of a Person,
unless upon receipt of the securities of such Person, such Person would become
a Restricted Subsidiary.

 

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

 

“Responsible Officer” means, 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 Definitive Note” means a Definitive Note bearing the
Private Placement Legend.

 

“Restricted Global Note” means a Global Note bearing the Private
Placement Legend.

 

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

 

“Restricted Period” means the 40-day distribution compliance
period as defined in Regulation S.

 

“Restricted Subsidiary” means, at any time, any direct or
indirect Subsidiary of the Company (including the Co-Issuer and any Foreign
Subsidiary) that is not then an Unrestricted Subsidiary; provided, however, that upon the occurrence of an Unrestricted Subsidiary
ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in
the definition of “Restricted Subsidiary.”

 

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

 

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

 

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

 

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

 

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

 

“Sale and Lease-Back
Transaction” means any arrangement providing for the leasing by the Company
or any of its Restricted Subsidiaries of any real or tangible personal
property, which property 

 

24

 

has been or is to be sold or transferred by the Company
or such Restricted Subsidiary to a third Person in contemplation of such leasing.

 

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

 

“Secured Indebtedness”
means any Indebtedness of the Company or any of its Restricted Subsidiaries
secured by a Lien.

 

“Secured Indebtedness Amount” means, on any date, an amount
equal to the aggregate amount of the EBITDA of the Company for the four fiscal
quarters for which internal financial statements are available immediately
preceding such date times 5.0, with such pro forma
adjustments to EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition
of Fixed Charge Coverage Ratio.

 

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

 

“Senior Credit Facilities”
means the Credit Facility under the Credit Agreement to be entered into as of
the Issue Date by and among the Company, Encore Medical Holdings Corp., the
Guarantors, the lenders party thereto in their capacities as lenders thereunder
and Bank of America, N.A., as Administrative Agent, including any guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and any amendments, supplements, modifications, extensions,
renewals, restatements, refundings or refinancings thereof and any indentures
or credit facilities or commercial paper facilities with banks or other institutional
lenders or investors that replace, refund or refinance any part of the loans,
notes, other credit facilities or commitments thereunder, including any such
replacement, refunding or refinancing facility or indenture that increases the
amount borrowable thereunder or alters the maturity thereof (provided that such increase in
borrowings is permitted under Section 4.09 hereof).

 

“Senior Indebtedness” means:

 

(1)           all Indebtedness of
the Issuers or any Guarantor outstanding under the Senior Credit Facilities
(including interest accruing on or after the filing of any petition in
bankruptcy or similar proceeding or for reorganization of the Issuers or any
Guarantor (at the rate provided for in the documentation with respect thereto,
regardless of whether or not a claim for post-filing interest is allowed
in such proceedings)), and any and all other fees, expense reimbursement
obligations, indemnification amounts, penalties, and other amounts (whether
existing on the Issue Date or thereafter created or incurred) and all
obligations of the Issuers or any Guarantor to reimburse any bank or other
Person in respect of amounts paid under letters of credit, acceptances or other
similar instruments;

 

(2)           all Hedging
Obligations (and guarantees thereof) owing to a Lender (as defined in the
Senior Credit Facilities) or any Affiliate of such Lender (or any Person that
was a Lender or an Affiliate of such Lender at the time the applicable
agreement giving rise to such Hedging Obligation was entered into), provided
that such Hedging Obligations are permitted to be incurred under the terms of this
Indenture;

 

(3)           any other
Indebtedness of the Issuers or any Guarantor permitted to be incurred under the
terms of this Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in
right of payment to the Notes or any related Guarantee; and

 

25

 

(4)           all Obligations with respect to the items
listed in the preceding clauses (1), (2) and (3);

 

provided, however, that Senior Indebtedness shall not include:

 

(a)           any obligation of such Person to the Issuers
or any of their Subsidiaries;

 

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

 

(c)           any accounts payable or other liability to
trade creditors arising in the ordinary course of business;

 

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

 

(e)           that portion of any Indebtedness which at the
time of incurrence is incurred in violation of this Indenture; provided,
however that such Indebtedness shall be deemed not to have been incurred
in violation of this Indenture for purposes of this clause if such Indebtedness
consists of Designated Senior Indebtedness, and the holder(s) of such
Indebtedness or their agent or representative (i) had no actual knowledge
at the time of incurrence that the incurrence of such Indebtedness violated
this Indenture and (ii) shall have received a certificate from an officer
of the Company to the effect that the incurrence of such Indebtedness does not
violate the provisions of this Indenture;
or

 

(f)            any 
obligation under the Existing Senior Subordinated Notes.

 

“Senior Subordinated Indebtedness” means:

 

(1)           with respect to the Issuers, Indebtedness
which ranks equal in right of payment to the Notes issued by the Issuers; and

 

(2)           with respect to any Guarantor, Indebtedness
which ranks equal in right of payment to the Guarantee of such entity of Notes.

 

 “Shelf Registration Statement”
means the Shelf Registration Statement as defined in the Registration Rights
Agreement.

 

“Significant Subsidiary” means (i) the Co-Issuer and (ii) any
Restricted Subsidiary that would be a “significant subsidiary” as defined in
Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such regulation is in effect on the Issue Date.

 

“Similar Business”
means any business conducted or proposed to be conducted by the Company and its
Restricted Subsidiaries on the Issue Date or any business that is similar,
reasonably related, incidental or ancillary thereto.

 

“Sponsor Management Agreement” means the management agreement
between certain of the management companies associated with the Investors and the
Company and/or one of its direct or indirect parent companies as in effect on
the Issue Date.

 

26

 

“Subordinated
Indebtedness” means, with respect to the Notes,

 

(1)           any Indebtedness of the Issuers which is by
its terms subordinated in right of payment to the Notes, and

 

(2)           any Indebtedness of any
Guarantor which is by its terms subordinated in right of payment to the
Guarantee of such entity of the Notes

 

“Subsidiary” means, with respect to any
Person:

 

(1)           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 voting power of
shares of Capital Stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time of determination owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person or a combination
thereof or is consolidated under GAAP with such Person at such time; and

 

(2)           any partnership, joint venture, limited liability company or similar
entity of which

 

(a)           more than 50%
of the capital accounts, distribution rights, total equity and voting interests
or general or limited partnership interests, as applicable, are owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person or a combination thereof whether in the form of
membership, general, special or limited partnership or otherwise, and

 

(b)           such Person or any Restricted Subsidiary of such Person is a general partner
or otherwise controls such entity.

 

“Total Assets”
means the total assets of the Company, except where expressly provided
otherwise, and its Restricted Subsidiaries on a consolidated basis, as shown on
the most recent balance sheet of such other Person.

 

“Total Leverage Ratio” means on any date of determination, the
ratio of (1) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries on a consolidated basis outstanding on such date, to
(2) the aggregate amount of EBITDA of the Company and its Restricted
Subsidiaries for the most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding such date,
with such pro forma adjustments to Indebtedness
and EBITDA as are appropriate and consistent with the pro forma
adjustment provisions set forth in the definition of Fixed Charge Coverage
Ratio.

 

“Total Tangible Assets” of any Person means the total assets of
such Person and its Restricted Subsidiaries (less applicable depreciation,
amortization and other valuation reserves) on a consolidated basis, after
deducting therefrom all goodwill, tradenames, trademarks, patents, unamortized
debt discount and expense and other like intangibles, all as shown on the most
recent balance sheet of such Person.

 

“Transaction”
means the merger contemplated by the Transaction Agreement, the issuance of the
Notes and borrowings under the Senior Credit Facilities on the Issue Date to finance the
merger and repay certain debt as described in the Offering Memorandum under “Transactions.”

 

27

 

“Transaction Agreement”
means the Agreement and Plan of Merger, dated as of June 30, 2006, by and among
Grand Slam Holdings, LLC, Grand Slam Acquisition Corp. and Encore Medical
Corporation, as the same may be amended prior to the Issue Date.

 

“Treasury Rate”
means, as of any Redemption Date, the yield to maturity as of such Redemption
Date of United States Treasury securities with a constant maturity (as compiled
and published in the most recent Federal Reserve Statistical Release H.15 (519)
that has become publicly available at least two Business Days prior to the
Redemption Date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the
period from the Redemption Date to November 15, 2010; provided, however, that if the period from the Redemption Date to
November 15, 2010 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year will be used.

 

“Trust Indenture Act” means the
Trust Indenture Act of 1939, as amended (15 U.S.C §§ 77aaa-777bbbb).

 

“Trustee” means The Bank of New York, a New York banking corporation,
as trustee, until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving hereunder.

 

“Unrestricted Definitive Note” means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.

 

“Unrestricted Global Note” means a permanent Global Note,
substantially in the form of Exhibit A attached hereto, that bears
the Global Note Legend and that has the “Schedule of Exchanges of Interests in
the Global Note” attached thereto, and that is deposited with or on behalf of
and registered in the name of the Depositary, representing Notes that do not
bear the Private Placement Legend.

 

“Unrestricted Subsidiary” means:

 

(1)           any Subsidiary of the Company which at the
time of determination is an Unrestricted Subsidiary (as designated by the Company,
as provided below); and

 

(2)           any Subsidiary of an Unrestricted Subsidiary.

 

The Company may designate any Subsidiary of the Company, other than the
Co-Issuer (including any existing Subsidiary and any newly acquired or newly
formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or
any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns
or holds any Lien on, any property of, the Company or any Subsidiary of the Company
(other than solely any Subsidiary of the Subsidiary to be so designated); provided that

 

(1)           any Unrestricted Subsidiary must be an entity
of which the Equity Interests entitled to cast at least a majority of the votes
that may be cast by all Equity Interests having ordinary voting power for the
election of directors or Persons performing a similar function are owned, directly
or indirectly, by the Company;

 

(2)           such designation complies with Section 4.07
hereof; and

 

(3)           each of:

 

(a)           the Subsidiary
to be so designated; and

 

28

 

(b)           its
Subsidiaries

 

has not at the time of designation, and does
not thereafter, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable with respect to any Indebtedness pursuant to which the
lender has recourse to any of the assets of the Company or any Restricted
Subsidiary.

 

The Company may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided
that, immediately after giving effect to such designation, no Default shall
have occurred and be continuing and either:

 

(1)           the Company could incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
described in Section 4.09(a) hereof; or

 

(2)           the Fixed Charge Coverage Ratio for the Company
and its Restricted Subsidiaries would be greater than such ratio for the Company
and its Restricted Subsidiaries immediately prior to such designation,

 

in each case on a pro
forma basis taking into account such designation.

 

Any such designation by the Company shall be notified by the Company to
the Trustee by promptly filing with the Trustee a copy of the resolution of the
board of directors of the Company or any committee thereof giving effect to
such designation and an Officer’s Certificate certifying that such designation
complied with the foregoing provisions.

 

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

 

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

 

“Weighted Average Life to Maturity” means,
when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the
case may be, at any date, the quotient obtained by dividing:

 

(1)           the sum of the products of the number of
years from the date of determination to the date of each successive scheduled
principal payment of such Indebtedness or redemption or similar payment with
respect to such Disqualified Stock or Preferred Stock multiplied by the amount
of such payment; by

 

(2)           the sum of all such payments.

 

“Wholly-Owned Subsidiary” of any Person means a Subsidiary of
such Person, 100% of the outstanding Equity Interests of which (other than directors’
qualifying shares) shall at the time be owned by such Person or by one or more
Wholly-Owned Subsidiaries of such Person.

 

Section 1.02              Other Definitions.

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Acceptable Commitment”

  	
   

  	
  4.10

  
	
  “Affiliate Transaction”

  	
   

  	
  4.11

  
	
  “Asset Sale Offer”

  	
   

  	
  4.10

  

 

29

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Authentication Order”

  	
   

  	
  2.02

  
	
  “Blockage Notice”

  	
   

  	
  10.03

  
	
  “Change of Control Offer”

  	
   

  	
  4.14

  
	
  “Change of Control
  Payment”

  	
   

  	
  4.14

  
	
  “Change of Control Payment
  Date”

  	
   

  	
  4.14

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  
	
  “DTC”

  	
   

  	
  2.03

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Excess Proceeds”

  	
   

  	
  4.10

  
	
  “Guarantee Blockage
  Notice”

  	
   

  	
  12.03

  
	
  “Guarantee Payment
  Blockage Period”

  	
   

  	
  12.03

  
	
  “Guarantor Payment
  Default”

  	
   

  	
  12.03

  
	
  “incur”

  	
   

  	
  4.09

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  
	
  “Non-Guarantor Payment
  Default”

  	
   

  	
  12.03

  
	
  “Non-Payment Default”

  	
   

  	
  10.03

  
	
  “Note Register”

  	
   

  	
  2.03

  
	
  “Offer Amount”

  	
   

  	
  3.09

  
	
  “Offer Period”

  	
   

  	
  3.09

  
	
  “Pari Passu Indebtedness”

  	
   

  	
  4.10

  
	
  “pay its Guarantee”

  	
   

  	
  12.03

  
	
  “pay the Notes”

  	
   

  	
  10.03

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Blockage Period”

  	
   

  	
  10.03

  
	
  “Payment Default”

  	
   

  	
  10.03

  
	
  “Purchase Date”

  	
   

  	
  3.09

  
	
  “Redemption Date”

  	
   

  	
  3.07

  
	
  “Refinancing
  Indebtedness”

  	
   

  	
  4.09

  
	
  “Refunding Capital Stock”

  	
   

  	
  4.07

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted
  Payments”

  	
   

  	
  4.07

  
	
  “Second Commitment”

  	
   

  	
  4.10

  
	
  “Successor Company”

  	
   

  	
  5.01

  
	
  “Successor
  Person”

  	
   

  	
  5.01

  
	
  “Treasury Capital Stock”

  	
   

  	
  4.07

  

 

Section 1.03              Incorporation by Reference of Trust Indenture
Act.

 

Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture.

 

The following Trust Indenture Act terms used in this
Indenture have the following meanings:

 

“indenture securities” means the Notes;

 

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

 

30

 

“indenture to be qualified” means this Indenture;

 

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

 

“obligor”
on the Notes and the Guarantees means the Issuers and the Guarantors,
respectively, and any successor obligor upon the Notes and the Guarantees,
respectively.

 

All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act reference to another statute or
defined by SEC rule under the Trust Indenture Act have the meanings so assigned
to them.

 

Section 1.04              Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

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

 

(c)           “or” is not exclusive;

 

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

 

(e)           “will” shall be interpreted to express a command;

 

(f)            provisions apply to successive events and
transactions;

 

(g)           references to sections of, or rules under, the Securities Act shall be deemed
to include substitute, replacement or successor sections or rules adopted by the
SEC from time to time;

 

(h)           unless the context otherwise requires, any reference to an “Article,” “Section”
or “clause” refers to an Article, Section or clause, as the case may be, of
this Indenture; and

 

(i)            the words “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Indenture as a whole and not
any particular Article, Section, clause or other subdivision.

 

Section 1.05           Acts of Holders.

 

(a)           Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing. 
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered
to the Trustee and, where it is hereby expressly required, to the Issuers.  Proof of execution of any such instrument or
of a writing appointing any such agent, or the holding by any Person of a Note,
shall be sufficient for any purpose of this Indenture and (subject to Section
7.01) conclusive in favor of the Trustee and the Issuers, if made in the manner
provided in this Section 1.05.

 

31

 

(b)           The fact and date of the execution by any
Person of any such instrument or writing may be proved by the affidavit of a
witness of such execution or by the certificate of any notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof.  Where such execution is by or
on behalf of any legal entity other than an individual, such certificate or
affidavit shall also constitute proof of the authority of the Person executing
the same.  The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner that the Trustee
deems sufficient.

 

(c)           The ownership of Notes shall be proved by
the Note Register.

 

(d)           Any request, demand, authorization,
direction, notice, consent, waiver or other action by the Holder of any Note
shall bind every future Holder of the same Note and the Holder of every Note
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of any action taken, suffered or omitted by the
Trustee or the Issuers in reliance thereon, whether or not notation of such
action is made upon such Note.

 

(e)           The Issuers may, in the circumstances
permitted by the Trust Indenture Act, set a record date for purposes of determining
the identity of Holders entitled to give any request, demand, authorization,
direction, notice, consent, waiver or take any other act, or to vote or consent
to any action by vote or consent authorized or permitted to be given or taken
by Holders.  Unless otherwise specified,
if not set by the Issuers prior to the first solicitation of a Holder made by
any Person in respect of any such action, or in the case of any such vote,
prior to such vote, any such record date shall be the later of 30 days prior to
the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation.

 

(f)            Without limiting the foregoing, a Holder
entitled to take any action hereunder with regard to any particular Note may do
so with regard to all or any part of the principal amount of such Note or by
one or more duly appointed agents, each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.  Any notice given or action taken by a Holder
or its agents with regard to different parts of such principal amount pursuant
to this paragraph shall have the same effect as if given or taken by separate
Holders of each such different part.

 

(g)           Without limiting the generality of the
foregoing, a Holder, including DTC that is the Holder of a Global Note, may
make, give or take, by a proxy or proxies duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided in this Indenture to be made, given or taken by Holders, and
DTC as the Holder of a Global Note may provide its proxy or proxies to the
beneficial owners of interests in any such Global Note through such depositary’s
standing instructions and customary practices.

 

(h)           The Issuers may fix a record date for the
purpose of determining the Persons who are beneficial owners of interests in
any Global Note held by DTC entitled under the procedures of such depositary to
make, give or take, by a proxy or proxies duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided in this Indenture to be made, given or taken by Holders.  If such a record date is fixed, the Holders
on such record date or their duly appointed proxy or proxies, and only such
Persons, shall be entitled to make, give or take such request, demand,
authorization, direction, notice, consent, waiver or other action, whether or
not such Holders remain Holders after such record date.  No such request, demand, authorization,
direction, notice, consent, waiver or other action shall be valid or effective
if made, given or taken more than 90 days after such record date.

 

32

 

ARTICLE
2

THE NOTES

 

Section 2.01              Form and Dating; Terms.

 

(a)           General.  The Notes and the Trustee’s
certificate of authentication shall be substantially in the form of Exhibit
A hereto.  The Notes may have notations,
legends or endorsements required by law, stock exchange rules or usage.  Each Note shall be dated the date of its
authentication.  The Notes shall be in
denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

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

 

(c)           Temporary Global Notes.  
Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of the Regulation S Temporary Global Note, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Clearstream, duly executed by the
Issuers and authenticated by the Trustee as hereinafter provided.  The Restricted Period shall be terminated
upon the receipt by the Trustee of:

 

(i)            a written certificate from the Depositary, together with copies of
certificates from Euroclear and Clearstream certifying that they have received
certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Temporary Global Note (except to
the extent of any beneficial owners thereof who acquired an interest therein during
the Restricted Period pursuant to another exemption from registration under the
Securities Act and who shall take delivery of a beneficial ownership interest
in a 144A Global Note bearing a Private Placement Legend, all as contemplated
by Section 2.06(b) hereof); and

 

(ii)           an Officer’s Certificate from the Issuers.

 

Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note shall be exchanged for
beneficial interests in the Regulation S Permanent Global Note pursuant to the
Applicable Procedures.  Simultaneously
with the authentication of the Regulation S Permanent Global Note, the Trustee shall
cancel the Regulation S Temporary Global Note. 
The aggregate principal amount of the Regulation S Temporary Global Note
and the Regulation S Permanent 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 the case may be, in connection with transfers of
interest as hereinafter provided.

 

33

 

(d)           Terms.  The aggregate principal amount
of Notes that may be authenticated and delivered under this Indenture is
unlimited.

 

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

 

The Notes shall be subject to repurchase by the Issuers pursuant to an Asset
Sale Offer as provided in Section 4.10 hereof or a Change of Control Offer as
provided in Section 4.14 hereof.  The
Notes shall not be redeemable, other than as provided in Article 3.

 

Additional Notes ranking pari  passu with the Initial Notes may be created and issued from
time to time by the Issuers without notice to or consent of the Holders and
shall be consolidated with and form a single class with the Initial Notes and
shall have the same terms as to status, redemption or otherwise as the Initial
Notes; provided that the Issuers’ ability to issue Additional Notes shall
be subject to the Issuers’ compliance with Section 4.09 hereof.  Any Additional Notes shall be issued with the
benefit of an indenture supplemental to this Indenture.

 

(e)           Euroclear and Clearstream Procedures
Applicable.  The provisions of the “Operating Procedures
of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear”
and the “General Terms and Conditions of Clearstream Banking” and “Customer
Handbook” of Clearstream shall be applicable to transfers of beneficial
interests in the Regulation S Temporary Global Note and the Regulation S
Permanent Global Notes that are held by Participants through Euroclear or
Clearstream.

 

Section 2.02              Execution and Authentication.

 

At least one Officer of each Issuer shall execute the Notes on behalf
of such Issuer by manual or facsimile signature.

 

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

 

A Note shall not be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose until authenticated substantially in the form of Exhibit A
attached hereto, as the case may be, by the manual or facsimile signature of
the Trustee.  The signature shall be
conclusive evidence that the Note has been duly authenticated and delivered
under this Indenture.

 

On the Issue Date, the Trustee shall, upon receipt of an Issuers’ Order
(an “Authentication Order”), authenticate and deliver the Initial
Notes.  In addition, at any time, from
time to time, the Trustee shall upon an Authentication Order authenticate and
deliver any Additional Notes and Exchange Notes for an aggregate principal amount
specified in such Authentication Order for such Additional Notes or Exchange
Notes issued hereunder.

 

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

 

34

 

Section 2.03              Registrar and Paying Agent.

 

The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (“Registrar”) and
an office or agency where Notes may be presented for payment (“Paying Agent”).  The Registrar shall keep a register of the
Notes (“Note Register”) and of their transfer and exchange.  The Issuers may appoint one or more
co-registrars and one or more additional paying agents.  The term “Registrar” includes any
co-registrar and the term “Paying Agent” includes any additional paying agent.  The Issuers may change any Paying Agent or Registrar
without prior notice to any Holder.  The Issuers
shall notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture.  If the Issuers fail
to appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such.  The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.

 

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

 

The Issuers initially appoint the Trustee to act as the Paying Agent
and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

 

Section 2.04              Paying Agent to Hold Money in Trust.

 

The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, or Additional Interest, if any, or interest on the Notes, and
will notify the Trustee of any default by the Issuers in making any such
payment.  While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee.  The Issuers at any time
may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying
Agent (if other than an Issuer or a Subsidiary) shall have no further liability
for the money.  If an Issuer or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization
proceedings relating to the Issuers, the Trustee shall serve as Paying Agent
for the Notes.

 

Section 2.05              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 all Holders
and shall otherwise comply with Trust Indenture Act Section 312(a).  If the Trustee is not the Registrar, the Issuers
shall furnish to the Trustee at least two Business Days before each Interest
Payment Date and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of the Holders of Notes and the Issuers shall otherwise
comply with Trust Indenture Act Section 312(a).

 

Section 2.06              Transfer and Exchange.

 

(a)           Transfer and Exchange of Global Notes.  Except
as otherwise set forth in this Section 2.06, a Global Note may be transferred,
in whole and not in part, only to another nominee of the Depositary or to a
successor Depositary or a nominee of such successor Depositary.  A beneficial interest in a Global Note may
not be exchanged for a Definitive Note unless (i) the Depositary (x) notifies the
Issuers that it is unwilling or unable to continue as Depositary for such
Global Note or (y) has ceased to be a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed 

 

35

 

by
the Issuers within 120 days or (ii) there shall have occurred and be
continuing an Event of Default with respect to the Notes.  Upon the occurrence of any of the preceding
events in (i) or (ii) above, Definitive Notes delivered in exchange for any
Global Note or beneficial interests therein will be registered in the names, and
issued in any approved denominations, requested by or on behalf of the Depositary
(in accordance with its customary procedures). 
Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.10 hereof. 
Every Note authenticated and delivered in exchange for, or in lieu of, a
Global Note or any portion thereof, pursuant to this Section 2.06 or Section
2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and
shall be, a Global Note, except for Definitive Notes issued subsequent to any
of the preceding events in (i) or (ii) above and pursuant to Section 2.06(c)
hereof.  A Global Note may not be
exchanged for another Note other than as provided in this Section 2.06(a); provided,
however, beneficial interests in a Global Note may be transferred and
exchanged as provided in Section 2.06(b), (c) or (f) hereof.

 

(b)           Transfer and Exchange of Beneficial Interests
in the Global Notes.  The transfer and exchange of beneficial interests
in the Global Notes shall be effected through the Depositary, in accordance
with the provisions of this Indenture and the Applicable Procedures.  Beneficial interests in the Restricted Global
Notes shall be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act.  Transfers of beneficial interests in the
Global Notes also shall require compliance with either subparagraph (i) or (ii)
below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:

 

(i)            Transfer of Beneficial Interests in the Same
Global Note.  Beneficial interests in any Restricted Global
Note may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of beneficial interests
in the Regulation S Temporary Global Note may not be made to a U.S. Person or
for the account or benefit of a U.S. Person (other than an Initial Purchaser).  Beneficial interests in any Unrestricted
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note.  No written orders or instructions shall be required
to be delivered to the Registrar to effect the transfers described in this Section
2.06(b)(i).

 

(ii)           All Other Transfers and Exchanges of
Beneficial Interests in Global Notes.  In connection with all transfers
and exchanges of beneficial interests that are not subject to Section
2.06(b)(i) hereof, the
transferor of such beneficial interest must deliver to the Registrar either (A)
(1) a written order from a Participant or an Indirect Participant given to the Depositary
in accordance with the Applicable Procedures directing the Depositary to credit
or cause to be credited a beneficial interest in another Global Note in an
amount equal to the beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or (B) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given
by the Depositary to the Registrar containing information regarding the Person
in whose name such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above; provided that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Temporary Global Note prior to (A) the expiration
of the Restricted Period and (B) the receipt by the Registrar of any
certificates required pursuant to Rule 903. 
Upon consummation of an Exchange Offer by the Issuers in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be
deemed to have been 

 

36

 

satisfied upon receipt by
the Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted Global
Notes.  Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.

 

(iii)          Transfer of Beneficial Interests to Another
Restricted Global Note.  A beneficial interest in any Restricted Global
Note may be transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer complies
with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:

 

(A)          if the transferee will take delivery in the form of a beneficial
interest in the 144A Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; or

 

(B)           if the transferee will take delivery in the form of a beneficial
interest in the Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications
in item (2) thereof.

 

(iv)          Transfer and Exchange of Beneficial Interests
in a Restricted Global Note for Beneficial Interests in an Unrestricted Global
Note.  A beneficial interest in any Restricted
Global Note may be exchanged by any holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note if
the exchange or transfer complies with the requirements of Section 2.06(b)(ii)
hereof and:

 

(A)          such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;

 

(B)           such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement;

 

(C)           such transfer is effected by a Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the Registration Rights Agreement;
or

 

(D)          the Registrar receives the following:

 

(1)           if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Note, a certificate from such Holder substantially in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or

 

(2)           if
the holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note, 

 

37

 

a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;

 

and,
in each such case set forth in this subparagraph (D), if the Registrar so requests
or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.

 

If
any such transfer is effected pursuant to subparagraph (B) or (D) above at a
time when an Unrestricted Global Note has not yet been issued, the Issuers shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the aggregate principal amount
of beneficial interests transferred pursuant to subparagraph (B) or (D) above.

 

Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial interest
in a Restricted Global Note.

 

(c)           Transfer or Exchange of Beneficial Interests
for Definitive Notes.

 

(i)            Beneficial Interests in Restricted Global
Notes to Restricted Definitive Notes.  If any holder of a beneficial
interest in a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Restricted Definitive Note,
then, upon the occurrence of any of the events in paragraph (i) or (ii) of
Section 2.06(a) hereof and receipt
by the Registrar of the following documentation:

 

(A)          if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note,
a certificate from such holder substantially in the form of Exhibit C
hereto, including the certifications in item (2)(a) thereof;

 

(B)           if such beneficial interest is being transferred to a QIB in accordance
with Rule 144A, a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (1) thereof;

 

(C)           if such beneficial interest is being transferred to a Non-U.S. Person
in an offshore transaction in accordance with Rule 903 or Rule 904, a
certificate substantially in the form of Exhibit B hereto,
including the certifications in item (2) thereof;

 

(D)          if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144, a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (3)(a) thereof;

 

(E)           if such beneficial interest is being transferred to the Company or any
of its Restricted Subsidiaries, a certificate substantially in the form of Exhibit
B hereto, including the certifications in item (3)(b) thereof; or

 

(F)           if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate substantially
in the form of Exhibit B hereto, including the certifications in
item (3)(c) thereof,

 

38

 

the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Issuers shall execute and the Trustee shall authenticate and mail
to the Person designated in the instructions a Definitive Note in the applicable
principal amount.  Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note pursuant
to this Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the Depositary
and the Participant or Indirect Participant. 
The Trustee shall mail such Definitive Notes to the Persons in whose
names such Notes are so registered.  Any
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained
therein.

 

(ii)           Beneficial Interests in Regulation S
Temporary Global Note to Definitive Notes.   Notwithstanding Sections
2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S
Temporary Global Note may not be exchanged for a Definitive Note or transferred
to a Person who takes delivery thereof in the form of a Definitive Note prior
to (A) the expiration of the Restricted Period and (B) the receipt by the
Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) of the
Securities Act, except in the case of a transfer pursuant to an exemption from
the registration requirements of the Securities Act other than Rule 903 or Rule
904.

 

(iii)          Beneficial Interests in Restricted Global
Notes to Unrestricted Definitive Notes.  A holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest for
an Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only upon the occurrence of any of the events in subsection (i) or (ii) of
Section 2.06(a) hereof and if:

 

(A)          such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or the transferee, in the case
of a transfer, certifies in the applicable Letter of Transmittal that it is not
(1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the
Issuers;

 

(B)           such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement;

 

(C)           such transfer is effected by a Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the Registration Rights
Agreement; or

 

(D)          the Registrar receives the following:

 

(1)           if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for an Unrestricted Definitive Note, a
certificate from such holder substantially in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or

 

(2)           if
the holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of an Unrestricted Definitive Note, a certificate from such holder
substantially in the form of Exhibit B hereto, including the certifications
in item (4) thereof;

 

and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the Registrar

 

39

 

to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.

 

(iv)          Beneficial Interests in Unrestricted Global
Notes to Unrestricted Definitive Notes.  If any holder of a beneficial
interest in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Definitive Note, then, upon
the occurrence of any of the events in subsection (i) or (ii) of Section
2.06(a) hereof and satisfaction
of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall
cause the aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuers shall
execute and the Trustee shall authenticate and mail to the Person designated in
the instructions a Definitive Note in the applicable principal amount.  Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in
such name or names and in such authorized denomination or denominations as the holder
of such beneficial interest shall instruct the Registrar through instructions
from or through the Depositary and the Participant or Indirect Participant.  The Trustee shall mail such Definitive Notes
to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the
Private Placement Legend.

 

(d)           Transfer and Exchange of Definitive Notes for
Beneficial Interests.

 

(i)            Restricted Definitive Notes to Beneficial
Interests in Restricted Global Notes.  If any Holder of a Restricted
Definitive Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:

 

(A)          if the Holder of such Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note, a certificate
from such Holder substantially in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;

 

(B)           if such Restricted Definitive Note is being transferred to a QIB in
accordance with Rule 144A, a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (1) thereof;

 

(C)           if such Restricted Definitive Note is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904, a
certificate substantially in the form of Exhibit B hereto,
including the certifications in item (2) thereof;

 

(D)          if such Restricted Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144, a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (3)(a) thereof;

 

(E)           if such Restricted Definitive Note is being transferred to the Company
or any of its Restricted Subsidiaries, a certificate substantially in the form
of Exhibit B hereto, including the certifications in item (3)(b)
thereof; or

 

(F)           if such Restricted Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate substantially
in the form of Exhibit B hereto, including the certifications in
item (3)(c) thereof,

 

40

 

the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case of clause
(A) above, the applicable Restricted Global Note, in the case of clause (B)
above, the applicable 144A Global Note, and in the case of clause (C) above,
the applicable Regulation S Global Note.

 

(ii)           Restricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes.  A Holder of a Restricted Definitive
Note may exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note only
if:

 

(A)          such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case
of an exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a
Person participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Issuers;

 

(B)           such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement;

 

(C)           such transfer is effected by a Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the Registration Rights
Agreement; or

 

(D)          the Registrar receives the following:

 

(1)           if
the Holder of such Definitive Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder substantially in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or

 

(2)           if
the Holder of such Definitive Notes proposes to transfer such Notes to a Person
who shall take delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder substantially in the
form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain compliance
with the Securities Act.

 

Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase
or cause to be increased the aggregate principal amount of the Unrestricted Global
Note.

 

(iii)          Unrestricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes.  A Holder of an Unrestricted
Definitive Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time.  Upon receipt of
a request for such an exchange or transfer, the Trustee shall cancel the
applicable Unrestricted Definitive Note and increase or cause to be increased
the aggregate principal amount of one of the Unrestricted Global Notes.

 

41

 

If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.

 

(e)           Transfer and Exchange of Definitive Notes for
Definitive Notes.  Upon request by a Holder of Definitive Notes
and such Holder’s compliance with the provisions of this Section 2.06(e), the
Registrar shall register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange,
the requesting Holder shall present or surrender to the Registrar the Definitive
Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney,
duly authorized in writing.  In addition,
the requesting Holder shall provide any additional certifications, documents
and information, as applicable, required pursuant to the following provisions
of this Section 2.06(e):

 

(i)            Restricted Definitive Notes to Restricted
Definitive Notes.  Any Restricted Definitive Note may be transferred
to and registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the following:

 

(A)          if the transfer will be made pursuant to a QIB in accordance with Rule
144A, then the transferor must deliver a certificate substantially in the form
of Exhibit B hereto, including the certifications in item (1)
thereof;

 

(B)           if the transfer will be made pursuant to Rule 903 or Rule 904 then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; or

 

(C)           if the transfer will be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including
the certifications required by item (3) thereof, if applicable.

 

(ii)           Restricted Definitive Notes to Unrestricted
Definitive Notes.  Any Restricted Definitive Note may be exchanged
by the Holder thereof for an Unrestricted Definitive Note or transferred to a
Person or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:

 

(A)          such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case
of an exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a
Person participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Issuers;

 

(B)           any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;

 

(C)           any such transfer is effected by a Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the Registration Rights Agreement;
or

 

42

 

(D)          the Registrar receives the following:

 

(1)           if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes
for an Unrestricted Definitive Note, a certificate from such Holder
substantially in the form of Exhibit C hereto, including the certifications
in item (1)(d) thereof; or

 

(2)           if
the Holder of such Restricted Definitive Notes proposes to transfer such Notes
to a Person who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder substantially in the form of Exhibit B
hereto, including the certifications in item (4) thereof;

 

and,
in each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.

 

(iii)          Unrestricted Definitive Notes to Unrestricted
Definitive Notes.  A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note.  Upon
receipt of a request to register such a transfer, the Registrar shall register
the Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.

 

(f)            Exchange Offer.  Upon
the occurrence of the Exchange Offer in accordance with the Registration Rights
Agreement, the Issuers shall issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee shall authenticate (i) one
or more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not Broker-Dealers, (y) they are not
participating in a distribution of the Exchange Notes and (z) they are not
affiliates (as defined in Rule 144) of the Issuers, and accepted for exchange
in the Exchange Offer and (ii) Unrestricted Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted Definitive
Notes tendered for acceptance by Persons that certify in the applicable Letters
of Transmittal that (x) they are not Broker-Dealers, (y) they are not
participating in a distribution of the Exchange Notes and (z) they are not
affiliates (as defined in Rule 144) of the Issuers, and accepted for exchange
in the Exchange Offer.  Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Issuers shall execute and the Trustee shall authenticate and mail to the
Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive
Notes in the applicable principal amount. 
Any Notes that remain outstanding after the consummation of the Exchange
Offer, and Exchange Notes issued in connection with the Exchange Offer, shall
be treated as a single class of securities under this Indenture.

 

(g)           Legends.  The following legends shall
appear on the face of all Global Notes and Definitive Notes issued under this
Indenture unless specifically stated otherwise in the applicable provisions of
this Indenture:

 

43

 

(i)            Private Placement Legend.

 

(A)          Except as permitted by subparagraph (B) below, each Global Note and
each Definitive Note (and all Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the following form:

 

“THIS NOTE AND
THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES
LAWS.  NEITHER THIS NOTE NOR THE
GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, 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, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.  THE HOLDER OF THIS NOTE AND THE
GUARANTEES ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH 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 NOTE AND THE
GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE
ISSUERS OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A
PERSON IT REASONABLY BELIEVES IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ DEFINED IN
RULE 144A 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 TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E)
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED 

 

44

 

UPON THE REQUEST OF A HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.”

 

(B)           Notwithstanding the foregoing, any Global Note or Definitive Note
issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii),
(e)(ii), (e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) shall not bear the Private Placement Legend.

 

(ii)           Global Note Legend.  Each
Global Note shall bear a legend in substantially the following form:

 

“THIS GLOBAL NOTE IS HELD BY
THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE
IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE
TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS. 
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.  UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55
WATER STREET, NEW YORK, NEW YORK) (“DTC”) 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 SUCH OTHER NAME AS MAY BE REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE 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.”

 

(iii)          Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note shall
bear a legend in substantially the following form:

 

“THE RIGHTS ATTACHING TO
THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE
INDENTURE (AS DEFINED HEREIN).”

 

45

 

(h)           Cancellation and/or Adjustment of Global
Notes.  At such time as all beneficial interests in a
particular Global Note have been exchanged for Definitive Notes or a particular
Global Note has been redeemed, repurchased or canceled in whole and not in
part, each such Global Note shall be returned to or retained and canceled by
the Trustee in accordance with Section 2.11 hereof.  At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note by the Trustee or by the Depositary at the direction
of the Trustee to reflect such reduction; and if the beneficial interest is
being exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note, such other Global
Note shall be increased accordingly and an endorsement shall be made on such
Global Note by the Trustee or by the Depositary at the direction of the Trustee
to reflect such increase.

 

(i)            General Provisions Relating to Transfers and
Exchanges.

 

(i)      To permit registrations of transfers and exchanges, the Issuer shall
execute and the Trustee shall authenticate Global Notes and Definitive Notes
upon receipt of an Authentication Order in accordance with Section 2.02 hereof or
at the Registrar’s request.

 

(ii)     No service charge shall be made to a holder of a beneficial interest in
a Global Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Issuers may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09,
4.10, 4.14 and 9.05 hereof).

 

(iii)    Neither the Registrar nor the Issuers shall be required to register the
transfer of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.

 

(iv)    All Global Notes and Definitive Notes issued upon any registration of
transfer or exchange of Global Notes or Definitive Notes shall be the valid
obligations of the Issuers, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.

 

(v)     The Issuers shall not be required (A) to issue, to register the transfer
of or to exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of business on the day of
selection, (B) to register the transfer of or to exchange any Note so selected
for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part or (C) to register the transfer of or to exchange a Note
between a Record Date and the next succeeding Interest Payment Date.

 

(vi)    Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Issuers may deem and treat the Person in
whose name any Note is registered as the absolute owner of such Note for the purpose
of receiving payment of principal of (and premium, if any) and interest
(including Additional Interest, if any) on such Notes and for all other
purposes, and none of the Trustee, any Agent or the Issuers shall be affected
by notice to the contrary.

 

(vii)   Upon surrender for registration of transfer of any Note at the office
or agency of the Issuers designated pursuant to Section 4.02 hereof, the Issuers shall execute,
and the Trustee shall authenticate and mail, in the name of the designated transferee
or transferees, one or more replacement Notes of any authorized denomination or
denominations of a like aggregate principal amount.

 

46

 

(viii)  At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denomination or denominations of a like aggregate principal
amount upon surrender of the Notes to be exchanged at such office or agency.  Whenever any Global Notes or Definitive Notes
are so surrendered for exchange, the Issuers shall execute, and the Trustee
shall authenticate and mail, the replacement Global Notes and Definitive Notes
which the Holder making the exchange is entitled to in accordance with the
provisions of Section 2.02 hereof.

 

(ix)    All certifications, certificates and Opinions of Counsel required to be
submitted to the Registrar pursuant to this Section 2.06 to effect a registration
of transfer or exchange may be submitted by facsimile.

 

Section 2.07              Replacement Notes.

 

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

 

Every replacement Note is a contractual obligation of the Issuers and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

 

Section 2.08              Outstanding Notes.

 

The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.08 as not outstanding.  Except
as set forth in Section 2.09 hereof, a Note does not cease to be outstanding
because an Issuer or an Affiliate of an Issuer holds the Note.

 

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

 

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

 

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

 

Section 2.09              Treasury Notes.

 

In determining whether the Holders of the required principal amount of Notes
have concurred in any direction, waiver or consent, Notes owned by an Issuer,
or by any Affiliate of an Issuer, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that
a Responsible Officer of the Trustee knows are so owned shall be so disregarded.  Notes so owned which have 

 

47

 

been pledged in good faith shall not be disregarded
if the pledgee establishes to the satisfaction of the Trustee the pledgee’s
right to deliver any such direction, waiver or consent with respect to the
Notes and that the pledgee is not an Issuer or any obligor upon the Notes or
any Affiliate of an Issuer or of such other obligor.

 

Section 2.10              Temporary Notes.

 

Until certificates representing Notes are ready for delivery, the
Issuers may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes.  Temporary
Notes shall be substantially in the form of certificated Notes but may have
variations that the Issuers consider appropriate for temporary Notes and as
shall be reasonably acceptable to the Trustee. 
Without unreasonable delay, the Issuers shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes.

 

Holders and beneficial holders, as the case may be, of temporary Notes shall
be entitled to all of the benefits accorded to Holders, or beneficial holders,
respectively, of Notes under this Indenture.

 

Section 2.11              Cancellation.

 

The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.  The Trustee or, at the direction of the
Trustee, the Registrar or the Paying Agent and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Notes (subject to the record retention
requirement of the Exchange Act).  Certification
of the destruction of all cancelled Notes shall be delivered to the Issuers.  The Issuers may not issue new Notes to
replace Notes that they have paid or that have been delivered to the Trustee
for cancellation.

 

Section 2.12              Defaulted Interest.

 

If the Issuers default in a payment of interest on the Notes, they
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest to the Persons who are Holders
on a subsequent special record date, in each case at the rate provided in the
Notes and in Section 4.01 hereof.  The Issuers
shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment, 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 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 provided in this Section 2.12. 
The Trustee shall fix or cause to be fixed each such special record date
and payment date; provided that no such special record date shall be
less than 10 days prior to the related payment date for such defaulted interest.  The Trustee shall promptly notify the Issuers
of such special record date.  At least 15
days before the special record date, the Issuers (or, upon the written request
of the Issuers, the Trustee in the name and at the expense of the Issuers)
shall mail or cause to be mailed, first-class postage prepaid, to each Holder a
notice at his or her address as it appears in the Note Register that states the
special record date, the related payment date and the amount of such interest
to be paid.

 

Subject to the foregoing provisions of this Section 2.12 and for
greater certainty, each Note delivered under this Indenture upon registration
of transfer of or in exchange for or in lieu of any 

 

48

 

other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.

 

Section 2.13              CUSIP
and ISIN Numbers

 

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

 

ARTICLE
3

REDEMPTION

 

Section 3.01              Notices to Trustee.

 

If the Issuers elect to redeem Notes pursuant to Section 3.07 hereof, they
shall furnish to the Trustee, at least 2 Business Days before notice of
redemption is required to be mailed or caused to be mailed to Holders pursuant
to Section 3.03 hereof but not more than 60 days before a redemption date, an Officer’s
Certificate setting forth (i) the paragraph or subparagraph of such Note and/or
Section of this Indenture pursuant to which the redemption shall occur, (ii)
the redemption date, (iii) the principal amount of the Notes to be redeemed and
(iv) the redemption price.

 

Section 3.02              Selection of Notes to Be Redeemed or
Purchased.

 

If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be
redeemed or purchased (a) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed or (b) on a pro rata basis or, to the extent that selection on a pro rata basis is not practicable, by lot or by such other method
the Trustee considers fair and appropriate. 
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased shall be selected, unless otherwise provided
herein, not less than 30 days nor more than 60 days prior to the redemption date
by the Trustee from the outstanding Notes not previously called for redemption
or purchase.

 

The Trustee shall promptly notify the Issuers in writing of the Notes selected
for redemption or purchase and, in the case of any Note selected for partial redemption
or purchase, the principal amount thereof to be redeemed or purchased.  Notes and portions of Notes selected shall be
in an integral multiple of $1,000 (but in a minimum amount of $2,000);
no Notes of $2,000 or less can be redeemed in part, except that if all of the Notes
of a Holder are to be redeemed or purchased, the entire outstanding amount of
Notes held by such Holder, even if not a multiple of $1,000 (or a minimum
amount of $2,000), shall be redeemed or purchased.  Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption or
purchase also apply to portions of Notes called for redemption or purchase.

 

49

 

Section 3.03              Notice of Redemption.

 

Subject to Section 3.09 hereof, the Issuers shall mail or cause to be mailed
by first-class mail notices of redemption at least 30 days but not more than 60
days prior to the redemption date to each Holder of Notes to be redeemed at such
Holder’s registered address, except that redemption notices may be mailed more than
60 days prior to a redemption date if the notice is issued in connection with
Article 8 or Article 13 hereof.  Except
as set forth in Section 3.07(b) hereof, notices of redemption may not be conditional.

 

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

 

(a)           the redemption date;

 

(b)           the redemption price;

 

(c)           if any Note is to be redeemed in part only, the portion of the principal
amount of that Note that is to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion of the original Note representing the same indebtedness
to the extent not redeemed will be issued in the name of the Holder of the
Notes upon cancellation of the original Note;

 

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

 

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

 

(f)            that, unless the Issuers default in making
such redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;

 

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

 

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

 

(i)            if in connection with a redemption pursuant to
Section 3.07(b) hereof, any condition to such redemption.

 

At the Issuers’ request, the Trustee shall give the notice of
redemption in the names of the Issuers’ and at their expense; provided
that the Issuers shall have delivered to the Trustee, at least 2 Business Days
before notice of redemption is required to be mailed or caused to be mailed to
Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed
to by the Trustee), an Officer’s Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.

 

Section 3.04              Effect of Notice of Redemption.

 

Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price (except as provided for in Section
3.07(b) hereof).  The notice, if mailed
in a manner herein provided, shall be conclusively presumed to have been given,
whether or not the Holder receives such notice. 
In any 

 

50

 

case, failure to give such notice by mail or any
defect in the notice to the Holder of any Note designated for redemption in
whole or in part shall not affect the validity of the proceedings for the redemption
of any other Note.  Subject to Section
3.05 hereof, on and after the redemption date, interest ceases to accrue on
Notes or portions of Notes called for redemption.

 

Section 3.05              Deposit of Redemption or Purchase Price.

 

Prior to 10:00 a.m. (New York City time) on the redemption or purchase date,
the Issuers shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption or purchase price of and accrued and unpaid
interest (including Additional Interest, if any) on all Notes to be redeemed or
purchased on that date.  The Trustee or
the Paying Agent shall promptly return to the Issuers any money deposited with
the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary
to pay the redemption price of, and accrued and unpaid interest on, all Notes
to be redeemed or purchased.

 

If the Issuers comply with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption or purchase.  If a Note is redeemed or purchased on or
after a Record Date but on or prior to the related Interest Payment Date, then
any accrued and unpaid interest to the redemption or purchase date shall be
paid to the Person in whose name such Note was registered at the close of
business on such Record Date.  If any
Note called for redemption or purchase shall not be so paid upon surrender for
redemption or purchase because of the failure of the Issuers to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption or purchase date until such principal is paid, and to the extent
lawful on any interest accrued to the redemption or purchase date not paid on
such unpaid principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.

 

Section 3.06              Notes Redeemed or Purchased in Part.

 

Upon surrender of a Note that is redeemed or purchased in part, the Issuers
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Issuers a new Note equal in principal amount to the unredeemed or
unpurchased portion of the Note surrendered representing the same indebtedness
to the extent not redeemed or purchased; provided that each new Note
will be in a principal amount of $2,000 or an integral multiple of $1,000 in
excess thereof.  It is understood that,
notwithstanding anything in this Indenture to the contrary, only an
Authentication Order and not an Opinion of Counsel or Officer’s Certificate is
required for the Trustee to authenticate such new Note.

 

Section 3.07              Optional Redemption.

 

(a)           At any time
prior to November 15, 2010, the Issuers may redeem all or a part of the Notes,
upon not less than 30 nor more than 60 days prior notice mailed by first-class
mail to the registered address of each Holder or otherwise delivered in
accordance with the procedures of DTC, at a redemption price equal to 100% of
the principal amount of the Notes redeemed plus the Applicable Premium as of,
and accrued and unpaid interest and Additional Interest, if any, to the date of
redemption (the “Redemption Date”),
subject to the rights of Holders on the relevant Record Date to receive
interest due on the relevant Interest Payment Date.

 

(b)           Until November
15, 2009, the Issuers may, at their option, redeem up to 35% of the aggregate
principal amount of Notes issued by them at a redemption price equal to 111.75%
of the aggregate principal amount thereof, plus accrued and unpaid interest
thereon and Additional Interest, if any, to the applicable Redemption Date,
subject to the right of Holders of Notes of record on the relevant Record Date
to receive interest due on the relevant Interest Payment Date, with the net
cash proceeds of 

 

51

 

one or more Equity Offerings; provided that at least 65% of the
aggregate principal amount of Notes originally issued under this Indenture and
any Additional Notes that are Notes issued under this Indenture after the Issue
Date (excluding Notes and Additional Notes held by the Issuers or Subsidiaries
or Affiliates of the Issuers) remains outstanding immediately after the
occurrence of each such redemption; provided  further that each such
redemption occurs within 90 days of the date of closing of each such Equity
Offering.  Notice of any redemption upon
any Equity Offering may be given prior to the completion thereof, and any such
redemption or notice may, at the Issuers’ discretion, be subject to one or more
conditions precedent, including, but not limited to, the completion of the
related Equity Offering.

 

(c)           Except pursuant
to clause (a) or (b) of this Section 3.07, the Notes will not be redeemable at
the Issuers’ option prior to November 15, 2010.

 

(d)           On and after November
15, 2010, the Issuers may redeem the Notes, in whole or in part, upon not less
than 30 nor more than 60 days prior notice by first-class mail, postage prepaid,
with a copy to the Trustee, to each Holder at the address of such Holder
appearing in the security register, at the redemption prices (expressed as
percentages of principal amount of the Notes to be redeemed) set forth below,
plus accrued and unpaid interest thereon and Additional Interest, if any, to
the applicable Redemption Date, subject to the right of Holders of record on
the relevant Record Date to receive interest due on the relevant Interest
Payment Date, if redeemed during the twelve-month period beginning on November
15 of each of the years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  
	
   

  	
   

  	
   

  
	
  2010

  	
   

  	
  105.875%

  
	
  2011

  	
   

  	
  102.938%

  
	
  2012 and thereafter

  	
   

  	
  100.000%

  

 

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

 

Section 3.08              Mandatory Redemption.

 

The Issuers shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.

 

Section 3.09              Offers to Repurchase by Application of Excess
Proceeds.

 

(a)           In the event that, pursuant to Section 4.10
hereof, the Issuers shall be required to commence an Asset Sale Offer, they
shall follow the procedures specified below.

 

(b)           The Asset Sale Offer shall remain open for a
period of 20 Business Days following its commencement and no longer, except to
the extent that a longer period is required by applicable law (the “Offer
Period”).  No later than five Business
Days after the termination of the Offer Period (the “Purchase Date”), the
Issuers shall apply all Excess Proceeds (the “Offer Amount”) to the
purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata basis, if applicable), or, if less than the Offer
Amount has been tendered, all Notes and Pari Passu Indebtedness tendered in response
to the Asset Sale Offer.  Payment for any
Notes so purchased shall be made in the same manner as interest payments are
made.

 

(c)           If the Purchase Date is on or after a Record
Date and on or before the related Interest Payment Date, any accrued and unpaid
interest and Additional Interest, if any, up to but excluding 

 

52

 

the
Purchase Date, shall 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 shall
be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

 

(d)           Upon the commencement of an Asset Sale Offer,
the Issuers shall send, by first-class mail, a notice to each of the Holders,
with a copy to the Trustee.  The notice
shall contain all instructions and materials necessary to enable such Holders
to tender Notes pursuant to the Asset Sale Offer.  The Asset Sale Offer shall be made to all
Holders and holders of Pari Passu Indebtedness. 
The notice, which shall govern the terms of the Asset Sale Offer, shall
state:

 

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

 

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

 

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

 

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

 

(v)           that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may elect to have Notes purchased in integral multiples of $1,000 (but in a minimum amount of $2,000);

 

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

 

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

 

(viii)        that, if the aggregate principal amount of Notes and Pari Passu Indebtedness
surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall
select the Notes and such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal
amount of the Notes or such Pari Passu Indebtedness tendered (with such
adjustments as may be deemed appropriate by the Trustee so that only Notes in
denominations of $2,000, or integral multiples of $1,000 in excess thereof, shall
be purchased); and

 

(ix)           that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer) representing the same
indebtedness to the extent not repurchased.

 

(e)           On or before the Purchase Date, the Issuers
shall, to the extent lawful, (1) accept for payment, on a pro rata
basis to the extent necessary, the Offer Amount of Notes or portions thereof validly
tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has
been tendered, all 

 

53

 

Notes
tendered and (2) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officer’s Certificate stating the aggregate
principal amount of Notes or portions thereof so tendered.

 

(f)            The Issuers, the Depositary or the Paying
Agent, as the case may be, shall promptly mail or deliver to each tendering
Holder an amount equal to the purchase price of the Notes properly tendered by
such Holder and accepted by the Issuers for purchase, and the Issuers shall
promptly issue a new Note, and the Trustee, upon receipt of an Authentication
Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry)
such new Note to such Holder (it being understood that, notwithstanding
anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s
Certificate is required for the Trustee to authenticate and mail or deliver
such new Note) in a principal amount equal to any unpurchased portion of the
Note surrendered representing the same indebtedness to the extent not
repurchased; provided, that each such new Note shall be in a principal
amount of $2,000 or an integral multiple of $1,000 in excess thereof.  Any Note not so accepted shall be promptly
mailed or delivered by the Issuers to the Holder thereof.  The Issuers shall publicly announce the
results of the Asset Sale Offer on or as soon as practicable after the Purchase
Date.

 

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

 

ARTICLE
4

COVENANTS

 

Section 4.01              Payment of Notes.

 

The Issuers shall pay or cause to be paid the principal of, premium, if
any, Additional Interest, if any, and interest on the Notes on the dates and in
the manner provided in the Notes.  Principal,
premium, if any, Additional Interest, if any, and interest shall be considered
paid on the date due if the Paying Agent, if other than an Issuer or a Subsidiary,
holds as of noon Eastern Time on the due date money deposited by the Issuers in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due.

 

The Issuers shall pay all Additional Interest, if any, in the same
manner on the dates and in the amounts set forth in the Registration Rights
Agreement.

 

The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the
then applicable interest rate on the Notes to the extent lawful; they shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Additional Interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.

 

Section 4.02              Maintenance of Office or Agency.

 

The Issuers shall maintain in the Borough of Manhattan in the City of
New York an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Issuers in respect of the Notes and this Indenture may
be served.  The Issuers shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency.  If at any time
the Issuers shall fail to maintain any such required office or agency or shall 

 

54

 

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.

 

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

 

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

 

Section 4.03              Reports and Other Information.

 

(a)           Notwithstanding
that the Company may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act or otherwise report on an annual and quarterly
basis on forms provided for such annual and quarterly reporting pursuant to
rules and regulations promulgated by the SEC, the Company shall file with the
SEC (and make available to the Trustee and Holders of the Notes (without exhibits),
without cost to any Holder, within 15 days after the Company files them
with the SEC) from and after the Issue Date,

 

(1)           within 90 days (or any other time period
then in effect under the rules and regulations of the Exchange Act with respect
to the filing of a Form 10-K by a non-accelerated filer) after the end of
each fiscal year, annual reports on Form 10-K, or any successor or comparable
form, containing the information required to be contained therein, or required
in such successor or comparable form;

 

(2)           within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, reports on Form 10-Q containing
all quarterly information that would be required to be contained in Form 10-Q,
or any successor or comparable form;

 

(3)           promptly from time to time after the
occurrence of an event required to be therein reported, such other reports on
Form 8-K, or any successor or comparable form; and

 

(4)           any other information, documents and other
reports that the Company would be required to file with the SEC if it were
subject to Section 13 or 15(d) of the Exchange Act;

 

in each case, in a manner that complies in all material respects with the requirements specified in such form; provided
that the Company shall not be so obligated to file such reports with the SEC if
the SEC does not permit such filing, in which event the Company shall make
available such information to prospective purchasers of Notes, in addition to
providing such information to the Trustee and the Holders of the Notes, in each
case within 15 days after the time the Company would be required to file such
information with the SEC, if it were subject to Section 13 or 15(d) of the
Exchange Act.  In addition, to the extent
not satisfied by the foregoing, for so long as any Notes are outstanding, the Company
shall furnish to Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.

 

(b)           In the event
that any direct or indirect parent company of the Company becomes a guarantor
of the Notes, the Company may satisfy its obligations under this Section 4.03 with
respect to financial information relating to the Company by furnishing financial
information relating to such parent 

 

55

 

company; provided
that the same is accompanied by consolidating information that explains in
reasonable detail the differences between the information relating to such
parent, on the one hand, and the information relating to the Company and its
Restricted Subsidiaries on a standalone basis, on the other hand.

 

(c)           Notwithstanding the foregoing, the requirements
of this Section 4.03 shall be deemed satisfied prior to the commencement of the
Exchange Offer or the effectiveness of the Shelf Registration Statement (1) by
the filing with the SEC of the Exchange Offer Registration Statement or Shelf Registration
Statement (or any other registration statement), and any amendments thereto,
with such financial information that satisfies Regulation S-X of the
Securities Act or (2) by posting reports that would be required to be filed
substantially in the form required by the SEC on the Company’s website (or on
the website of any of its parent companies) or providing such reports to the
Trustee, with financial information that satisfied Regulation S-X of the
Securities Act, subject to exceptions consistent with the presentation of
financial information in the Offering Memorandum, to the extent filed within
the times specified above.

 

Section 4.04              Compliance Certificate.

 

(a)           Each Issuer and Guarantor (to the extent that
such Guarantor is so required under the Trust Indenture Act) shall deliver to
the Trustee, within 90 days after the end of each fiscal year ending after the
Issue Date, a certificate from the principal executive officer, principal
financial officer or principal accounting officer stating that a review of the
activities of such Issuer and, in the case of the Company, its Restricted Subsidiaries,
during the preceding fiscal year has been made under the supervision of the signing
Officer with a view to determining whether such Issuer has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to such Officer signing such certificate, that to the best of his
or her knowledge such Issuer has kept, observed, performed and fulfilled each
and every condition and covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions,
covenants and conditions of this Indenture (or, if a Default shall have occurred,
describing all such Defaults of which he or she may have knowledge and what
action such Issuer is taking or proposes to take with respect thereto).

 

(b)           When any Default has occurred and is
continuing under this Indenture, or if the Trustee or the holder of any other
evidence of Indebtedness of the Issuers or any of their respective Subsidiaries
gives any notice or takes any other action with respect to a claimed Default,
the Issuers shall promptly (which shall be no more than five (5) Business Days)
deliver to the Trustee by registered or certified mail or by facsimile
transmission an Officer’s Certificate specifying such event and what action the
Issuers propose to take with respect thereto.

 

Section 4.05              Taxes.

 

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

 

Section 4.06              Stay, Extension and Usury Laws.

 

Each of the Issuers and the Guarantors covenant (to the extent that they
may lawfully do so) that they shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and each of
the Issuers and each of the Guarantors (to the extent that they may lawfully do
so) hereby expressly waive all benefit or advantage 

 

56

 

of any such law, and covenant that they shall not,
by resort to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law has been enacted.

 

Section 4.07              Limitation on Restricted Payments.

 

(a)           The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly:

 

(I)            declare or pay any dividend or make any
payment or distribution on account of the Company’s, or any of its Restricted
Subsidiaries’ Equity Interests, including, without limitation, payable in
connection with any merger or consolidation other than:

 

(A)          dividends or
distributions by the Company payable solely in Equity Interests (other than
Disqualified Stock) of the Company; or

 

(B)           dividends,
payments or distributions by a Restricted Subsidiary so long as, in the case of
any dividend, payment or distribution payable on or in respect of any class or
series of securities issued by a Restricted Subsidiary other than a Wholly-Owned
Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in
accordance with its Equity Interests in such class or series of securities;

 

(II)           purchase, redeem, defease or otherwise
acquire or retire for value any Equity Interests of the Company, or any direct
or indirect parent of the Company, including, without limitation, in connection
with any merger or consolidation;

 

(III)         make any principal payment on, or redeem,
repurchase, defease or otherwise acquire or retire for value in each case,
prior to any scheduled repayment, sinking fund payment or maturity, any
Subordinated Indebtedness, other than (a) Indebtedness permitted under clauses
(7) and (8) of the covenant described under Section 4.09 or (b) the purchase,
repurchase or other acquisition of Subordinated Indebtedness 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 or acquisition; or

 

(IV)         make any Restricted Investment

 

(all such payments and other actions set forth in clauses (I) through
(IV) above (other than any exceptions thereof) being collectively referred to
as “Restricted Payments”),
unless, at the time of such Restricted Payment:

 

(1)           no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof;

 

(2)           immediately after giving effect to such
transaction on a pro forma basis, the Company
could incur $1.00 of additional Indebtedness under Section 4.09(a); and

 

(3)           such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the Issue Date (including Restricted Payments
permitted by clauses (1), (2) (with respect to the payment of dividends on
Refunding Capital Stock pursuant to clause (b) thereof only), (6)(c), (9) and
(14) (to the 

 

57

 

extent not deducted in calculating
Consolidated Net Income) of Section 4.07(b), but excluding all other Restricted
Payments permitted by Section 4.07(b)), is less than the sum of (without duplication):

 

(a)           50% of the
Consolidated Net Income of the Company for the period (taken as one accounting
period) beginning October 1, 2006, to the end of the Company’s most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment, or, in the case such
Consolidated Net Income for such period is a deficit, minus 100% of such
deficit; plus

 

(b)           100% of the aggregate net
cash proceeds and the fair market value, as determined in good faith by the Company,
of marketable securities or other property received by the Company since
immediately after the Issue Date (other than net cash proceeds to the extent such
net cash proceeds have been used to incur Indebtedness, Disqualified Stock or
Preferred Stock pursuant to clause (12)(a) of Section 4.09(b) hereof) from the
issue or sale of:

 

(i)            (A) Equity Interests of the Company,
including Treasury Capital Stock, but excluding cash proceeds and the fair
market value, as determined in good faith by the Company, of marketable securities
or other property received from the sale of:

 

(x)            Equity Interests to members
of management, directors or consultants of the Company, any direct or indirect
parent company of the Company and the Company’s Subsidiaries after the Issue
Date to the extent such amounts have been applied to Restricted Payments made
in accordance with clause (4) of Section 4.07(b) hereof; and

 

(y)           Designated Preferred Stock;
and

 

(B)
to the extent such net cash proceeds are actually contributed to the Company as
equity (other than Disqualified Stock), Equity Interests of any of the Company’s
direct or indirect parent companies (excluding contributions of the proceeds
from the sale of Designated Preferred Stock of any such companies or contributions
to the extent such amounts have been applied to Restricted Payments made in
accordance with clause (4) of Section 4.07(b) hereof); or

 

(ii)           debt securities of the Company
that have been converted into or exchanged for such Equity Interests of the Company;

 

provided, however, that this clause (b) shall not include the
proceeds from (W) Refunding Capital Stock, (X) Equity Interests or debt
securities of the Company sold to a Restricted Subsidiary, as the case may be,
(Y) Disqualified Stock or debt securities that have been converted into
Disqualified Stock or (Z) Excluded Contributions; plus

 

(c)           100% of the
aggregate amount of cash and the fair market value, as determined in good faith
by the Company, of marketable securities or other property contributed to the
capital of the Company (other than as Disqualified Stock) following the Issue
Date (other than net cash proceeds to the extent such net cash proceeds (i) have
been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant
to clause (12)(a)

 

58

 

of Section 4.09(b) hereof, (ii) are contributed by a
Restricted Subsidiary or (iii) constitute an Excluded Contribution); plus

 

(d)           100% of the aggregate amount
received in cash and the fair market value, as determined in good faith by the Company,
of marketable securities or other property received by means of:

 

(i)            the sale or other
disposition (other than to the Company or a Restricted Subsidiary) of Restricted
Investments made by the Company or its Restricted Subsidiaries and repurchases
and redemptions of such Restricted Investments from the Company or its
Restricted Subsidiaries and repayments of loans or advances, and releases of
guarantees, which constitute Restricted Investments by the Company or its
Restricted Subsidiaries, in each case after the Issue Date; or

 

(ii)           the sale (other than to the Company
or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a
distribution from an Unrestricted Subsidiary (other than in each case to the
extent the Investment in such Unrestricted Subsidiary was made by the Company
or a Restricted Subsidiary pursuant to clause (7) of Section 4.07(b)
hereof or to the extent such Investment constituted a Permitted Investment) or
a dividend from an Unrestricted Subsidiary after the Issue Date; plus

 

(e)           in the case of
the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary
after the Issue Date, the fair market value of the Investment in such
Unrestricted Subsidiary, as determined by the Company in good faith or if, in
the case of an Unrestricted Subsidiary, such fair market value may exceed $20.0 million,
in writing by an Independent Financial Advisor, at the time of the
redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary other
than an Unrestricted Subsidiary to the extent the Investment in such
Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary
pursuant to clause (7) of Section 4.07(b) hereof or to the extent such
Investment constituted a Permitted Investment.

 

(b)           The foregoing provisions of Section 4.07(a)
hereof shall not prohibit:

 

(1)           the payment of any dividend within 60 days
after the date of declaration thereof, if at the date of declaration such
payment would have complied with the provisions of this Indenture;

 

(2)           (a) the redemption, repurchase, retirement or
other acquisition of any Equity Interests (“Treasury Capital Stock”) or Subordinated Indebtedness of the Company or
any Equity Interests of any direct or indirect parent company of the Company,
in exchange for, or out of the proceeds of the substantially concurrent sale
(other than to a Restricted Subsidiary) of, Equity Interests of the Company or
any direct or indirect parent company of the Company to the extent contributed
to the Company (in each case, other than any Disqualified Stock) (“Refunding Capital Stock”) and (b)
if immediately prior to the retirement of Treasury Capital Stock, the
declaration and payment of dividends thereon was permitted under clause (6) of
this Section 4.07(b), the declaration and payment of dividends on the Refunding
Capital Stock (other than Refunding Capital Stock the proceeds of which were
used to redeem, repurchase, retire or otherwise acquire any Equity Interests of
any direct or indirect parent company of the Company) in an aggregate amount 

 

59

 

no greater than the aggregate amount per year
of dividends per annum that were declarable and payable on such Treasury
Capital Stock immediately prior to such retirement;

 

(3)           the redemption, repurchase or other
acquisition or retirement of Subordinated Indebtedness of the Issuers or a
Guarantor made in exchange for, or out of the proceeds of the substantially
concurrent sale of, new Indebtedness of the Issuers or a Guarantor, as the case
may be, which is incurred in compliance with Section 4.09 hereof so long as:

 

(a)           the principal
amount (or accreted value, if applicable) of such new Indebtedness does not
exceed the principal amount of (or accreted value, if applicable), plus any
accrued and unpaid interest on, the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired for value, plus the amount of any
reasonable premium to be paid (including reasonable premiums) and any
reasonable fees and expenses incurred in connection with the issuance of such
new Indebtedness;

 

(b)           such new
Indebtedness is subordinated to the Notes or the applicable Guarantee at least
to the same extent as such Subordinated Indebtedness so purchased, exchanged,
redeemed, repurchased, acquired or retired for value;

 

(c)           such new
Indebtedness has a final scheduled maturity date equal to or later than the
final scheduled maturity date of the Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired; and

 

(d)           such new
Indebtedness has a Weighted Average Life to Maturity equal to or greater than
the remaining Weighted Average Life to Maturity of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired;

 

(4)           a Restricted Payment to pay for the
repurchase, redemption or other acquisition or retirement for value of Equity
Interests (other than Disqualified Stock) of the Company or any of its direct
or indirect parent companies held by any future, present or former employee,
director or consultant of the Company, any of its Restricted Subsidiaries or
any of its direct or indirect parent companies pursuant to any management
equity plan or stock option plan or any other management or employee benefit
plan or agreement, including any Equity Interests in Encore rolled over by
management of the Company in connection with the Transactions; provided, however, that the aggregate Restricted Payments made
under this clause (4) do not exceed in any calendar year $5.0 million
(which shall increase to $10.0 million subsequent to the consummation of an
underwritten public Equity Offering by the Company or any direct or indirect
parent corporation of the Company) (with unused amounts in any calendar year
being carried over to succeeding calendar years subject to a maximum (without
giving effect to the following proviso) of $10.0 million in any calendar year
(which shall increase to $20.0 million subsequent to the consummation of an
underwritten public Equity Offering by the Company or any direct or indirect
parent of the Company)); provided  further that such amount in
any calendar year may be increased by an amount not to exceed:

 

(a)           the cash
proceeds from the sale of Equity Interests (other than Disqualified Stock) of
the Company and, to the extent contributed to the Company, Equity Interests of
any of the Company’s direct or indirect parent companies, in each case to
members of management, directors or consultants of the Company, any of its
Subsidiaries or any of its direct or indirect parent companies that occurs
after the Issue Date, to the extent the cash proceeds from the sale of such
Equity Interests have not otherwise been 

 

60

 

applied to the payment of Restricted Payments by
virtue of clause (3) of Section 4.07(a) hereof; plus

 

(b)           the cash
proceeds of key man life insurance policies received by the Company or its
Restricted Subsidiaries after the Issue Date; less

 

(c)           the amount of
any Restricted Payments previously made with the cash proceeds described in
clauses (a) and (b) of this clause (4);

 

and provided  further
that cancellation of Indebtedness owing to the Company or any of its Restricted
Subsidiaries from members of management of the Company, any of the Company’s
direct or indirect parent companies or any of the Company’s Subsidiaries in
connection with a repurchase of Equity Interests of the Company or any of its
direct or indirect parent companies will not be deemed to constitute a
Restricted Payment for purposes of this Section 4.07 or any other provision of this
Indenture;

 

(5)           the declaration and payment of dividends to
holders of any class or series of Disqualified Stock of the Company or any of
its Restricted Subsidiaries and of Preferred Stock of any Restricted Subsidiary
issued in accordance with Section 4.09 hereof to the extent such dividends are
included in the definition of “Fixed Charges”;

 

(6)           (a) the declaration and payment of dividends
to holders of any class or series of Designated Preferred Stock (other than
Disqualified Stock) issued by the Company after the Issue Date;

 

(b)           the declaration and payment of dividends to a
direct or indirect parent company of the Company, the proceeds of which will be
used to fund the payment of dividends to holders of any class or series of
Designated Preferred Stock (other than Disqualified Stock) of such parent
corporation issued after the Issue Date, provided that the amount of
dividends paid pursuant to this clause (b) shall not exceed the aggregate
amount of cash actually contributed to the Company from the sale of such
Designated Preferred Stock; or

 

(c)           the declaration and payment of dividends on
Refunding Capital Stock that is Preferred Stock in excess of the dividends
declarable and payable thereon pursuant to clause (2) of this Section 4.07(b);

 

provided, however, in the case of each of (a) and
(c) of this clause (6), that for the most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date of issuance of such Designated Preferred Stock or the declaration of such
dividends on Refunding Capital Stock that is Preferred Stock, after giving
effect to such issuance or declaration on a pro forma
basis, the Company and its Restricted Subsidiaries on a consolidated basis
would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

 

(7)           if the Total Leverage Ratio of the Company is less than 6.00 to 1.00 on
a pro forma basis after giving effect to
such Investment, Investments in Unrestricted Subsidiaries having an aggregate
fair market value, taken together with all other Investments made pursuant to
this clause (7) that are at the time outstanding, without giving effect to the
sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do
not consist of cash or marketable securities, not to exceed $20.0 million (with
the fair market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value);

 

61

 

(8)           repurchases of Equity Interests deemed to
occur upon exercise of stock options or warrants if such Equity Interests
represent a portion of the exercise price of such options or warrants;

 

(9)           the declaration and payment of dividends on
the Company’s common stock (or the payments of dividends to any direct or
indirect parent entity to fund payments of dividends on such entity’s common
stock), following the consummation of an underwritten public offering of the Company’s
common stock or the common stock of any of its direct or indirect parent
companies after the Issue Date, of up to 6% per annum of the net cash proceeds
received by or contributed to the Company in or from any such public offering,
other than public offerings with respect to the Company’s common stock registered
on Form S-8 and other than any public sale constituting an Excluded
Contribution;

 

(10)         Restricted Payments that are made with
Excluded Contributions;

 

(11)         if the Total Leverage Ratio of the Company is
less than 6.00 to 1.00 on a pro forma basis
after giving effect to such Restricted Payment, other Restricted Payments in an
aggregate amount taken together with all other Restricted Payments made pursuant
to this clause (11) not to exceed $10.0 million;

 

(12)         distributions or payments of Receivables
Fees;

 

(13)         any Restricted Payment made as part of the
Transaction, and the fees and expenses related thereto, or used to fund amounts
owed to Affiliates (including dividends to any direct or indirect parent of the
Company to permit payment by such parent of such amounts), in each case to the
extent permitted by (or, in the case of a dividend to fund such payment, to the
extent such payment, if made by the Company, would be permitted by) Section
4.11 hereof;

 

(14)         the repurchase, redemption or other
acquisition or retirement for value of any Subordinated Indebtedness in accordance
with the provisions similar to those described under Sections 4.10 and Section 4.14
hereof; provided that
all Notes tendered by Holders in connection with a Change of Control Offer or
Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired
for value;

 

(15)         the declaration and payment of dividends by
the Company to, or the making of loans to, any direct or indirect parent in
amounts required for any direct or indirect parent companies to pay, in each
case without duplication,

 

(a)           franchise taxes
and other fees, taxes and expenses required to maintain their corporate
existence;

 

(b)           federal, state
and local income taxes, to the extent such income taxes are attributable to the
income of the Company and its Restricted Subsidiaries and, to the extent of the
amount actually received from its Unrestricted Subsidiaries, in amounts
required to pay such taxes to the extent attributable to the income of such Unrestricted
Subsidiaries; provided that in each case the amount of such payments in
any fiscal year does not exceed the amount that the Company and its Restricted
Subsidiaries would be required to pay in respect of federal, state and local
taxes for such fiscal year were the Company, its Restricted Subsidiaries and
its Unrestricted Subsidiaries (to the extent described above) to pay such taxes
separately from any such parent entity;

 

62

 

(c)           customary
salary, bonus and other benefits payable to officers and employees of any
direct or indirect parent company of the Company to the extent such salaries,
bonuses and other benefits are attributable to the ownership or operation of
the Company and its Restricted Subsidiaries;

 

(d)           general
corporate operating and overhead costs and expenses of any direct or indirect
parent company of the Company to the extent such costs and expenses are
attributable to the ownership or operation of the Company and its Restricted
Subsidiaries; and

 

(e)           fees and
expenses other than to Affiliates of the Company related to any unsuccessful
equity or debt offering of such parent entity; and

 

(16)         the distribution, dividend or otherwise, of
shares of Capital Stock of, or Indebtedness owed to the Company or a Restricted
Subsidiary by Unrestricted Subsidiaries (other than Unrestricted
Subsidiaries, the primary assets of which are cash and/or Cash Equivalents or
were contributed to such Unrestricted Subsidiary in anticipation of such
distribution, dividend or other payment);

 

provided, however, that at the time of, and after giving
effect to, any Restricted Payment permitted under clauses (7), (11) and
(16) of this Section 4.07(b), no Default shall have occurred and be continuing
or would occur as a consequence thereof.

 

(c)           The Company shall not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to the last
sentence of the definition of “Unrestricted Subsidiary.”  For purposes of designating any Restricted
Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company
and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary
so designated shall be deemed to be Restricted Payments in an amount determined
as set forth in the last sentence of the definition of “Investment.”  Such designation shall be permitted only if a
Restricted Payment in such amount would be permitted at such time, whether
pursuant to Section 4.07(a) hereof or under clause (7), (10) or (11) of Section
4.07(b) hereof, or pursuant to the definition of “Permitted Investments,” and
if such Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.

 

Section 4.08              Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.

 

(a)           The Company shall
not, and shall not permit any of its Restricted Subsidiaries that are not
Guarantors to, directly or indirectly, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary that is not a Guarantor to:

 

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

 

(B)  pay any liabilities owed to
the Company or any of its Restricted Subsidiaries;

 

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

 

63

 

(3)           sell, lease or transfer any of its properties
or assets to the Company or any of its Restricted Subsidiaries.

 

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

 

(1)           contractual encumbrances or restrictions in
effect on the Issue Date, including pursuant to the Senior Credit Facilities
and the related documentation;

 

(2)           this Indenture and the Notes;

 

(3)           purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature discussed in clause (3) of Section 4.08(a) hereof on the property so
acquired;

 

(4)           applicable law or any applicable rule, regulation
or order;

 

(5)           any agreement or other instrument of a Person
acquired by the Company or any Restricted Subsidiaries in existence at the time
of such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any Person, or the properties
or assets of any Person, other than the Person and its Subsidiaries, or the
property or assets of the Person and its Subsidiaries, so acquired;

 

(6)           contracts for the sale of assets, including
customary restrictions with respect to a Subsidiary of the Company pursuant to
an agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary;

 

(7)           Secured Indebtedness otherwise permitted to be
incurred pursuant to Section 4.09 hereof and Section 4.12 hereof that limit the
right of the debtor to dispose of the assets securing such Indebtedness;

 

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

 

(9)           other Indebtedness, Disqualified Stock or
Preferred Stock of Foreign Subsidiaries permitted to be incurred subsequent to
the Issue Date pursuant to the provisions of Section 4.09 hereof;

 

(10)         customary provisions in joint venture
agreements and other similar agreements relating solely to such joint venture;

 

(11)         customary provisions contained in leases or
licenses of intellectual property and other agreements, in each case, entered
into in the ordinary course of business;

 

(12)         any encumbrances or restrictions of the type
referred to in clauses (1), (2) and (3) of Section 4.08(a) hereof imposed by
any amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (1) through (11) of this Section 4.08(b); provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are, in the good faith
judgment of the Company, no more restrictive with respect to such encumbrance
and other restrictions taken as a whole than those prior to such 

 

64

 

amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing; and

 

(13)         restrictions created in connection with any Receivables Facility that,
in the good faith determination of the Company are necessary or advisable to
effect the transactions contemplated under such Receivables Facility.

 

Section 4.09              Limitation on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock.

 

(a)           The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including
Acquired Indebtedness) and the Company shall not issue any shares of
Disqualified Stock and shall not permit any Restricted Subsidiary to issue any
shares of Disqualified Stock or Preferred Stock; provided, however,
that the Company may incur Indebtedness (including Acquired Indebtedness) or
issue shares of Disqualified Stock, and any of its Restricted Subsidiaries may
incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified
Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio
on a consolidated basis for the Company and its Restricted Subsidiaries’ most
recently ended four fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional Indebtedness
is incurred or such Disqualified Stock or Preferred Stock is issued would have
been at least 2.00 to 1.00, determined on a pro
forma basis (including a pro
forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock or Preferred
Stock had been issued, as the case may be, and the application of proceeds
therefrom had occurred at the beginning of such four-quarter period.

 

(b)           The provisions of Section 4.09(a) hereof shall not
apply to:

 

(1)           the incurrence of Indebtedness under Credit
Facilities by the Company or any of its Restricted Subsidiaries and the
issuance and creation of letters of credit and bankers’ acceptances thereunder
(with letters of credit and bankers’ acceptances being deemed to have a
principal amount equal to the face amount thereof), up to an aggregate
principal amount outstanding at any one time of $400.0 million, plus the lesser
of (a) $50 million and (b) an amount equal to the Secured Indebtedness Amount
on the date on which such Indebtedness is to be incurred less the amount of
Secured Indebtedness of the Company and its Restricted Subsidiaries on a consolidated
basis outstanding on the date of such incurrence;

 

(2)           the incurrence by the Company and any
Guarantor of Indebtedness represented by the Notes (including any Guarantee)
(other than any Additional Notes) and any notes (including Guarantees thereof)
issued in exchange for the Notes pursuant to the Registration Rights Agreement
or similar agreement;

 

(3)           Indebtedness of the Company and its Restricted
Subsidiaries in existence on the Issue Date (other than Indebtedness described
in clauses (1) and (2) of this Section 4.09(b));

 

(4)           Indebtedness (including Capitalized Lease
Obligations), Disqualified Stock and Preferred Stock incurred by the Company or
any of its Restricted Subsidiaries, to finance the purchase, lease or
improvement of property (real or personal) or equipment (other than software)
that is used or useful in a Similar Business, whether through the direct
purchase of assets or the Capital Stock of any Person owning such assets, in an
aggregate principal amount at the date of such incurrence (including all Refinancing
Indebtedness Incurred to refinance any other Indebtedness 

 

65

 

incurred pursuant to this Section 4.09(b)(4))
not to exceed $20.0 million; provided, however, that such
Indebtedness exists at the date of such purchase or transaction or is created
within 270 days thereafter (it being understood that any Indebtedness, Disqualified
Stock or Preferred Stock incurred pursuant to this clause (4) shall cease to be
deemed incurred or outstanding for purposes of this Section 4.09(b)(4) but
shall be deemed incurred for the purposes of Section 4.09(a) hereof from and
after the first date on which the Company or such Restricted Subsidiary could
have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section
4.09(a) hereof without reliance on this Section 4.09(b)(4));

 

(5)           Indebtedness incurred by the Company or any
of its Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including letters of credit in respect of workers’ compensation claims, or
other Indebtedness with respect to reimbursement type obligations regarding
workers’ compensation claims; provided, however, that upon the
drawing of such letters of credit or the incurrence of such Indebtedness, such
obligations are reimbursed within 30 days following such drawing or incurrence;

 

(6)           Indebtedness arising from agreements of the Company
or its Restricted Subsidiaries providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary, other
than guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or a Subsidiary for the purpose of financing
such acquisition; provided, however, that

 

(A)          such
Indebtedness is not reflected on the balance sheet of the Company, or any of
its Restricted Subsidiaries (Contingent Obligations referred to in a footnote
to financial statements and not otherwise reflected on the balance sheet will
not be deemed to be reflected on such balance sheet for purposes of this subclause
(A)); and

 

(B)           the maximum
assumable liability in respect of all such Indebtedness shall at no time exceed
the gross proceeds including non-cash proceeds (the fair market value of such
non-cash proceeds being measured at the time received and without giving effect
to any subsequent changes in value) actually received by the Company and its
Restricted Subsidiaries in connection with such disposition;

 

(7)           Indebtedness of the Company to a Restricted
Subsidiary; provided
that any such Indebtedness owing to a Restricted Subsidiary that is not the
Co-Issuer or a Guarantor is expressly subordinated in right of payment to the
Notes; provided  further that any subsequent
issuance or transfer of any Capital Stock or any other event which results in
any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except to the Company or another
Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of
such Indebtedness not permitted by this clause;

 

(8)           Indebtedness of a Restricted Subsidiary to
the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a
Restricted Subsidiary that is not the Co-Issuer or a Guarantor, such
Indebtedness is expressly subordinated in right of payment to the Guarantee of
the Notes of such Guarantor; provided  further that any subsequent
issuance or transfer of any Capital Stock or any other event which results in
any such Indebtedness being held by a person other than the Company or a
Restricted Subsidiary or any subsequent 

 

66

 

transfer of any such Indebtedness (except to
the Company or another Restricted Subsidiary) shall be deemed, in each case, to
be an incurrence of such Indebtedness not permitted by this clause;

 

(9)           shares of Preferred Stock of a Restricted
Subsidiary issued to the Company or another Restricted Subsidiary, provided that any subsequent
issuance or transfer of any Capital Stock or any other event which results in
any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
other subsequent transfer of any such shares of Preferred Stock (except to the Company
or another Restricted Subsidiary) shall be deemed in each case to be an
issuance of such shares of Preferred Stock not permitted by this clause;

 

(10)         Hedging Obligations (excluding Hedging
Obligations entered into for speculative purposes) for the purpose of limiting
interest rate risk with respect to any Indebtedness of the Company or any
Restricted Subsidiary permitted to be incurred pursuant to this Section 4.09,
exchange rate risk or commodity pricing risk;

 

(11)         obligations in respect of performance, bid,
appeal and surety bonds and completion guarantees provided by the Company or
any of its Restricted Subsidiaries in the ordinary course of business;

 

(12)         (a) Indebtedness or Disqualified Stock of the
Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company
or any Restricted Subsidiary equal to 100.0% of the net cash proceeds received
by the Company since immediately after the Issue Date from the issue or sale of
Equity Interests of the Company or cash contributed to the capital of the
Company (in each case, other than proceeds of Disqualified Stock or sales of
Equity Interests to the Company or any of its Subsidiaries) as determined in
accordance with clauses (3)(b) and (3)(c) of Section 4.07(a) hereof to the
extent such net cash proceeds or cash have not been applied pursuant to such
clauses to make Restricted Payments or to make other Investments, payments or
exchanges pursuant to Section 4.07(b) or to make Permitted Investments (other
than Permitted Investments specified in clauses (1), (2) and (3) of the
definition thereof)) and (b) Indebtedness or Disqualified Stock of Company
and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any
Restricted Subsidiary not otherwise permitted hereunder in an aggregate
principal amount or liquidation preference, which when aggregated with the
principal amount and liquidation preference of all other Indebtedness,
Disqualified Stock and Preferred Stock then outstanding and incurred pursuant
to this Section 4.09(b)(12), does not at any one time outstanding exceed $20.0
million (it being understood that any Indebtedness, Disqualified Stock or
Preferred Stock incurred pursuant to this Section 4.09(b)(12) shall cease to be
deemed incurred or outstanding for purposes of this Section 4.09(b)(12) but
shall be deemed incurred for the purposes of Section 4.09(a) from and after the
first date on which the Company or such Restricted Subsidiary could have
incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section
4.09(a) without reliance on this Section 4.09(b)(12));

 

(13)         the incurrence or issuance by the Company or
any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred
Stock which serves to refund or refinance any Indebtedness, Disqualified Stock
or Preferred Stock of the Company or any Restricted Subsidiary incurred as
permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and
(12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this
Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued
to so refund or refinance such Indebtedness, Disqualified Stock or Preferred
Stock including additional Indebtedness, Disqualified Stock or Preferred Stock
incurred to pay premiums (including reasonable tender premiums), defeasance
costs and 

 

67

 

fees in connection therewith (the “Refinancing Indebtedness”) prior
to its respective maturity; provided, however, that such Refinancing
Indebtedness:

 

(A)          has a Weighted
Average Life to Maturity at the time such Refinancing Indebtedness is incurred
which is not less than the remaining Weighted Average Life to Maturity of the
Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,

 

(B)           to the extent
such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee
thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee
at least to the same extent as the Indebtedness being refinanced or refunded or
(ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must
be Disqualified Stock or Preferred Stock, respectively, and

 

(C)           shall not include Indebtedness,
Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is
not a Co-Issuer or a Guarantor that refinances Indebtedness, Disqualified Stock
or Preferred Stock of the Company, the Co-Issuer or a Guarantor;

 

provided  further that subclause (A) of this clause (13)
will not apply to any refunding or refinancing of any Indebtedness outstanding
under any Senior Indebtedness;

 

(14)          Indebtedness, Disqualified
Stock or Preferred Stock of (x) the Company or a Restricted Subsidiary incurred
to finance an acquisition or (y) Persons that are acquired by the Company
or any Restricted Subsidiary or merged into the Company or a Restricted
Subsidiary in accordance with the terms of this Indenture; provided that after giving effect
to such acquisition or merger, either (a) the Company would be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09(a) hereof, or (b) the Fixed
Charge Coverage Ratio of the Company and the Restricted Subsidiaries is greater
than immediately prior to such acquisition or merger;

 

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

 

(16)         Indebtedness of the Company or any of its
Restricted Subsidiaries supported by a letter of credit issued pursuant to the
Credit Facilities, in a principal amount not in excess of the stated amount of
such letter of credit;

 

(17)         (A) any guarantee by the Company or a
Restricted Subsidiary of Indebtedness or other obligations of any Restricted
Subsidiary so long as the incurrence of such Indebtedness incurred by such
Restricted Subsidiary is permitted under the terms of this Indenture,

 

(B)         any guarantee by a Restricted Subsidiary of Indebtedness of the Company
provided that such guarantee is incurred in accordance with Section 4.15
hereof, or

 

68

 

(C)         any incurrence by Encore Medical Finance Corp. of Indebtedness as a
co-issuer of Indebtedness of the Company that was permitted to be incurred by
another provision of this covenant;

 

(18)         Indebtedness of Foreign Subsidiaries of the
Company in an amount not to exceed, at any one time outstanding and together
with any other Indebtedness incurred under this clause (18) of Section 4.09(b)
hereof, 10.0% of the Total Tangible Assets of the Foreign Subsidiaries (it
being understood that any Indebtedness incurred pursuant to this clause (18) of
Section 4.09(b) hereof shall cease to be deemed incurred or outstanding for
purposes of this clause (18) of Section 4.09(b) hereof but shall be deemed
incurred for the purposes of Section 4.09(a) from and after the first date on
which the Company or its Restricted Subsidiaries could have incurred such
Indebtedness under Section 4.09(a) hereof without reliance on this clause (18)
of Section 4.09(b) hereof);

 

(19)         Indebtedness of the Company or any of its
Restricted Subsidiaries consisting of (i) the financing of insurance premiums
or (ii) take-or-pay obligations contained in supply arrangements in each case,
incurred in the ordinary course of business; and

 

(20)         Indebtedness consisting of Indebtedness
issued by the Company or any of its Restricted Subsidiaries to current or
former officers, directors and employees thereof, their respective estates,
spouses or former spouses, in each case to finance the purchase or redemption
of Equity Interests of the Company or any direct or indirect parent company of
the Company to the extent described in clause (4) of Section 4.07(b)
hereof.

 

                (c)           For
purposes of determining compliance with this Section 4.09:

 

(1)           in the event that an item of Indebtedness,
Disqualified Stock or Preferred Stock (or any portion thereof) meets the
criteria of more than one of the categories of permitted Indebtedness,
Disqualified Stock or Preferred Stock described in clauses (1) through (20) of
Section 4.09(b) hereof or is entitled to be incurred pursuant to Section
4.09(a) hereof, the Company, in its sole discretion, shall classify or
reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or
any portion thereof) and shall only be required to include the amount and type
of such Indebtedness, Disqualified Stock or Preferred Stock in one of the above
clauses; and

 

(2)           at the time of incurrence, the Company shall
be entitled to divide and classify an item of Indebtedness in more than one of
the types of Indebtedness described in Sections 4.09(a) and 4.09(b) hereof; provided
that all Indebtedness outstanding under the Credit Facilities on the Issue Date
will be treated as incurred on the Issue Date under clause (1) of Section
4.09(b) hereof.

 

Accrual of interest, the accretion of
accreted value and the payment of interest in the form of additional Indebtedness,
Disqualified Stock or Preferred Stock shall not be deemed to be an incurrence
of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section
4.09.

 

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 debt, or first committed,
in the case of revolving credit debt; 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 

 

69

 

principal amount of such refinancing Indebtedness
does not exceed the principal amount of such Indebtedness being refinanced.

 

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 respective Indebtedness is denominated that is in
effect on the date of such refinancing.

 

Section 4.10              Asset Sales.

 

(a)           The Company shall not, and shall not permit
any of its Restricted Subsidiaries toconsummate an Asset Sale, unless:

 

(1)           the Company or such Restricted Subsidiary, as
the case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value (as determined in good faith by the Company) of
the assets sold or otherwise disposed of; and

 

(2)           except in the case of a Permitted Asset Swap,
at least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary, as the case may be, is in the form of cash or Cash
Equivalents; provided
that the following shall be deemed to be cash for purposes of this Section and
for no other purpose:

 

(A)          any liabilities
(as shown on the Company’s or such Restricted Subsidiary’s most recent balance
sheet or in the footnotes thereto) of the Company or such Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Notes or to
liabilities to the extent owed to the Company or any Affiliate of the Company)
that are assumed by the transferee of any such assets and for which the Company
and all of its Restricted Subsidiaries have been validly released by all
creditors in writing,

 

(B)           any securities
received by the Company or such Restricted Subsidiary from such transferee that
are converted by the Company or such Restricted Subsidiary into cash (to the
extent of the cash received) within 180 days following the closing of such
Asset Sale, and

 

(C)           any Designated
Non-cash Consideration received by the Company or such Restricted Subsidiary in
such Asset Sale having an aggregate fair market value, taken together with all
other Designated Non-cash Consideration received pursuant to this clause (C)
that is at that time outstanding, not to exceed 2.5% of Total Assets at the
time of the receipt of such Designated Non-cash Consideration, with the fair
market value of each item of Designated Non-cash Consideration being measured
at the time received and without giving effect to subsequent changes in value.

 

(b)           Within 450 days after the receipt of any Net
Proceeds of any Asset Sale, the Company or such Restricted Subsidiary, at its
option, may apply the Net Proceeds from such Asset Sale,

 

(1)           to permanently reduce:

 

(A)          Obligations
under Senior Indebtedness of the Company or any Guarantor, and to
correspondingly reduce commitments with respect thereto;

 

70

 

(B)           Obligations
under Senior Subordinated Indebtedness of the Company or any Guarantor (and to
correspondingly reduce commitments with respect thereto); provided that,
to the extent the Company reduces Obligations under Senior Subordinated Indebtedness
other than the Notes, the Company shall equally and ratably reduce Obligations
under the Notes; provided  further that all reductions of Obligations
under the Notes shall be made as provided as provided under Section 3.07 hereof
through open-market purchases (to the extent such purchases are at or above
100% of the principal amount thereof plus accrued and unpaid interest) or by
making an offer (in accordance with the procedures set forth under Section
4.10(c) hereof) to all Holders to purchase their Notes at 100% of the principal
amount thereof, plus the amount of accrued but unpaid interest, if any, on the
amount of Notes that would otherwise be prepaid, or

 

(C)           Indebtedness of
a Restricted Subsidiary that is not a Guarantor, other than Indebtedness owed
to the Company or any Affiliate of the Company,

 

(2)           to make (A) an Investment in any one or
more businesses; provided
that such Investment in any business is in the form of the acquisition of
Capital Stock and results in the Company or another of its Restricted
Subsidiaries, as the case may be, owning an amount of the Capital Stock of such
business such that it constitutes a Restricted Subsidiary, (B) capital
expenditures or (C) acquisitions of other assets, in each of (A), (B) and (C),
used or useful in a Similar Business, or

 

(3)           to make an investment in (A) any one or
more businesses; provided
that such Investment in any business is in the form of the acquisition of
Capital Stock and results in the Company or another of its Restricted
Subsidiaries, as the case may be, owning an amount of the Capital Stock of such
business such that it constitutes a Restricted Subsidiary, (B) properties
or (C) acquisitions of other assets that, in each of (A), (B) and (C),
replace the businesses, properties and/or assets that are the subject of such
Asset Sale;

 

provided that, in the case of clauses (2) and (3)
above, a binding commitment shall be treated as a permitted application of the
Net Proceeds from the date of such commitment so long as the Company, or such
other Restricted Subsidiary enters into such commitment with the good faith
expectation that such Net Proceeds shall be applied to satisfy such commitment
within 180 days of such commitment (an “Acceptable Commitment”) and, in the event any Acceptable
Commitment is later cancelled or terminated for any reason before the Net Proceeds
are applied in connection therewith, the Company or such Restricted Subsidiary
enters into another Acceptable Commitment (a “Second Commitment”) within
180 days of such cancellation or termination; provided  further
that if any Second Commitment is later cancelled or terminated for any reason
before such Net Proceeds are applied, then such Net Proceeds shall constitute
Excess Proceeds.

 

(c)           Any Net
Proceeds from the Asset Sale that are not invested or applied as provided and
within the time period set forth in Section 4.10(b) shall be deemed to
constitute “Excess Proceeds.”
 When the aggregate amount of Excess
Proceeds exceeds $20.0 million, the Issuers shall make an offer to all
Holders of the Notes and, if required by the terms of any Indebtedness that is pari passu with the Notes  or any Guarantee (“Pari Passu Indebtedness”), to the holders of such Pari Passu
Indebtedness (an “Asset Sale Offer”),
to purchase the maximum aggregate principal amount of the Notes and such Pari
Passu Indebtedness that is an integral multiple of $1,000 (but in minimum amounts
of $2,000) that may be purchased out of the Excess Proceeds at an offer price
in cash in an amount equal to 100% of the principal amount thereof, plus accrued
and unpaid interest and Additional Interest, if any, to the date fixed for the
closing of such offer, in accordance with the procedures set forth in this
Indenture.  The Issuers shall 

 

71

 

commence an Asset Sale Offer with respect to Excess
Proceeds within ten Business Days after the date that Excess Proceeds exceed
$15.0 million by mailing the notice required pursuant to the terms of this
Indenture, with a copy to the Trustee.

 

To the extent that the aggregate amount of Notes and such Pari Passu Indebtedness
tendered pursuant to an Asset Sale 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 amount of Notes or the Pari Passu
Indebtedness surrendered by such holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and such Pari Passu Indebtedness
to be purchased on a pro rata basis
based on the accreted value or principal amount of the Notes or such Pari Passu
Indebtedness tendered.  Additionally, the
Issuers may, at their option, make an Asset Sale Offer using proceeds from any
Asset Sale at any time after consummation of such Asset Sale.  Upon consummation of any Asset Sale Offer,
any Net Proceeds not used to purchase Notes in such Asset Sale Offer shall not
be deemed Excess Proceeds and the Company may use any Net Proceeds not required
to be used for general corporate purposes, subject to other covenants contained
in this Indenture.

 

(d)           Pending the
final application of any Net Proceeds pursuant to this Section 4.10, the holder
of such Net Proceeds may apply such Net Proceeds temporarily to reduce
Indebtedness outstanding under a revolving credit facility or otherwise invest
such Net Proceeds in any manner not prohibited by this Indenture.

 

(e)           The Issuers shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws or regulations are
applicable in connection with the repurchase of the Notes pursuant to an Asset
Sale Offer.  To the extent that the
provisions of any securities laws or regulations conflict with the provisions
of this Indenture, the Issuers shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached their obligations
described in this Indenture by virtue thereof.

 

Section 4.11              Transactions with Affiliates.

 

(a)           The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, make any
payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of the Company
(each of the foregoing, an “Affiliate
Transaction”) involving aggregate payments or consideration in excess
of $5.0 million, unless:

 

(1)           such Affiliate Transaction is on terms that
are not materially less favorable to the Company or its 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 on an arm’s-length
basis; and

 

(2)           the Company delivers to the Trustee, with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate payments or consideration in excess of $10.0 million,
a resolution adopted by the majority of the board of directors of the Company
approving such Affiliate Transaction and set forth in an Officer’s Certificate
certifying that such Affiliate Transaction complies with clause (1) of this
Section 4.11(a).

 

72

 

(b)           The provisions of Section 4.11(a) hereof shall not
apply to the following:

 

(1)           transactions between or among the Company or
any of its Restricted Subsidiaries;

 

(2)           Restricted Payments permitted by Section 4.07
hereof and the definition of “Permitted Investments”;

 

(3)           the accrual or payment of management,
consulting, monitoring and advisory fees and related expenses to the Investors
pursuant to the Sponsor Management Agreement in an aggregate amount in any
fiscal year not to exceed $3.0 million (plus any unpaid management, consulting,
monitoring and advisory fees and related expenses within such amount accrued in
any prior year) and the termination fees pursuant to the Sponsor Management
Agreement not to exceed the amount set forth in the Sponsor Management
Agreement as in effect on the Issue Date or any amendment thereto (so long as
any such amendment is not disadvantageous to the Holders when taken as a whole
as compared to the Sponsor Management Agreement in effect on the Issue Date);

 

(4)           the payment of reasonable and customary fees
paid to, and indemnities provided on behalf of, officers, directors, employees
or consultants of Company, any of its direct or indirect parent companies or
any of its Restricted Subsidiaries;

 

(5)           transactions in which the Company or any of
its Restricted Subsidiaries, as the case may be, delivers to the Trustee a
letter from an Independent Financial Advisor stating that such transaction is
fair to the Company or such Restricted Subsidiary from a financial point of
view or stating that the terms are not materially less favorable to the Company
or its 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 on an arm’s-length basis;

 

(6)           any agreement as in effect as of the Issue
Date, or any amendment thereto (so long as any such amendment is not
disadvantageous to the Holders when taken as a whole as compared to the
applicable agreement as in effect on the Issue Date);

 

(7)           the existence of, or the performance by the Company
or any of its Restricted Subsidiaries of its obligations under the terms of,
any stockholders agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party as of the Issue Date
and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by
the Company or any of its Restricted Subsidiaries of obligations under any
future amendment to any such existing agreement or under any similar agreement
entered into after the Issue Date shall only be permitted by this clause (7) to
the extent that the terms of any such amendment or new agreement are not
otherwise disadvantageous to the Holders when taken as a whole;

 

(8)           the Transaction and the payment of all fees
and expenses related to the Transaction, in each case as disclosed in the
Offering Memorandum;

 

(9)           transactions with customers, clients,
suppliers, or purchasers or sellers of goods or services, in each case in the
ordinary course of business and otherwise in compliance with the terms of this
Indenture which are fair to the Company and its Restricted Subsidiaries, in the
reasonable determination of the board of directors of the Company or the senior
management 

 

73

 

thereof, or are on terms at least as
favorable as might reasonably have been obtained at such time from an unaffiliated
party;

 

(10)         the issuance of Equity Interests (other than
Disqualified Stock) of the Company to any Permitted Holder or to any director,
officer, employee or consultant;

 

(11)         sales of accounts receivable, or participations
therein, in connection with any Receivables Facility;

 

(12)         payments by the Company or any of its
Restricted Subsidiaries to any of the Investors made for any financial advisory,
financing, underwriting or placement services or in respect of other investment
banking activities, including, without limitation, in connection with acquisitions
or divestitures which payments are approved by a majority of the board of
directors of the Company in good faith;

 

(13)         payments or loans (or cancellation of loans)
to employees or consultants of the Company, any of its direct or indirect
parent companies or any of its Restricted Subsidiaries and employment
agreements, stock option plans and other similar arrangements with such
employees or consultants which, in each case, are approved by the Company in
good faith; and

 

                (14)         investments by the Investors in securities of the Company or any of its
Restricted Subsidiaries so long as (i) the investment is being offered
generally to other investors on the same or more favorable terms and (ii) the
investment constitutes less than 5% of the proposed or outstanding issue amount
of such class of securities.

 

Section 4.12              Liens.

 

The Company shall not, and shall not permit the Co-Issuer or any
Guarantor to, directly or indirectly, create, incur, assume or otherwise cause
or suffer to exist any Lien (except Permitted Liens) that secures obligations
under any Indebtedness ranking pari passu with,
or subordinated to, the Notes or any related Guarantee, on any asset or
property of the Company, the Co-Issuer or any Guarantor, or any income or
profits therefrom, or assign or convey any right to receive income therefrom,
unless:

 

(1)           in the case of Liens securing Subordinated
Indebtedness, the Notes and related Guarantees are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Liens; or

 

(2)            in all other cases, the
Notes or the Guarantees are equally and ratably secured, except that the
foregoing shall not apply to Liens securing the Notes and the related Guarantees.

 

Section 4.13              Corporate Existence.

 

Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any such
Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company and its Restricted Subsidiaries; provided that
the Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Restricted
Subsidiaries (other than the Co-Issuer), if the Company in good faith shall
determine that the preservation thereof is no 

 

74

 

longer desirable in the conduct of the business of the
Company and its Restricted Subsidiaries, taken as a whole.

 

Section 4.14              Offer to Repurchase Upon Change of Control.

 

(a)           If a Change of
Control occurs, unless the Issuers have previously or concurrently mailed a
redemption notice with respect to all the outstanding Notes as described under Section
3.07 hereof, the Issuers shall make an offer to purchase all of the Notes
pursuant to the offer described below (the “Change of Control Offer”) at a price in cash (the “Change of Control Payment”) equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Additional Interest, if any, to the date of purchase, subject to
the right of Holders of the Notes of record on the relevant Record Date to
receive interest due on the relevant Interest Payment Date.  Within 60 days following any Change of Control,
the Issuers shall send notice of such Change of Control Offer by first-class
mail, with a copy to the Trustee, to each Holder of Notes to the address of
such Holder appearing in the security register or otherwise in accordance with
the procedures of DTC with a copy to the Trustee, with the following information:

 

(1)           that a Change of Control Offer is being made
pursuant to this Section 4.14 and that all Notes properly tendered pursuant to
such Change of Control Offer will be accepted for payment by the Issuers;

 

(2)           the purchase price and the purchase date,
which will 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)           that any Note not properly tendered will
remain outstanding and continue to accrue interest;

 

(4)           that unless the Issuers default in the
payment of the Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer will cease to accrue interest on the
Change of Control Payment Date;

 

(5)           that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be required to surrender
such Notes, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of such Notes completed, to the paying agent specified in the notice at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;

 

(6)           that Holders shall be entitled to withdraw
their tendered Notes and their election to require the Issuers to purchase such
Notes; provided that the
paying agent receives, not later than the close of business on the 30th day
following the date of the Change of Control notice, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder of the
Notes, the principal amount of Notes tendered for purchase, and a statement
that such Holder is withdrawing its tendered Notes and its election to have
such Notes purchased;

 

(7)           that if the Issuers are repurchasing less
than all of the Notes, the Holders of the remaining Notes will be issued new
Notes and such new Notes will be equal in principal amount to the unpurchased
portion of the Notes surrendered.  The unpurchased
portion of the Notes must be equal to $2,000 or an integral multiple of $1,000
in excess thereof; and

 

75

 

(8)           the other instructions, as determined by the
Issuers, consistent with this Section 4.14, that a Holder must follow.

 

The notice, if mailed in a manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice.  If (a) the notice is mailed
in a manner herein provided and (b) any Holder fails to receive such notice or
a Holder receives such notice but it is defective, such Holder’s failure to
receive such notice or such defect shall not affect the validity of the proceedings
for the purchase of the Notes as to all other Holders that properly received
such notice without defect.  The Issuers shall
comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws or
regulations are applicable in connection with the repurchase of Notes pursuant
to a Change of Control Offer.  To the extent
that the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.14, the Issuers shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached their
obligations under this Section 4.14 by virtue thereof.

 

(b)           On the Change of Control Payment Date, the Issuers shall,
to the extent permitted by law,

 

(1)           accept for payment all Notes issued by them or
portions thereof properly tendered pursuant to the Change of Control Offer,

 

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

 

(3)           deliver, or cause to be delivered, to the
Trustee for cancellation the Notes so accepted together with an Officer’s
Certificate to the Trustee stating that such Notes or portions thereof have
been tendered to, and purchased by, the Issuers.

 

(c)           The Issuers shall
not be required to make a Change of Control Offer following a Change of Control
if a third party makes the Change of Control Offer in the manner, at the times
and otherwise in compliance with the requirements set forth in this Section
4.14 applicable to a Change of Control Offer made by the Issuers and purchases
all Notes validly tendered and not withdrawn under such Change of Control
Offer.  Notwithstanding anything to the
contrary herein, a Change of Control Offer may be made in advance of a Change
of Control, conditional upon such Change of Control, if a definitive agreement
is in place for the Change of Control at the time of making of the Change of
Control Offer.

 

(d)           Other than as
specifically provided in this Section 4.14, any purchase pursuant to this
Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05
and 3.06 hereof.

 

Section 4.15              Limitation on Guarantees of Indebtedness by
Restricted Subsidiaries.

 

The Company shall not permit any of its Wholly-Owned Subsidiaries that
are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such
non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities),
other than a Guarantor, the Co-Issuer or a Foreign Subsidiary guaranteeing
Indebtedness of another Foreign Subsidiary, to guarantee the payment of any
Indebtedness of the Company, the Co-Issuer or any other Guarantor unless such
Restricted Subsidiary within 30 days executes and delivers a supplemental
indenture to this Indenture, the form of which is attached as Exhibit D
hereto, providing for a Guarantee by such Restricted Subsidiary, except that
with respect to a guarantee of Indebtedness of the Company, the Co-Issuer or
any Guarantor:

 

76

 

(a)           if the Notes or
such Guarantor’s Guarantee are subordinated in right of payment to such Indebtedness,
the Guarantee under the supplemental indenture shall be subordinated to such
Restricted Subsidiary’s guarantee with respect to such Indebtedness
substantially to the same extent as the Notes are subordinated to such Indebtedness;
and

 

(b)           if such
Indebtedness is by its express terms subordinated in right of payment to the
Notes or such Guarantor’s Guarantee, any such guarantee by such Restricted
Subsidiary with respect to such Indebtedness shall be subordinated in right of
payment to such Guarantee substantially to the same extent as such Indebtedness
is subordinated to the Notes; and

 

(c)           such Restricted
Subsidiary waives and shall not in any manner whatsoever claim or take the benefit
or advantage of, any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Restricted Subsidiary as a result
of any payment by such Restricted Subsidiary under its Guarantee;

 

provided that this Section 4.15
shall not be applicable to any guarantee of any Restricted Subsidiary that
existed at the time such Person became a Restricted Subsidiary and was not
incurred in connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary.

 

Section 4.16              Limitation on
Layering.

 

Notwithstanding anything to the contrary, the Company shall not, and
shall not permit the Co-Issuer or any Guarantor to, directly or indirectly, incur any
Indebtedness (including Acquired Indebtedness) that is subordinate in right of
payment to any Senior Indebtedness of the Company, the Co-Issuer or such Guarantor,
as the case may be, unless such Indebtedness is either:

 

(a)           equal in right of payment with the Notes or
such Guarantor’s Guarantee of the Notes, as the case may be; or

 

(b)           expressly subordinated in right of payment
to the Notes or such Guarantor’s Guarantee of the Notes, as the case may be.

 

For the purposes of this Indenture, Indebtedness that is unsecured is
not deemed to be subordinated or junior to Secured Indebtedness merely because
it is unsecured, and Senior Indebtedness is not deemed to be subordinated or
junior to any other Senior Indebtedness merely because it has a junior priority
with respect to the same collateral.

 

Section 4.17              Limitation on
Business Activities of the Co-Issuer.

 

The Co-Issuer may not hold any assets, become liable for any
obligations or engage in any business activities; provided that it may be a
co-obligor with respect to the Notes or any other Indebtedness issued by the
Company, and may engage in any activities directly related thereto or necessary
in connection therewith.  The Co-Issuer
shall be a Wholly-Owned Subsidiary of the Company at all times.

 

77

 

ARTICLE 5

 

SUCCESSORS

 

Section 5.01              Merger,
Consolidation or Sale of All or Substantially All Assets.

 

(a)           Company. The Company shall
not, directly or indirectly, consolidate or merge with or into or wind up into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
Company’s properties or assets, in one or more related transactions, to any Person
unless:

 

(1)           either: 
(x) the Company is the surviving corporation; or (y) the Person formed
by or surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other
disposition will have been made is a corporation, partnership (including a
limited partnership), trust or limited liability company organized or existing
under the laws of the jurisdiction of organization of the Company or the laws
of the United States, any state thereof, the District of Columbia, or any
territory thereof (such Person, as the case may be, being herein called
the “Successor Company”);

 

(2)           the Successor Company, if other than the Company,
expressly assumes all the obligations of the Company under the Notes pursuant
to supplemental indentures or other documents or instruments in form reasonably
satisfactory to the Trustee, and the Registration Rights Agreement if the
exchange offer contemplated therein has not been consummated or if the Issuers
continue to have an obligation to file or maintain the effectiveness of a shelf
registration statement as provided under such agreement;

 

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

 

(4)           immediately after giving pro forma
effect to such transaction and any related financing transactions, as if such
transactions had occurred at the beginning of the applicable four-quarter
period,

 

(A)          the Successor Company would
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof,
or

 

(B)           the Fixed Charge Coverage
Ratio for the Successor Company, the Company and its Restricted Subsidiaries
would be greater than such Ratio for the Company and its Restricted
Subsidiaries immediately prior to such transaction;

 

(5)           each Guarantor, unless it is the other party to the transactions
described above, in which case Section 5.01(c)(1)(B) hereof shall
apply, shall have by supplemental indenture confirmed that its Guarantee shall
apply to such Person’s obligations under this Indenture, the Notes and the
Registration Rights Agreement if the exchange offer contemplated therein has
not been consummated or if the Issuers continue to have an obligation to file
or maintain the effectiveness of a shelf registration statement as provided
under such agreement;

 

(6)           the Co-Issuer, unless it is the party to the transactions described
above, in which case clause (3) of Section 5.01(e) hereof shall
apply, shall have by supplemental indenture confirm that it continues to be a
co-obligor of the Notes; and

 

78

 

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

 

(b)           The Successor Company shall
succeed to, and be substituted for the Company, as the case may be, under this
Indenture, the Guarantees and the Notes, as applicable. Notwithstanding clauses
(3) and (4) of Section 5.01(a) hereof,

 

(1)           any Restricted Subsidiary may consolidate with or merge into or
transfer all or part of its properties and assets to the Company, and

 

(2)           the Company may merge with an Affiliate of the Company, as the
case may be, solely for the purpose of reincorporating the Company in the
United States, any state thereof, the District of Columbia or any territory
thereof so long as the amount of Indebtedness of the Company and its Restricted
Subsidiaries is not increased thereby.

 

(c)           Guarantors. Subject to
certain limitations described in this Indenture governing release of a
Guarantee upon the sale, disposition or transfer of a guarantor, no Guarantor shall,
and the Company shall not permit any Guarantor to, consolidate or merge with or
into or wind up into (whether or not the Company or Guarantor is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets, in one or more related
transactions, to any Person unless:

 

(1)           (A) such Guarantor is the surviving corporation or the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) or to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been made is a corporation, partnership, trust or
limited liability company organized or existing under the laws of the
jurisdiction of organization of such Guarantor, as the case may be, or the
laws of the United States, any state thereof, the District of Columbia, or any
territory thereof (such Guarantor or such Person, as the case may be,
being herein called the “Successor
Person”);

 

(B) the
Successor Person, if other than such Guarantor, expressly assumes all the
obligations of such Guarantor under this Indenture and such Guarantor’s related
Guarantee pursuant to supplemental indentures or other documents or instruments
in form reasonably satisfactory to the Trustee;

 

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

 

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

 

(2)           the transaction is made in compliance with Section 4.10 hereof.

 

(d)           Subject to certain limitations described in this Indenture, the
Successor Person shall succeed to, and be substituted for, such Guarantor under
this Indenture and such Guarantor’s Guarantee. Notwithstanding the foregoing,
any Guarantor may merge into or transfer all or part of its properties
and assets to another Guarantor or the Company or merge with an Affiliate of
the Company solely for the purpose of reincorporating the Guarantor in the
United States, any state thereof, the District of Columbia or any territory
thereof without regard to the requirements set forth in Section 5.01(c) hereof.

 

79

 

(e)           Encore Medical Finance Corp. Encore Medical Finance Corp. shall not,
directly or indirectly, consolidate or merge with or into or wind up into
(whether or not Encore Medical Finance Corp. is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of Encore Medical Finance Corp.’s properties or assets, in
one or more related transactions, to any Person unless:

 

(1)           (A) concurrently therewith, a corporate Wholly-Owned Restricted
Subsidiary of the Company organized and validly existing under the laws of the
United States, any state thereof, the District of Columbia or any territory
thereof (which may be the continuing Person as a result of such
transaction) expressly assumes all the obligations of Encore Medical Finance
Corp. under the Notes, pursuant to supplemental indentures or other documents
or instruments in form reasonably satisfactory to the Trustee, and the
Registration Rights Agreement if the exchange offer contemplated therein has
not been consummated or if the Issuers continue to have an obligation to file
or maintain the effectiveness of a shelf registration statement as provided
under such agreement; or

 

(B) after
giving effect thereto, at least one obligor on the notes shall be a corporation
organized and validly existing under the laws of the United States, any state
thereof, the District of Columbia or any territory thereof;

 

(2)           immediately after such transaction, no Default or Event of Default
shall have occurred and be continuing; and

 

(3)           Encore Medical Finance Corp. shall have delivered to the Trustee an
Officer’s Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture, if any,
comply with this Indenture.

 

Section 5.02              Successor
Corporation Substituted.

 

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

 

80

 

ARTICLE 6

 

DEFAULTS AND REMEDIES

 

Section 6.01              Events of Default.

 

(a)           An “Event of Default” wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be 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):

 

(1)           default in payment when due and payable (whether at maturity, upon
redemption, acceleration or otherwise), of principal of, or premium, if any, on
the Notes (whether or not prohibited by the subordination provisions of this Indenture);

 

(2)           default for 30 days or more in the payment when due of interest or
Additional Interest on or with respect to the Notes (whether or not prohibited
by the subordination provisions of this Indenture);

 

(3)           failure by the Company, the Co-Issuer or any Guarantor for 60 days
after receipt of written notice given by the Trustee or the Holders of not less
than 25% in principal amount of the Notes to comply with any of its
obligations, covenants or agreements (other than a default referred to in Sections
6.01(a) (1) and (2) above;

 

(4)           default under any mortgage, indenture or instrument under which there
is issued or by which there is 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 issuance of the
Notes, if both:

 

(a)           such default either results
from the failure to pay any principal of such Indebtedness at its stated final
maturity (after giving effect to any applicable grace periods) or relates to an
obligation other than the obligation to pay principal of any such Indebtedness
at its stated final maturity and results in the holder or holders of such Indebtedness
causing such Indebtedness to become due prior to its stated maturity; and

 

(b)           the principal amount of such
Indebtedness, together with the principal amount of any other such Indebtedness
in default for failure to pay principal at stated final maturity (after giving
effect to any applicable grace periods), or the maturity of which has been so
accelerated, aggregate $25.0 million or more at any one time outstanding;

 

(5)           failure by the Company or any Significant Subsidiary (including the
Co-Issuer) to pay final judgments aggregating in excess of $25.0 million,
which final judgments remain unpaid, undischarged and unstayed for a period of
more than 60 days after such judgment becomes final, and in the event such
judgment is covered by insurance, an enforcement proceeding has been commenced
by any creditor upon such judgment or decree which is not promptly stayed;

 

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

 

81

 

(i)            commences
proceedings to be adjudicated bankrupt or insolvent;

 

(ii)           consents
to the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under applicable Bankruptcy law;

 

(iii)          consents
to the appointment of a receiver, liquidator, assignee, trustee, sequestrator
or other similar official of it or for all or substantially all of its
property;

 

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

 

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

 

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

 

(i)            is
for relief against the Company or any Significant Subsidiary, in a proceeding
in which the Company or any Significant Subsidiary is to be adjudicated bankrupt
or insolvent;

 

(ii)           appoints
a receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Significant Subsidiary, or for all or
substantially all of the property of the Company or any Significant Subsidiary;
or

 

(iii)          orders
the liquidation of the Company or any Significant Subsidiary;

 

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

 

(8)           the Guarantee of any Significant Subsidiary shall
for any reason cease to be in full force and effect or be declared null and
void or any responsible officer of any Guarantor that is a Significant
Subsidiary, as the case may be, denies that it has any further liability
under its Guarantee or gives notice to such effect, other than by reason of the
termination of this Indenture or the release of any such Guarantee in
accordance with this Indenture.

 

(b)           In the event of any Event of
Default specified in clause (4) of Section 6.01(a) hereof, such
Event of Default and all consequences thereof (excluding any resulting payment
default, other than as a result of acceleration of the Notes) shall be
annulled, waived and rescinded, automatically and without any action by the
Trustee or the Holders, if within 20 days after such Event of Default arose:

 

(1)           the Indebtedness or Guarantee that is the basis for such Event of
Default has been discharged; or

 

(2)           Holders thereof have rescinded or waived the acceleration, notice or
action (as the case may be) giving rise to such Event of Default; or

 

(3)           the default that is the basis for such Event of Default has been cured.

 

Section 6.02              Acceleration.

 

(a)           If any Event of Default (other than an Event of Default specified in
clause (6) or (7) of Section 6.01(a) hereof) occurs and is
continuing under this Indenture, the Trustee or the Holders of

 

82

 

at least 25% in principal
amount of the then total outstanding Notes may declare the principal,
premium, if any, interest and any other monetary obligations on all the then
outstanding Notes to be due and payable immediately; provided, however,
that so long as any Indebtedness permitted to be incurred under this Indenture
as part of the Senior Credit Facilities shall be outstanding, no such
acceleration shall be effective until the earlier of:

 

(1) acceleration
of any such Indebtedness under the Senior Credit Facilities; or

 

(2) five Business Days after the giving
of written notice of such acceleration to the Company and the administrative
agent under the Senior Credit Facilities.

 

Upon the effectiveness of
such declaration, such principal and interest shall be due and payable
immediately. The Trustee shall have no obligation to accelerate the Notes if
and so long as a committee of its Responsible Officers in good faith determines
acceleration is not in the best interest of the Holders.

 

Notwithstanding the
foregoing, in the case of an Event of Default arising under clause (6) or (7) of
Section 6.01(a) hereof, all outstanding Notes shall be due and
payable immediately without further action or notice.

 

The Holders of a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal,
interest, Additional Interest, if any, or premium that has become due solely
because of the acceleration) have been cured or waived.

 

Section 6.03              Other Remedies.

 

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

 

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

 

Section 6.04              Waiver of Past
Defaults.

 

Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default and its consequences hereunder, except a continuing Default in
the payment of the principal of, premium, if any, Additional Interest, if any, or
interest on, any Note held by a non-consenting Holder (including in connection
with an Asset Sale Offer or a Change of Control Offer); provided, subject
to Section 6.02 hereof, that the Holders of a majority in aggregate principal
amount of the then outstanding Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such acceleration.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.

 

83

 

Section 6.05              Control by
Majority.

 

Holders of a majority in
principal amount of the then total 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. The
Trustee, however, may refuse to follow any direction that conflicts with
law or this Indenture or that the Trustee determines is unduly prejudicial to
the rights of any other Holder of a Note or that would involve the Trustee in
personal liability.

 

Section 6.06              Limitation on
Suits.

 

Subject to Section 6.07 hereof, no Holder of a Note 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 total outstanding
Notes have requested the Trustee to pursue the remedy;

 

(3)           Holders of the Notes 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 thereof and the offer of security or indemnity; and

 

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

 

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

 

Section 6.07              Rights of Holders
of Notes to Receive Payment.

 

Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive
payment of principal, premium, if any, and Additional Interest, if any, and
interest on the Note, on or after the respective due dates expressed in the
Note (including in connection with an Asset Sale Offer or a Change of Control
Offer), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.

 

Section 6.08              Collection Suit
by Trustee.

 

If an Event of Default
specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Issuers for the whole amount of principal of, premium, if any, and Additional
Interest, if any, and interest remaining unpaid on the Notes and interest on
overdue principal and, to the extent lawful, interest and such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.

 

84

 

Section 6.09              Restoration of
Rights and Remedies.

 

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

 

Section 6.10              Rights and Remedies
Cumulative.

 

Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Notes in Section 2.07 hereof, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.

 

Section 6.11              Delay or Omission
Not Waiver.

 

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

 

Section 6.12              Trustee May File
Proofs of Claim.

 

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

 

85

 

Section 6.13              Priorities.

 

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

 

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

 

(ii)           to
holders of Senior Indebtedness of the Issuers and, if such money or property
has been collected from a Guarantor, to holders of Senior Indebtedness of such
Guarantor, in each case to the extent required by Article 10 and/or Article 12
hereof, as applicable

 

(iii)          to Holders of Notes for amounts due and
unpaid on the Notes for principal, premium, if any, and Additional Interest, if
any, and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal, premium,
if any, and Additional Interest, if any, and interest, respectively; and

 

(iv)          to the Company or to such party as a court of
competent jurisdiction shall direct, including the Co-Issuer or a Guarantor, if
applicable.

 

The Trustee may fix a
record date and payment date for any payment to Holders of Notes pursuant to
this Section 6.13.

 

Section 6.14              Undertaking for
Costs.

 

In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant
in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.14 does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.

 

ARTICLE 7

 

TRUSTEE

 

Section 7.01              Duties of Trustee.

 

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

 

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

 

(i)            the duties of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this

 

86

 

Indenture
and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee;
and

 

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

 

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

 

(i)            this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;

 

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

 

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

 

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

 

(e)           The Trustee shall be under no obligation to exercise any of its rights
or powers under this Indenture at the request or direction of any of the
Holders of the Notes unless the Holders have offered to the Trustee reasonable
indemnity or security against any loss, liability or expense.

 

(f)            The Trustee shall not be liable for interest
on any money received by it except as the Trustee may agree in writing
with the Issuers. Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.

 

Section 7.02              Rights of Trustee.

 

(a)           The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document, but the Trustee,
in its discretion, 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, 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.

 

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

 

87

 

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

 

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

 

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

 

(f)            None of the provisions of this Indenture
shall require the Trustee to expend or risk its own funds or otherwise to incur
any liability, financial or otherwise, 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 for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it.

 

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

 

(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)            In the event the Issuers are required to pay
Additional Interest, the Issuers will provide written notice to the Trustee of
the Issuers’ obligation to pay Additional Interest no later than 15 days prior
to the next Interest Payment Date, which notice shall set forth the amount of
the Additional Interest to be paid by the Issuers. The Trustee shall not at any
time be under any duty or responsibility to any Holders to determine whether
the Additional Interest is payable and the amount thereof.

 

Section 7.03              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 any Affiliate of the Issuers
with the same rights it would have if it were not Trustee. However, in the
event that the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as trustee
or resign. Any Agent may do the same with like rights and duties. The Trustee
is also subject to Sections 7.10 and 7.11 hereof.

 

Section 7.04              Trustee’s
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 proceeds from the Notes or any money paid to the Issuers or upon the
Issuers’ direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying

 

88

 

Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or
any statement in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its certificate of authentication.

 

Section 7.05              Notice of
Defaults.

 

If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default within 90 days after it occurs. Except in the
case of a Default relating to the payment of principal, premium, if any, or
interest on any Note, the Trustee may withhold from the Holders notice of
any continuing Default if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes. The Trustee shall not be deemed to know
of any Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is such a Default is
received by the Trustee at the Corporate Trust Office of the Trustee.

 

Section 7.06              Reports by
Trustee to Holders of the Notes.

 

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

 

A copy of each report at the
time of its mailing to the Holders of Notes shall be mailed to the Issuers and
filed with the SEC and each stock exchange on which the Notes are listed in
accordance with Trust Indenture Act Section 313(d). The Issuers shall
promptly notify the Trustee when the Notes are listed on any stock exchange.

 

Section 7.07              Compensation and
Indemnity.

 

The Issuers and the
Guarantors, jointly and severally, shall pay to the Trustee from time to time
such compensation for its acceptance of this Indenture and services hereunder
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 Guarantors, jointly and severally, shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation
for its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee’s agents and counsel.

 

The Issuers and the
Guarantors, jointly and severally, shall indemnify the Trustee for, and hold
the Trustee harmless against, any and all loss, damage, claims, liability or
expense (including attorneys’ fees) 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 against
the Issuers or any of the Guarantors (including this Section 7.07) or
defending itself against any claim whether asserted by any Holder, the Issuers
or any Guarantor, or liability in connection with the acceptance, exercise or
performance of any of its powers or duties hereunder). 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 their
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.

 

89

 

The Issuers 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.

 

The obligations of the
Issuers under this Section 7.07 shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal of the
Trustee.

 

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

 

When the Trustee incurs
expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or
(7) hereof occurs, the expenses and the compensation for the services
(including the fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under any Bankruptcy Law.

 

The Trustee shall comply
with the provisions of Trust Indenture Act Section 313(b)(2) to the
extent applicable.

 

Section 7.08              Replacement of
Trustee.

 

A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from the trust
hereby created by so notifying the Issuers. The Holders of a majority in principal
amount of the then outstanding Notes may remove the Trustee by so notifying
the Trustee and the Issuers in writing. The Issuers may remove the Trustee
if:

 

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

 

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

 

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

 

(d)           the Trustee becomes incapable of acting.

 

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

 

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

 

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

 

90

 

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
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Issuers’ obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.

 

Section 7.09              Successor Trustee
by Merger, etc.

 

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

 

Section 7.10              Eligibility;
Disqualification.

 

There shall at all times be
a Trustee hereunder that is a corporation organized and doing business under
the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition.

 

This Indenture shall always
have a Trustee who satisfies the requirements of Trust Indenture Act Sections
310(a)(1), (2) and (5). The Trustee is subject to Trust Indenture Act Section 310(b).

 

Section 7.11              Preferential
Collection of Claims Against Issuers.

 

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

 

ARTICLE 8

 

LEGAL DEFEASANCE AND
COVENANT DEFEASANCE

 

Section 8.01              Option to Effect
Legal Defeasance or Covenant Defeasance.

 

The Issuers may, at their
option and at any time, elect to have either Section 8.02 or 8.03 hereof
applied to all outstanding Notes upon compliance with the conditions set forth
below in this Article 8.

 

Section 8.02              Legal Defeasance
and Discharge.

 

Upon the Issuers’ exercise
under Section 8.01 hereof of the option applicable to this Section 8.02,
the Issuers and the Guarantors shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes and Guarantees
on the date the conditions set forth below are satisfied (“Legal Defeasance”).
For this purpose, Legal Defeasance means that the Issuers shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes, which shall thereafter be deemed to be “outstanding” only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture referred
to

 

91

 

in (a) and (b) below,
and to have satisfied all their other obligations under such Notes and this
Indenture including that of the Guarantors (and the Trustee, on demand of and
at the expense of the Issuers, shall execute proper instruments acknowledging
the same), except for the following provisions which shall survive until
otherwise terminated or discharged hereunder:

 

(a)           the rights of Holders of Notes to receive
payments in respect of the principal of, premium, if any, and interest on the
Notes when such payments are due solely out of the trust created pursuant to this
Indenture referred to in Section 8.04 hereof;

 

(b)           the Issuers’ obligations with respect to Notes
concerning issuing temporary Notes, registration of such Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust;

 

(c)           the rights, powers, trusts, duties and
immunities of the Trustee, and the Issuers’ obligations in connection
therewith; and

 

(d)           this Section 8.02.

 

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

 

Section 8.03              Covenant
Defeasance.

 

Upon the Issuers’ exercise
under Section 8.01 hereof of the option applicable to this Section 8.03,
the Issuers and the Guarantors shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be released from their
obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 and 4.16 hereof and clauses (4) and
(5) of Section 5.01(a), Sections 5.01(c) and 5.01(d) hereof
with respect to the outstanding Notes on and after the date the conditions set
forth in Section 8.04 hereof are satisfied (“Covenant Defeasance”),
and the Notes shall thereafter be deemed not “outstanding” for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, 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, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected thereby. In addition, upon the Issuers’ exercise
under Section 8.01 hereof of the option applicable to this Section 8.03
hereof, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(3), 6.01(4), 6.01(5), 6.01(6) (solely with respect
to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(7) (solely
with respect to Restricted Subsidiaries that are Significant Subsidiaries) and
6.01(8) hereof shall not constitute Events of Default.

 

Section 8.04              Conditions to
Legal or Covenant Defeasance.

 

The following shall be the
conditions to the application of either Section 8.02 or 8.03 hereof to the
outstanding Notes:

 

92

 

In order to exercise either
Legal Defeasance or Covenant Defeasance with respect to the Notes:

 

(1)           the Issuers must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Notes, cash in U.S. dollars, Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest due on the Notes on the
stated maturity date or on the redemption date, as the case may be, of
such principal, premium, if any, or interest on such Notes and the Company must
specify whether such Notes are being defeased to maturity or to a particular
redemption date;

 

(2)           in the case of Legal Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that, subject to customary assumptions and exclusions,

 

(a)           the Issuers have received
from, or there has been published by, the United States Internal Revenue
Service a ruling, or

 

(b)           since the issuance of the
Notes, there has been a change in the applicable U.S. federal income tax law,

 

in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, subject to customary assumptions and exclusions, the Holders of
the Notes will not recognize income, gain or loss for U.S. federal income tax
purposes, as applicable, as a result of such Legal Defeasance and will be
subject to U.S. 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;

 

(3)           in the case of Covenant Defeasance, the Issuers shall have delivered to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that, subject to customary assumptions and exclusions, the Holders
of the Notes will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
such 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;

 

(4)           no Default (other than that resulting from borrowing funds to be
applied to make the deposit required to effect such Legal Defeasance or
Covenant Defeasance and any similar and simultaneous deposit relating to other
Indebtedness, and, in each case, the granting of Liens in connection therewith)
shall have occurred and be continuing on the date of such deposit;

 

(5)           such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under the Senior Credit
Facilities or any other material agreement or instrument (other than this
Indenture) to which, the Issuers or any Guarantor is a party or by which the
Issuers or any Guarantor is bound (other than that resulting from any borrowing
of funds to be applied to make the deposit required to effect such Legal
Defeasance or Covenant Defeasance and any similar and simultaneous deposit
relating to other Indebtedness, and the granting of Liens in connection
therewith);

 

(6)           the Issuers shall have delivered to the Trustee an Opinion of Counsel
to the effect that, as of the date of such opinion and subject to customary
assumptions and exclusions following

 

93

 

the
deposit, the trust funds will not be subject to the effect of Section 547
of Title 11 of the United States Code;

 

(7)           the Issuers shall have delivered to the Trustee an Officer’s
Certificate stating that the deposit was not made by the Issuers with the
intent of defeating, hindering, delaying or defrauding any creditors of the
Issuers or any Guarantor or others; and

 

(8)           the Issuers shall have delivered to the
Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of
Counsel may be subject to customary assumptions and exclusions) each
stating that all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance, as the case may be, have been complied
with.

 

Section 8.05              Deposited Money
and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.

 

Subject to Section 8.06
hereof, all money and Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for purposes
of this Section 8.05, the “Trustee”) pursuant to Section 8.04
hereof in respect of the outstanding Notes shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including an Issuer or a Guarantor acting as Paying Agent) as the Trustee may determine,
to the Holders of such Notes of all sums due and to become due thereon in
respect of principal, premium and Additional Interest, if any, and interest,
but such money need not be segregated from other funds except to the extent
required by law. Money and Government Securities so held in trust are not
subject to Article 10 or Article 12 hereof

 

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

 

Anything in this Article 8
to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuers
from time to time upon the request of the Issuers any money or Government Securities
held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.04(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06              Repayment to Issuers.

 

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, premium and Additional Interest, if any, or
interest on any Note and remaining unclaimed for two years after such
principal, and premium and Additional Interest, if any, or interest has become
due and payable shall be paid to the Issuers on their request or (if then held
by the Issuers) shall be discharged from such trust; and the Holder of such Note
shall thereafter 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.

 

Section 8.07              Reinstatement.

 

If the Trustee or Paying
Agent is unable to apply any United States dollars or Government Securities in
accordance with Section 8.02 or 8.03 hereof, as the case may be, by
reason of any

 

94

 

order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Issuers’ obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section 8.02
or 8.03 hereof, as the case may be; provided that, if the Issuers
make any payment of principal of, premium and Additional Interest, if any, or
interest on any Note following 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 held by the Trustee or Paying Agent.

 

ARTICLE 9

 

AMENDMENT, SUPPLEMENT AND
WAIVER

 

Section 9.01              Without Consent
of Holders of Notes.

 

Notwithstanding Section 9.02
hereof, the Issuers, any Guarantor (with respect to a Guarantee or this
Indenture) and the Trustee may amend or supplement this Indenture and any
Guarantee or Notes without the consent of any Holder:

 

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

 

(2)           to provide for uncertificated Notes of such series in addition to
or in place of certificated Notes;

 

(3)           to comply with Section 5.01 hereof;

 

(4)           to provide the assumption of the Issuers’ or any Guarantor’s
obligations to the Holders;

 

(5)           to make any change that would provide any additional rights or benefits
to the Holders or that does not adversely affect the legal rights under this
Indenture of any such Holder;

 

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

 

(7)           to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the Trust Indenture Act;

 

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

 

(9)           to provide for the issuance of exchange notes or private exchange
notes, which are identical to exchange notes except that they are not freely
transferable;

 

(10)         to provide for the issuance of Additional Notes in accordance with this
Indenture;

 

(11)         to add a Guarantor under this Indenture or to release a Guarantor in
accordance with the terms of this Indenture;

 

(12)         to conform the text of this Indenture, Guarantees or the Notes to
any provision of the “Description of Notes” section of the Offering
Memorandum to the extent that such provision

 

95

 

in
such “Description of Notes” section was intended to be a verbatim
recitation of a provision of this Indenture, Guarantee or Notes;

 

(13)         to make any amendment to the provisions of this
Indenture relating to the transfer and legending of Notes as permitted by this
Indenture, including, without limitation to facilitate the issuance and administration
of the Notes; provided, however, that (i) compliance
with this Indenture as so amended would not result in the Notes being
transferred in violation of the Securities Act or any applicable securities law
and (ii) such amendment does not materially and adversely affect the
rights of Holders to transfer the Notes; or

 

(14)         to make any other modifications to the Notes
or the Indenture of a formal, minor or technical nature, or necessary to
correct a manifest error, so long as such modification does not adversely
affect the rights of any Holders in any material respect.

 

Upon the request of the
Issuers accompanied by a resolution of their respective boards of directors
authorizing the execution of any such amended or supplemental indenture, and
upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Issuers and the Guarantors in the execution
of any amended or supplemental indenture authorized or permitted by the terms
of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental indenture that affects its
own rights, duties or immunities under this Indenture or otherwise. Notwithstanding
the foregoing, no Opinion of Counsel shall be required in connection with the
addition of a Guarantor under this Indenture upon execution and delivery by
such Guarantor and the Trustee of a supplemental indenture to this Indenture,
the form of which is attached as Exhibit D hereto, and
delivery of an Officer’s Certificate.

 

Section 9.02              With Consent of
Holders of Notes.

 

Except as provided below in
this Section 9.02, the Issuers and the Trustee may amend or
supplement this Indenture, the Notes and the Guarantees with the consent of the
Holders of at least a majority in principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium and Additional
Interest, if any, or interest on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any provision
of this Indenture, the Guarantees or the Notes may be waived with the
consent of the Holders of a majority in principal amount of the then
outstanding Notes (including Additional Notes, if any) voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes). Section 2.08 hereof and Section 2.09 hereof
shall determine which Notes are considered to be “outstanding” for the purposes
of this Section 9.02.

 

Upon the request of the
Issuers accompanied by a resolution of their respective boards of directors
authorizing the execution of any such amended or supplemental indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee
of the documents described in Section 7.02 hereof, the Trustee shall join
with the Issuers in the execution of such amended or supplemental indenture unless
such amended or supplemental indenture directly affects the Trustee’s own rights,
duties or immunities under this Indenture or otherwise, in which case the Trustee
may in its discretion, but shall not be obligated to, enter into such
amended or supplemental indenture.

 

96

 

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

 

After an amendment,
supplement or waiver under this Section 9.02 becomes effective, the Issuers
shall mail to the Holders of Notes affected thereby a notice briefly describing
the amendment, supplement or waiver. Any failure of the Issuers to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental indenture or waiver.

 

Without the consent of each
affected Holder of Notes, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):

 

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

 

(2)           reduce the principal of or change the fixed final maturity of any such
Note or alter or waive the provisions with respect to the redemption of such
Notes (other than provisions relating to Section 3.09, Section 4.10
and Section 4.14 hereof to the extent that any such amendment or waiver
does not have the effect of reducing the principal of or changing the fixed
final maturity of any such Note or altering or waiving the provisions with
respect to the redemption of such Notes);

 

(3)           reduce the rate of or change the time for payment of interest on any
Note;

 

(4)           waive a Default in the payment of principal of or premium, if any, or
interest on the Notes, except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the Notes and a
waiver of the payment default that resulted from such acceleration, or in
respect of a covenant or provision contained in this Indenture or any Guarantee
which cannot be amended or modified without the consent of all Holders;

 

(5)           make any Note payable in money other than U.S. dollars;

 

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

 

(7)           make any change in these amendment and waiver provisions;

 

(8)           impair the right of any Holder to receive payment of principal of, or
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 or the Guarantees;

 

(9)           make any change in the subordination provisions hereof that would
adversely affect the Holders; or

 

(10)         except as expressly permitted by this
Indenture, modify the Guarantees of any Significant Subsidiary in any manner
adverse to the Holders of the Notes or release the Co-Issuer from its
obligations under this Indenture.

 

97

 

Section 9.03              Compliance with
Trust Indenture Act.

 

Every amendment or
supplement to this Indenture or the Notes shall be set forth in an amended or
supplemental indenture that complies with the Trust Indenture Act as then in
effect.

 

Section 9.04              Revocation and
Effect of Consents.

 

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

 

The Issuers may, but shall
not be obligated to, fix a record date for the purpose of determining the
Holders entitled to consent to any amendment, supplement, or waiver. If a
record date is fixed, then, notwithstanding the preceding paragraph, those
Persons who were Holders at such record date (or their duly designated
proxies), and only such Persons, shall be entitled to consent to such
amendment, supplement, or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. No such
consent shall be valid or effective for more than 120 days after such record
date unless the consent of the requisite number of Holders has been obtained.

 

Section 9.05              Notation
on or Exchange of Notes.

 

The Trustee may place
an appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Issuers in exchange for all Notes may issue
and the Trustee shall, upon receipt of an Authentication Order, authenticate
new Notes that reflect the amendment, supplement or waiver.

 

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

 

Section 9.06              Trustee
to Sign Amendments, etc.

 

The Trustee shall sign any
amendment, supplement or waiver authorized pursuant to this Article 9 if
the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Issuers may not sign an
amendment, supplement or waiver until the board of directors approves it. In
executing any amendment, supplement or waiver, the Trustee shall be entitled to
receive and (subject to Section 7.01 hereof) shall be fully protected in
relying upon, in addition to the documents required by Section 14.04
hereof, an Officer’s Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture and that such amendment, supplement or waiver is the legal,
valid and binding obligation of the Issuers and any Guarantors party thereto,
enforceable against them in accordance with its terms, subject to customary
exceptions, and complies with the provisions hereof (including Section 9.03).
Notwithstanding the foregoing, no Opinion of Counsel will be required for the
Trustee to execute any amendment or supplement adding a new Guarantor under
this Indenture.

 

98

 

Section 9.07                                Payment
for Consent.

 

Neither the Issuers nor any
Affiliate of the Issuers shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to all Holders and is paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.

 

ARTICLE 10

 

SUBORDINATION

 

Section 10.01                          Agreement
To Subordinate.

 

The Issuers agree, and each Holder
by accepting a Note agrees, that the payment of all Obligations owing in
respect of the Notes is subordinated in right of payment, to the extent and in
the manner provided in this Article 10, to the prior payment in full of
all existing and future Senior Indebtedness of the Issuers and that the
subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Notes shall in all respects rank pari passu
in right of payment with all existing and future Senior Subordinated
Indebtedness of the Issuers, and will be senior in right of payment to all
existing and future Subordinated Indebtedness of the Issuers; and only
Indebtedness of the Issuers that is Senior Indebtedness shall rank senior to
the Notes in accordance with the provisions set forth herein. All provisions of
this Article 10 shall be subject to Section 10.12.

 

Section 10.02                          Liquidation,
Dissolution, Bankruptcy.

 

Upon any payment or
distribution of the assets of either Issuer to creditors upon a total or
partial liquidation or a total or partial dissolution of such Issuer or in a
reorganization of or similar proceeding relating to such Issuer or its
property:

 

(i)                                     the holders of Senior
Indebtedness of such Issuer shall be entitled to receive payment in full in
cash of such Senior Indebtedness before Holders shall be entitled to receive
any payment; and

 

(ii)                                  until the Senior
Indebtedness of such Issuer is paid in full in cash, any payment or
distribution to which Holders would be entitled but for the subordination
provisions of this Indenture shall be made to holders of such Senior
Indebtedness as their interests may appear, except that Holders may receive
Permitted Junior Securities.

 

Section 10.03                          Default
on Senior Indebtedness of the Issuers.

 

Neither the Issuers nor any
Guarantor shall pay principal of, premium, if any, or interest on the Notes (or
pay any other Obligations relating to the Notes, including Additional Interest,
fees, costs, expenses, indemnities and rescission or damage claims) or make any
deposit pursuant to Article 8 or Article 13 hereof and may not
purchase, redeem or otherwise retire any Notes (collectively, “pay the Notes”)
(except in the form of Permitted Junior Securities) if either of the
following occurs (a “Payment Default”):

 

(i)                                     any Obligation on any
Designated Senior Indebtedness of such Issuer is not paid in full in cash when
due, after giving effect to any applicable grace period; or

 

99

 

(ii)                                  any other default on Designated
Senior Indebtedness of such Issuer occurs and the maturity of such Designated
Senior Indebtedness is accelerated in accordance with its terms;

 

unless, in either case, the
Payment Default has been cured or waived and any such acceleration has been
rescinded or such Designated Senior Indebtedness has been paid in full in cash;
provided, however, the Issuers shall be entitled to pay the Notes
without regard to the foregoing if the Issuers and the Trustee receive written
notice approving such payment from the Representatives of all Designated Senior
Indebtedness with respect to which the Payment Default has occurred and is
continuing.

 

During the continuance of
any default other than a Payment Default (a “Non-Payment Default”) with
respect to any Designated Senior Indebtedness pursuant to which the maturity
thereof may be accelerated without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Issuers shall not pay the Notes (except in the form of
Permitted Junior Securities) for a period (a “Payment Blockage Period”)
commencing upon the receipt by the Trustee (with a copy to the Issuers) of written
notice (a “Blockage Notice”) of such Non-Payment Default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter. So long
as there shall remain outstanding any Senior Indebtedness under the Senior
Credit Facilities, a Blockage Notice may be given only by the
administrative agent thereunder unless otherwise agreed to in writing by the
requisite lenders named therein. The Payment Blockage Period shall end earlier
if such Payment Blockage Period is terminated (i) by written notice to the
Trustee and the Issuers from the Person or Persons who gave such Blockage
Notice; (ii) because the default giving rise to such Blockage Notice is
cured, waived or otherwise no longer continuing; or (iii) because such
Designated Senior Indebtedness has been discharged or repaid in full in cash.

 

Notwithstanding the
provisions described in the immediately preceding two sentences (but subject to
the provisions contained in the first sentence of this Section 10.03 and Section 10.02
hereof), unless the holders of such Designated Senior Indebtedness or the
Representative of such Designated Senior Indebtedness shall have accelerated
the maturity of such Designated Senior Indebtedness or a Payment Default has
occurred and is continuing, the Issuers and related Guarantors shall be
entitled to resume paying the Notes after the end of such Payment Blockage
Period. The Notes shall not be subject to more than one Payment Blockage Period
in any consecutive 360-day period irrespective of the number of defaults with
respect to Designated Senior Indebtedness of the Issuers during such period. However,
in no event shall the total number of days during which any Payment Blockage
Period or Periods on the Notes is in effect exceed 179 days in the aggregate
during any consecutive 360-day period, and there must be at least 181 days
during any consecutive 360-day period during which no Payment Blockage Period
is in effect. Notwithstanding the foregoing, however, no default that existed
or was continuing on the date of delivery of any Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Blockage Notice unless such
default shall have been waived for a period of not less than 90 days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants during the period after the date of delivery of a Blockage Notice,
that, in either case, would give rise to a Non-Payment Default pursuant to any
provisions under which a Non-Payment Default previously existed or was
continuing shall constitute a new Non-Payment Default for this purpose).

 

Section 10.04                          Acceleration
of Payment of Notes.

 

If payment of the Notes is
accelerated because of an Event of Default, the Issuers shall promptly notify
the holders of the Designated Senior Indebtedness of the Issuers or the
Representative of such Designated Senior Indebtedness of the acceleration; provided
that any failure to give such notice shall have no effect whatsoever on the
provisions of this Article 10. If any Designated Senior Indebtedness

 

100

 

of the Issuers is
outstanding, the Issuers may not pay the Notes until five Business Days
after the Representatives of all the holders of such Designated Senior
Indebtedness receive notice of such acceleration and, thereafter, may pay
the Notes only if this Indenture otherwise permits payment at that time.

 

Section 10.05                          When
Distribution Must Be Paid Over.

 

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

 

Section 10.06                          Subrogation.

 

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

 

Section 10.07                          Relative
Rights.

 

This Article 10 defines
the relative rights of Holders and holders of Senior Indebtedness of the Issuers.
Nothing in this Indenture shall:

 

(i)                                     impair, as between the Issuers
and Holders, the obligation of the Issuers, which is absolute and
unconditional, to pay principal of and interest on the Notes in accordance with
their terms;

 

(ii)                                  prevent the Trustee or any Holder
from exercising its available remedies upon a Default, subject to the rights of
holders of Senior Indebtedness of the Issuers to receive payments or
distributions otherwise payable to Holders and such other rights of such
holders of Senior Indebtedness as set forth herein; or

 

(iii)                               affect the relative rights
of Holders and creditors of the Issuers other than their rights in relation to
holders of Senior Indebtedness.

 

Section 10.08                          Subordination
May Not Be Impaired by Issuers.

 

No right of any holder of
Senior Indebtedness of the Issuers to enforce the subordination of the Indebtedness
evidenced by the Notes shall be impaired by any act or failure to act by the Issuers
or by their failure to comply with this Indenture.

 

Section 10.09                          Rights
of Trustee and Paying Agent.

 

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

 

101

 

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

 

Section 10.10                          Distribution
or Notice to Representative.

 

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

 

Section 10.11                          Article 10
Not To Prevent Events of Default or Limit Right To Accelerate.

 

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

 

Section 10.12                          Trust
Moneys Not Subordinated.

 

Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds
of Government Securities held in trust by the Trustee for the payment of
principal of and interest on the Notes pursuant to Article 8 or Article 13
hereof shall not be subordinated to the prior payment of any Senior
Indebtedness of the Issuers or subject to the restrictions set forth in this Article 10,
and none of the Holders shall be obligated to pay over any such amount to the Issuers
or any holder of Senior Indebtedness of the Issuers or any other creditor of
the Issuers, provided that the subordination provisions of this Article 10
were not violated at the time the applicable amounts were deposited in trust
pursuant to Article 8 or Article 13 hereof, as the case may be.

 

Section 10.13                          Trustee
Entitled To Rely.

 

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

 

102

 

Section 10.14                          Trustee
To Effectuate Subordination.

 

A Holder by its acceptance
of a Note agrees to be bound by this Article 10 and authorizes and expressly
directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination between the Holders
and the holders of Senior Indebtedness of the Issuers as provided in this Article 10
and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

Section 10.15                          Trustee
Not Fiduciary for Holders of Senior Indebtedness of the Issuers.

 

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

 

Section 10.16                          Reliance
by Holders of Senior Indebtedness of the Issuers on Subordination Provisions.

 

Each Holder by accepting a Note
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of the Issuers, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Notes, to acquire and
continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of such Senior Indebtedness shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.

 

Without in any way limiting
the generality of the foregoing paragraph, the holders of Senior Indebtedness
of the Issuers may, at any time and from time to time, without the consent of
or notice to the Trustee or the Holders, without incurring responsibility to
the Trustee or the Holders and without impairing or releasing the subordination
provided in this Article 10 or the obligations hereunder of the Holders to
the holders of the Senior Indebtedness of the Issuers, do any one or more of
the following:  (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Indebtedness of the
Issuers, or otherwise amend or supplement in any manner Senior Indebtedness of
the Issuers, or any instrument evidencing the same or any agreement under which
Senior Indebtedness of the Issuers is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness of the Issuers; (iii) release any Person
liable in any manner for the payment or collection of Senior Indebtedness of
the Issuers; and (iv) exercise or refrain from exercising any rights
against the Issuers and any other Person.

 

ARTICLE 11

 

GUARANTEES

 

Section 11.01                                    Guarantee.

 

Subject to this Article 11,
from and after the consummation of the Acquisition, each of the Guarantors
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Issuers hereunder or thereunder,
that: (a) the principal of, premium or interest on, or Additional Interest
in respect of the Notes shall be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Issuers to the Holders or the Trustee hereunder or thereunder
shall be promptly paid in full or performed,

 

103

 

all in accordance with the
terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that same shall
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.

 

The Guarantors hereby agree
that their obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Issuers, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuers, any right to require a proceeding first against the
Issuers, protest, notice and all demands whatsoever and covenants that this Guarantee
shall not be discharged except by complete performance of the obligations
contained in the Notes and this Indenture.

 

Each Guarantor also agrees
to pay any and all costs and expenses (including reasonable attorneys’ fees)
incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

 

If any Holder or the Trustee
is required by any court or otherwise to return to the Issuers, the Guarantors
or any custodian, trustee, liquidator or other similar official acting in
relation to either the Issuers or the Guarantors, any amount paid either to the
Trustee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.

 

Each Guarantor agrees that
it shall not be entitled to any right of subrogation in relation to the Holders
in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such acceleration
in respect of the obligations guaranteed hereby, and (y) in the event of any declaration
of acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Guarantee. The Guarantors
shall have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Guarantees.

 

Each Guarantee shall remain
in full force and effect and continue to be effective should any petition be
filed by or against the Issuers for liquidation, reorganization, should the
Issuers become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any significant part of
the Issuers’ assets, and shall, to the fullest extent permitted by law, continue
to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Notes are, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by any obligee
on the Notes or Guarantees, whether as a “voidable preference,” “fraudulent
transfer” or otherwise, all as though such payment or performance had not been
made. In the event that any payment or any part thereof, is rescinded,
reduced, restored or returned, the Notes shall, to the fullest extent permitted
by law, be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

 

104

 

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

 

The Guarantee issued by any
Guarantor shall be a general unsecured senior subordinated obligation of such
Guarantor and shall be subordinated
in right of payment to all existing and future Senior Indebtedness of such Guarantor,
if any.

 

Each payment to be made by a
Guarantor in respect of its Guarantee shall be made without set-off,
counterclaim, reduction or diminution of any kind or nature.

 

Section 11.02                                    Limitation on Guarantor Liability.

 

Each Guarantor, and by its
acceptance of Notes, each Holder, hereby confirms that it is the intention of
all such parties that the Guarantee of such Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal
or state law to the extent applicable to any Guarantee. To effectuate the
foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably
agree that the obligations of each Guarantor shall be limited to the maximum
amount as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 11,
result in the obligations of such Guarantor under its Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under applicable law.
Each Guarantor that makes a payment under its Guarantee shall be entitled upon
payment in full of all guaranteed obligations under this Indenture to a contribution
from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net
assets of all the Guarantors at the time of such payment determined in accordance
with GAAP.

 

Section 11.03                                    Execution and Delivery.

 

To evidence its Guarantee
set forth in Section 11.01 hereof,
each Guarantor hereby agrees that this Indenture shall be executed on behalf of
such Guarantor by its President, one of its Vice Presidents or one of its
Assistant Vice Presidents.

 

Each Guarantor hereby agrees
that its Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding the
absence of the endorsement of any notation of such Guarantee on the Notes.

 

If an Officer whose
signature is on this Indenture no longer holds that office at the time the
Trustee authenticates the Note, the Guarantee shall be valid nevertheless.

 

The delivery of any Note by
the Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Guarantee set forth in this Indenture on behalf of the
Guarantors.

 

If required by Section 4.15
hereof, the Company shall cause any newly created or acquired Restricted
Subsidiary that is not a Guarantor to comply with the provisions of Section 4.15
hereof and this Article 11,
to the extent applicable.

 

105

 

Section 11.04                                    Subrogation.

 

Each Guarantor shall be
subrogated to all rights of Holders of Notes against the Issuers in respect of
any amounts paid by any Guarantor pursuant to the provisions of Section 11.01 hereof; provided that, if an
Event of Default has occurred and is continuing, no Guarantor shall be entitled
to enforce or receive any payments arising out of, or based upon, such right of
subrogation until all amounts then due and payable by the Issuers under this
Indenture or the Notes shall have been paid in full.

 

Section 11.05                                    Benefits Acknowledged.

 

Each Guarantor acknowledges
that it will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the guarantee and waivers made by it
pursuant to its Guarantee are knowingly made in contemplation of such benefits.

 

Section 11.06                                    Release of Guarantees.

 

A Guarantee by a Guarantor
shall be automatically and unconditionally released and discharged, and no
further action by such Guarantor, the Issuers or the Trustee is required for
the release of such Guarantor’s Guarantee, upon:

 

(1)                                  (A)  any sale, exchange or transfer (by
merger or otherwise) of the Capital Stock of such Guarantor (including any
sale, exchange or transfer, after which the applicable Guarantor is no longer a
Restricted Subsidiary), if such sale, exchange or transfer is made in
compliance with the applicable provisions of this Indenture;

 

(B)                                the release or discharge of the guarantee by
such Guarantor of the Senior Credit Facilities or the guarantee which resulted
in the creation of such Guarantee, except a discharge or release by or as a
result of payment under such guarantee;

 

(C)                                the proper designation of any Restricted
Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with
Section 4.07 hereof and the definition of “Unrestricted Subsidiary” in Section 1.01
hereof; or

 

(D)                               the Issuers exercising their Legal Defeasance
option or Covenant Defeasance option in accordance with Article 8 hereof
or the Issuers’ obligations under this Indenture being discharged in accordance
with the terms of this Indenture; and

 

(2)                                   such Guarantor delivering to the Trustee an
Officer’s Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for in this Indenture relating to such
transaction have been complied with.

 

ARTICLE 12

 

SUBORDINATION OF GUARANTEES

 

Section 12.01                                    Agreement
To Subordinate.

 

Each Guarantor agrees, and
each Holder by accepting a Note agrees, that the obligations of such Guarantor under
its Guarantee are subordinated in right of payment, to the extent and in the manner
provided in this Article 12, to the prior payment in full of all existing
and future Senior Indebtedness of such Guarantor and that the subordination is
for the benefit of and enforceable by the holders of such

 

106

 

Senior Indebtedness. A
Guarantor’s obligations under its Guarantee shall in all respects rank pari passu in right of payment with all existing and future
Senior Subordinated Indebtedness of such Guarantor, and will be senior in right
of payment to all existing and future Subordinated Indebtedness of such
Guarantor; and only Indebtedness of such Guarantor that is Senior Indebtedness
shall rank senior to the obligations of such Guarantor under its Guarantee in
accordance with the provisions set forth herein. All provisions of this Article 12
shall be subject to Section 12.12.

 

Section 12.02                                    Liquidation,
Dissolution, Bankruptcy.

 

Upon any payment or
distribution of the assets of a Guarantor to creditors upon a total or partial
liquidation or a total or partial dissolution of such Guarantor or in a
reorganization of or similar proceeding relating to such Guarantor or its
property:

 

(i)                                     the holders of Senior
Indebtedness of such Guarantor shall be entitled to receive payment in full in
cash of such Senior Indebtedness before Holders shall be entitled to receive
any payment; and

 

(ii)                                  until the Senior
Indebtedness of such Guarantor is paid in full in cash, any payment or
distribution to which Holders would be entitled but for the subordination
provisions of this Indenture shall be made to holders of such Senior
Indebtedness as their interests may appear, except that Holders may receive
Permitted Junior Securities.

 

Section 12.03                                    Default
on Senior Indebtedness of a Guarantor.

 

A Guarantor shall not make
any payment pursuant to its Guarantee (or pay any other Obligations relating to
its Guarantee, including Additional Interest, fees, costs, expenses,
indemnities and rescission or damage claims) and may not purchase, redeem
or otherwise retire any Notes (collectively, “pay its Guarantee”)
(except in the form of Permitted Junior Securities) if either of the
following occurs (a “Guarantor Payment Default”):

 

(i)                                     any Obligation on any
Designated Senior Indebtedness of such Guarantor is not paid in full in cash
when due (after giving effect to any applicable grace period); or

 

(ii)                                  any other default on
Designated Senior Indebtedness of such Guarantor occurs and the maturity of
such Designated Senior Indebtedness is accelerated in accordance with its
terms;

 

unless, in either case, the Guarantor
Payment Default has been cured or waived and any such acceleration has been
rescinded or such Designated Senior Indebtedness has been paid in full in cash;
provided, however, that such Guarantor shall be entitled to pay its
Guarantee without regard to the foregoing if such Guarantor and the Trustee
receive written notice approving such payment from the Representatives of all
Designated Senior Indebtedness with respect to which the Guarantor Payment
Default has occurred and is continuing.

 

During the continuance of
any default (other than a Guarantor Payment Default) (a “Non-Guarantor Payment
Default”) with respect to any Designated Senior Indebtedness of a Guarantor
pursuant to which the maturity thereof may be accelerated without further
notice (except such notice as may be required to effect such acceleration)
or the expiration of any applicable grace periods, such Guarantor shall not pay
its Guarantee (except in the form of Permitted Junior Securities) for a
period (a “Guarantee Payment Blockage Period”) commencing upon the
receipt by the Trustee (with a copy to such Guarantor and the Issuers) of
written notice (a “Guarantee Blockage Notice”) of such Non-Guarantor Payment

 

107

 

Default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Guarantee Payment Blockage Period and ending 179 days thereafter.
So long as there shall remain outstanding any Senior Indebtedness under the
Senior Credit Facilities, a Guarantee Blockage Notice may be given only by
the administrative agent thereunder unless otherwise agreed to in writing by
the requisite lenders named therein. The Guarantee Payment Blockage Period
shall end earlier if such Guarantee Payment Blockage Period is terminated (i) by
written notice to the Trustee, the relevant Guarantor and the Issuers from the
Person or Persons who gave such Guarantee Blockage Notice; (ii) because
the default giving rise to such Guarantee Blockage Notice is cured, waived or
otherwise no longer continuing; or (iii) because such Designated Senior
Indebtedness has been discharged or repaid in full in cash.

 

Notwithstanding the
provisions described in the immediately preceding two sentences (but subject to
the provisions contained in the first sentence of this Section 12.03 and Section 12.02
hereof), unless the holders of such Designated Senior Indebtedness or the
Representative of such Designated Senior Indebtedness shall have accelerated
the maturity of such Designated Senior Indebtedness or a Guarantor Payment
Default has occurred and is continuing, the relevant Guarantor shall be
entitled to resume paying its Guarantee after the end of such Guarantee Payment
Blockage Period. Each Guarantee shall not be subject to more than one Guarantee
Payment Blockage Period in any consecutive 360-day period irrespective of the
number of defaults with respect to Designated Senior Indebtedness of the relevant
Guarantor during such period; provided
that if any Guarantee Blockage Notice is delivered to the Trustee by or on
behalf of the holders of Designated Senior Indebtedness of such Guarantor (other
than the holders of Indebtedness under the Senior Credit Facilities), a
Representative of holders of Indebtedness under the Senior Credit Facilities may give
another Guarantee Blockage Notice within such period. However, in no event
shall the total number of days during which any Guarantee Payment Blockage
Period or Periods on a Guarantee is in effect exceed 179 days in the aggregate
during any consecutive 360-day period, and there must be at least 181 days
during any consecutive 360-day period during which no Guarantee Payment
Blockage Period is in effect. Notwithstanding the foregoing, however, no
default that existed or was continuing on the date of delivery of any Guarantee
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Guarantee Blockage Notice unless such default shall have been waived for a
period of not less than 90 days (it being acknowledged that any subsequent
action, or any breach of any financial covenants during the period after the
date of delivery of a Guarantee Blockage Notice, that, in either case, would
give rise to a Non-Guarantor Payment Default pursuant to any provisions under
which a Non-Guarantor Payment Default previously existed or was continuing shall
constitute a new Non-Guarantor Payment Default for this purpose).

 

Section 12.04                                    Demand
for Payment.

 

If payment of the Notes is
accelerated because of an Event of Default and a demand for payment is made on
a Guarantor pursuant to Article 11 hereof, the Issuers or such Guarantor shall
promptly notify the holders of the Designated Senior Indebtedness of such Guarantor
or the Representative of such Designated Senior Indebtedness of such demand; provided
that any failure to give such notice shall have no effect whatsoever on the
provisions of this Article 12. If any Designated Senior Indebtedness of a Guarantor
is outstanding, such Guarantor may not pay its Guarantee until five
Business Days after the Representatives of all the issuers of such Designated Senior
Indebtedness receive notice of such acceleration and, thereafter, may pay its
Guarantee only if this Indenture otherwise permits payment at that time.

 

108

 

Section 12.05                                    When
Distribution Must Be Paid Over.

 

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

 

Section 12.06                                    Subrogation.

 

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

 

Section 12.07                                    Relative
Rights.

 

This Article 12 defines
the relative rights of Holders and holders of Senior Indebtedness of a
Guarantor. Nothing in this Indenture shall:

 

(i)                                     impair, as between such
Guarantor and Holders, the obligation of such Guarantor, which is absolute and
unconditional, to make payments under its Guarantee in accordance with its
terms;

 

(ii)                                  prevent the Trustee or any
Holder from exercising its available remedies upon a default by such Guarantor
under its obligations with respect to its Guarantee, subject to the rights of
holders of Senior Indebtedness of such Guarantor to receive payments or
distributions otherwise payable to Holders and such other rights of such
holders of Senior Indebtedness as set forth herein; or

 

(iii)                               affect the relative rights
of Holders and creditors of such Guarantor other than their rights in relation
to holders of Senior Indebtedness.

 

Section 12.08                                    Subordination
May Not Be Impaired by a Guarantor.

 

No right of any holder of
Senior Indebtedness of a Guarantor to enforce the subordination of the
obligations of such Guarantor under its Guarantee shall be impaired by any act
or failure to act by such Guarantor or by its failure to comply with this Indenture.

 

Section 12.09                                    Rights
of Trustee and Paying Agent.

 

Notwithstanding Section 12.03
hereof, the Trustee or any Paying Agent may continue to make payments on
the Notes and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any payments unless, not less than two
Business Days prior to the date of such payment, a Responsible Officer of the
Trustee receives notice satisfactory to him that payments may not be made
under this Article 12. A Guarantor, the Registrar, the Paying Agent,
a Representative or a holder of Senior Indebtedness of such Guarantor shall be
entitled to give the notice; provided, however, that, if an issue
of Senior Indebtedness of such Guarantor has a Representative, only the
Representative shall be entitled to give the notice.

 

The Trustee in its
individual or any other capacity shall be entitled to hold Senior Indebtedness
of a Guarantor with the same rights it would have if it were not Trustee. The
Registrar and the

 

109

 

Paying Agent shall be
entitled to do the same with like rights. The Trustee shall be entitled to all
the rights set forth in this Article 12 with respect to any Senior
Indebtedness of a Guarantor which may at any time be held by it, to the
same extent as any other holder of such Senior Indebtedness; and nothing in Article 7
shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 12
shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof or any other Section of this Indenture.

 

Section 12.10                                    Distribution
or Notice to Representative.

 

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

 

Section 12.11                                    Article 12
Not To Prevent Events of Default or Limit Right To Demand Payment.

 

The failure of a Guarantor
to make a payment pursuant its Guarantee by reason of any provision in this Article 12
shall not be construed as preventing the occurrence of a default by such Guarantor
under its Guarantee. Nothing in this Article 12 shall have any effect on
the right of the Holders or the Trustee to make a demand for payment on a
Guarantor pursuant to Article 11 hereof.

 

Section 12.12                          Trust
Moneys Not Subordinated.

 

Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of Government
Securities held in trust by the Trustee for the payment of principal of and
interest on the Notes pursuant to Article 8 or Article 13 hereof
shall not be subordinated to the prior payment of any Senior Indebtedness of
any Guarantor or subject to the restrictions set forth in this Article 12,
and none of the Holders shall be obligated to pay over any such amount to such
Guarantor or any holder of Senior Indebtedness of such Guarantor or any other
creditor of such Guarantor, provided that the subordination provisions
of this Article 12 were not violated at the time the applicable amounts
were deposited in trust pursuant to Article 8 or Article 13 hereof,
as the case may be

 

Section 12.13                                    Trustee
Entitled To Rely.

 

Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Holders
shall be entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
hereof are pending, (b) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to the
Holders or (c) upon the Representatives of Senior Indebtedness of a
Guarantor for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of such Senior Indebtedness and
other Indebtedness of such Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 12. In the event that the Trustee determines,
in good faith, that evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness of a Guarantor to participate in any
payment or distribution pursuant to this Article 12, the Trustee shall be
entitled to request such Person to furnish evidence to the reasonable satisfaction
of the Trustee as to the amount of such Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article 12, and, if such evidence is not furnished, the Trustee
shall be entitled to defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions
or omissions of actions by the Trustee pursuant to this Article 12.

 

110

 

Section 12.14                                    Trustee
To Effectuate Subordination.

 

A Holder by its acceptance
of a Note agrees to be bound by this Article 12 and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination between the Holders
and the holders of Senior Indebtedness of a Guarantor as provided in this Article 12
and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

Section 12.15                                    Trustee
Not Fiduciary for Holders of Senior Indebtedness of Guarantors.

 

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

 

Section 12.16                          Reliance
by Holders of Senior Indebtedness of a Guarantor on Subordination Provisions.

 

Each Holder by accepting a
Note acknowledges and agrees that the foregoing subordination provisions are,
and are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of a Guarantor, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Notes, to acquire and
continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of such Senior Indebtedness shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.

 

Without in any way limiting
the generality of the foregoing paragraph, the holders of Senior Indebtedness
of a Guarantor may, at any time and from time to time, without the consent of
or notice to the Trustee or the Holders, without incurring responsibility to
the Trustee or the Holders and without impairing or releasing the subordination
provided in this Article 12 or the obligations hereunder of the Holders to
the holders of the Senior Indebtedness of such Guarantor, do any one or more of
the following:  (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Indebtedness of
such Guarantor, or otherwise amend or supplement in any manner Senior
Indebtedness of such Guarantor, or any instrument evidencing the same or any
agreement under which Senior Indebtedness of such Guarantor is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness of such Guarantor; (iii) release
any Person liable in any manner for the payment or collection of Senior
Indebtedness of such Guarantor; and (iv) exercise or refrain from
exercising any rights against such Guarantor and any other Person.

 

ARTICLE 13

 

SATISFACTION AND DISCHARGE

 

Section 13.01                                    Satisfaction and Discharge.

 

This Indenture shall be
discharged and shall cease to be of further effect as to all Notes, when either:

 

(1)                                  all Notes theretofore authenticated and
delivered, except lost, stolen or destroyed Notes which have been replaced or
paid and Notes for whose payment money has theretofore been deposited in trust,
have been delivered to the Trustee for cancellation; or

 

111

 

(2)                                  (A)  all Notes not theretofore delivered
to the Trustee for cancellation have become due and payable by reason of the
making of a notice of redemption or otherwise, 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
by the Trustee in the name, and at the expense, of the Issuers and the Issuers
or any Guarantor have irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust solely for the benefit of the Holders of the
Notes, cash in U.S. dollars, Government Securities, or a combination thereof,
in such amounts as will be sufficient without consideration of any reinvestment
of interest to pay and discharge the entire indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation for principal, premium,
if any, and accrued interest to the date of maturity or redemption;

 

(B)                                no Default (other than that resulting from
borrowing funds to be applied to make such deposit or any similar and
simultaneous deposit relating to other Indebtedness) with respect to this
Indenture or the Notes shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such deposit will
not result in a breach or violation of, or constitute a default under the
Senior Credit Facilities or any other material agreement or instrument (other
than this Indenture) to which the Issuers or any Guarantor is a party or by
which the Issuers or any Guarantor is bound (other than that resulting from any
borrowing of funds to be applied to make such deposit and any similar and
simultaneous deposit relating to other Indebtedness);

 

(C)                                the Issuers have paid or caused to be paid
all sums payable by it under this Indenture; and

 

(D)                               the Issuers have delivered irrevocable
instructions to the Trustee to apply the deposited money toward the payment of
the Notes at maturity or the redemption date, as the case may be.

 

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

 

Notwithstanding the
satisfaction and discharge of this Indenture, if money shall have been
deposited with the Trustee pursuant to subclause (A) of clause (2) of
this Section 13.01, the provisions of Section 13.02 and Section 8.06
hereof shall survive.

 

Section 13.02                                    Application of Trust Money.

 

Subject to the provisions of
Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 13.01
hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuers acting as their own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium and Additional Interest, if any) and interest for
whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by law.

 

If the Trustee or Paying
Agent is unable to apply any money or Government Securities in accordance with Section 13.01
hereof by reason of any legal proceeding or by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuers’ and any Guarantor’s obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 13.01 hereof; provided
that if the

 

112

 

Issuers have made any
payment of principal of, premium and Additional Interest, if any, or interest
on 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 Government Securities held by the Trustee or Paying
Agent.

 

ARTICLE 14

 

MISCELLANEOUS

 

Section 14.01                                    Trust Indenture Act Controls.

 

If any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by Trust Indenture Act Section 318(c),
the imposed duties shall control.

 

Section 14.02                                    Notices.

 

Any notice or communication
by the Issuers, any Guarantor or the Trustee to the others is duly given if in
writing and delivered in person or mailed by first-class mail (registered
or certified, return receipt requested), fax or overnight air courier
guaranteeing next day delivery, to the others’ address:

 

If to the Issuers and/or any
Guarantor:

 

c/o Encore Medical Finance
LLC

9800 Metric Blvd.

Austin, Texas  78758

Facsimile:  (512) 832 6310

Attention:  Harry L. Zimmerman

 

If to the Trustee:

 

The Bank of New York

101 Barclay Street, Floor 8W

New York, New York 10286

Fax No.: (212) 815-5704

Attention:  Corporate Trust
Administration

 

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

 

All notices and
communications (other than those sent to Holders) shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five calendar
days after being deposited in the mail, postage prepaid, if mailed by first-class mail;
when receipt acknowledged, if faxed; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery; provided that any notice or communication delivered to the
Trustee shall be deemed effective upon actual receipt thereof.

 

Any notice or communication
to a Holder shall be mailed by first-class mail, certified or registered,
return receipt requested, or by overnight air courier guaranteeing next day
delivery to its address shown on the register kept by the Registrar. Any notice
or communication shall also be so mailed to any Person described in Trust
Indenture Act Section 313(c), to the extent required by the Trust

 

113

 

Indenture Act. 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 within the time prescribed, it is duly
given, whether or not the addressee receives it.

 

If the Issuers mail a notice
or communication to Holders, they shall mail a copy to the Trustee and each
Agent at the same time.

 

Section 14.03                                    Communication by Holders of Notes with Other
Holders of Notes.

 

Holders may communicate
pursuant to Trust Indenture Act Section 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 Trust Indenture Act Section 312(c).

 

Section 14.04                                    Certificate and Opinion as to Conditions Precedent.

 

Upon any request or
application by the Issuers or any of the Guarantors to the Trustee to take any
action under this Indenture, the Issuers or such Guarantor, as the case may be,
shall furnish to the Trustee:

 

(a)                                  An Officer’s Certificate in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 14.05 hereof) stating that, in the opinion
of the signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and

 

(b)                                 An Opinion of Counsel in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 14.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.

 

Section 14.05                                    Statements Required in Certificate or Opinion.

 

Each certificate or opinion
with respect to compliance with a condition or covenant provided for in this
Indenture (other than a certificate provided pursuant to Section 4.04
hereof or Trust Indenture Act Section 314(a)(4)) shall comply with the provisions
of Trust Indenture Act Section 314(e) and shall include:

 

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

 

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

 

(c)                                  a statement that, in the opinion of such
Person, he or she 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, in the case of an Opinion of Counsel, may be
limited to reliance on an Officer’s Certificate as to matters of fact); and

 

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

 

114

 

Section 14.06                                    Rules by Trustee and Agents.

 

The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements
for its functions.

 

Section 14.07                                    No Personal Liability of Directors, Officers,
Employees and Stockholders.

 

No director, officer,
employee, incorporator or stockholder of any Issuer or Guarantor or any of
their parent companies shall have any liability for any obligations of the
Issuers or the Guarantors under the Notes, the Guarantees or this Indenture or
for any claim based on, in respect of, or by reason of such obligations or
their creation. Each Holder by accepting Notes waives and releases all such
liability. The waiver and release are part of the consideration for
issuance of the Notes.

 

Section 14.08                                    Governing Law.

 

THIS INDENTURE, THE NOTES
AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

 

Section 14.09                                    Waiver of Jury Trial.

 

EACH OF THE ISSUERS, THE
GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 14.10                                    Force Majeure.

 

In no event shall the
Trustee be responsible or liable for any failure or delay in the performance of
its obligations under this Indenture arising out of or caused by, directly or
indirectly, forces beyond its reasonable control, including without limitation
strikes, work stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software or hardware) services.

 

Section 14.11                                    No Adverse Interpretation of Other Agreements.

 

This Indenture may not
be used to interpret any other indenture, loan or debt agreement of the Company
or its Restricted Subsidiaries or of any other Person. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.

 

Section 14.12                                    Successors.

 

All agreements of the Issuers
in this Indenture and the Notes shall bind its successors. All agreements of
the Trustee in this Indenture shall bind their successors. All agreements of
each Guarantor in this Indenture shall bind its successors, except as otherwise
provided in Section 11.05 hereof.

 

Section 14.13                                    Severability.

 

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

 

115

 

Section 14.14                                    Counterpart 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.

 

Section 14.15                                    Table of Contents, Headings, etc.

 

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

 

Section 14.16                                    Qualification
of Indenture.

 

The Issuers and the
Guarantors shall qualify this Indenture under the Trust Indenture Act 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, the Guarantors 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 and the
Guarantors any such Officer’s Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the Trust Indenture Act.

 

[Signatures on following page]

 

116

 

	
   

  	
  ENCORE
  MEDICAL FINANCE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harry L. Zimmerman

  	
   

  
	
   

  	
   

  	
  Name: Harry L. Zimmerman

  
	
   

  	
   

  	
  Title: Executive Vice
  President-General Counsel, Secretary and Assistant Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ENCORE
  MEDICAL FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harry L. Zimmerman

  	
   

  
	
   

  	
   

  	
  Name: Harry L.
  Zimmerman

  
	
   

  	
   

  	
  Title: Executive Vice President-General Counsel,
  Secretary and Assistant Treasurer

  

 

Signature Page to Senior Subordinated Indenture

 

 

	
   

  	
  ENCORE
  MEDICAL LLC

  
	
   

  	
  ENCORE
  MEDICAL, L.P.

  
	
   

  	
  ENCORE
  MEDICAL IHC, INC.

  
	
   

  	
  ENCORE
  MEDICAL ASSET CORPORATION

  
	
   

  	
  ENCORE
  MEDICAL GP, INC.

  
	
   

  	
  ENCORE
  MEDICAL PARTNERS, INC.

  
	
   

  	
  EMPI, INC.

  
	
   

  	
  EMPI
  CORP.

  
	
   

  	
  EMPI
  SALES CORP.

  
	
   

  	
  COMPEX TECHNOLOGIES, LLC

  
	
   

  	
  SPECTRA BRACE, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harry L. Zimmerman

  	
   

  
	
   

  	
   

  	
  Name: Harry L.
  Zimmerman

  
	
   

  	
   

  	
  Title: Executive Vice President-General Counsel,
  Secretary and Assistant Treasurer

  

 

 

	
   

  	
  THE
  BANK OF NEW YORK, a New York banking

  corporation, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mary LaGumina

  	
   

  
	
   

  	
   

  	
  Name:
  Mary LaGumina

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

EXHIBIT A

 

[Face of Note]

 

[Insert the Global Note
Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert the Private
Placement Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert the Regulation S
Temporary Global Note Legend, if applicable pursuant to the provisions of the Indenture]

 

A-1

 

CUSIP 
[                     ]

 

ISIN 
[                     ](1)

 

[[RULE 144A][REGULATION S] GLOBAL NOTE

representing up to

$                    ]

113⁄4%
Senior Subordinated Notes due 2014

 

	
  No.

  	
   

  	
  [$                   ]

  

 

ENCORE MEDICAL FINANCE LLC

ENCORE MEDICAL FINANCE CORP.

 

promises to pay to CEDE &
CO. or registered assigns, the principal sum [of                                            
United States Dollars] [as revised by the Schedule of Exchanges of
Interests in the Global Note attached hereto,] on November 15, 2014.

 

Interest Payment Dates:  May 15 and November 15

 

Record Dates:  May 1 and November 1

 

(1)                                  Rule 144A
Note 292572AA2
 Rule 144A Note ISIN:  US292572AA25

Regulation S Note CUSIP:  U29164AA5

Regulation S Note ISIN:  USU29164AA51

Exchange Note CUSIP: 292572AB0

Exchange Note ISIN: US292572AB08

 

A-2

 

IN WITNESS HEREOF, the
Issuers have caused this instrument to be duly executed.

 

Dated:

 

	
   

  	
  ENCORE
  MEDICAL FINANCE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ENCORE
  MEDICAL FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-3

 

This is one of the Notes
referred to in the within-mentioned Indenture:

 

 

	
   

  	
  THE
  BANK OF NEW YORK, a New York

  banking corporation, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

A-4

 

[Back of Note]

 

113⁄4%
Senior Subordinated Notes due 2014

 

Capitalized terms used
herein shall have the meanings assigned to them in the Indenture referred to
below unless otherwise indicated.

 

1.                                       INTEREST. Encore
Medical Finance LLC, a Delaware limited liability company, and Encore Medical
Finance Corp., a Delaware corporation, jointly and severally promise to pay interest
on the principal amount of this Note at 113⁄4% per annum from November 3,
2006 until maturity and shall pay the Additional Interest, if any, payable
pursuant to the Registration Rights Agreement referred to below. The Issuers
will pay interest and Additional Interest, if any, semi-annually in arrears on May 15
and November 15 of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each, an “Interest Payment Date”). Interest
on the Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance; provided
that the first Interest Payment Date shall be May 15, 2007. The Issuers
will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at the interest rate on the Notes; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest, if any, (without regard to
any applicable grace periods) from time to time on demand at the interest rate
on the Notes. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.

 

2.                                       METHOD OF
PAYMENT. The Issuers will pay interest on the Notes and Additional Interest, if
any, to the Persons who are registered Holders of Notes at the close of business
on the May 1 or November 1 (whether or not a Business Day), as the
case may be, next preceding the Interest Payment Date, even if such Notes
are cancelled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest. Payment of interest and Additional Interest, if any, may be
made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest,
premium and Additional Interest, if any, on, all Global Notes and all other
Notes the Holders of which shall have provided wire transfer instructions to
the Issuers or the Paying Agent. Such payment shall be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.

 

3.                                       PAYING AGENT
AND REGISTRAR. Initially, The Bank of New York, a New York banking corporation,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Issuers may change any Paying Agent or Registrar without notice to the
Holders. The Company or any of its Subsidiaries may act in any such capacity.

 

4.                                       INDENTURE. The
Issuers issued the Notes under an Indenture, dated as of November 3, 2006
(the “Indenture”), among Encore Medical Finance LLC, Encore Medical
Finance Corp., the Guarantors named therein and the Trustee. This Note is one
of a duly authorized issue of notes of the Issuers, designated as 113⁄4% Senior
Subordinated Notes due 2014. The Issuers shall be entitled to issue Additional Notes
pursuant to Section 2.01 and Section 4.09 of the Indenture. The terms
of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. To the
extent any provision

 

A-5

 

of this Note conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling.

 

5.                                       OPTIONAL
REDEMPTION.

 

(a)                                  Except as described
below under clauses 5(b) and 5(c) hereof, the Notes will not be
redeemable at the Issuers’ option before November 15, 2010.

 

(b)                                 At any time
prior to November 15, 2010, the Issuers may redeem all or a part of
the Notes, upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to the registered address of each Holder or otherwise
delivered in accordance with the procedures of DTC, at a redemption price equal
to 100% of the principal amount of the Notes redeemed plus the Applicable Premium
as of, and accrued and unpaid interest and Additional Interest, if any, to the
date of redemption (the “Redemption
Date”), subject to the rights of Holders on the relevant Record Date
to receive interest due on the relevant Interest Payment Date.

 

(c)                                  Until November 15,
2009, the Issuers may, at their option, redeem up to 35% of the aggregate
principal amount of Notes issued by them at a redemption price equal to 111.75%
of the aggregate principal amount thereof, plus accrued and unpaid interest thereon
and Additional Interest, if any, to the applicable Redemption Date, subject to
the right of Holders of Notes of record on the relevant Record Date to receive
interest due on the relevant Interest Payment Date, with the net cash proceeds
of one or more Equity Offerings; provided
that at least 65% of the aggregate principal amount of Notes originally issued
under the Indenture and any Additional Notes that are Notes issued under the Indenture
after the Issue Date remains outstanding immediately after the occurrence of
each such redemption; provided  further that each such
redemption occurs within 90 days of the date of closing of each such Equity
Offering. Notice of any redemption upon any Equity Offering may be given
prior to the redemption thereof, and any such redemption or notice may, at the
Issuers’ discretion, be subject to one or more conditions precedent, including,
but not limited to, the completion of the related Equity Offering.

 

(d)                                 On and after November 15,
2010, the Issuers may redeem the Notes, in whole or in part, upon not less
than 30 nor more than 60 days prior notice by first-class mail, postage prepaid,
with a copy to the Trustee, to each Holder of Notes at the address of such
Holder appearing in the security register, at the redemption prices (expressed
as percentages of principal amount of the Notes to be redeemed) set forth
below, plus accrued and unpaid interest thereon and Additional Interest, if
any, to the applicable Redemption Date, subject to the right of Holders of
Notes of record on the relevant Record Date to receive interest due on the
relevant Interest Payment Date, if redeemed during the twelve-month period
beginning on November 15 of each of the years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2010

  	
   

  	
  105.875

  	
  %

  
	
  2011

  	
   

  	
  102.938

  	
  %

  
	
  2012 and thereafter

  	
   

  	
  100.000

  	
  %

  

                                                                                                (e)                                  Any redemption
pursuant to this paragraph 5 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 of the Indenture.

 

6.                                       MANDATORY
REDEMPTION. The Issuers shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.

 

A-6

 

7.                                       NOTICE OF
REDEMPTION. Subject to Section 3.03 of the Indenture, notice of redemption
will be mailed by first-class mail at least 30 days but not more than 60
days before the redemption date (except that redemption notices may be mailed
more than 60 days prior to a redemption date if the notice is issued in connection
with Article 8 or Article 13 of the Indenture) to each Holder whose Notes
are to be redeemed at its registered address. Notes in denominations larger
than $2,000 may be redeemed in part but only in whole multiples of $1,000,
unless all of the Notes held by a Holder are to be redeemed. On and after the
redemption date, interest will cease to accrue on Notes or portions thereof called
for redemption.

 

8.                                       OFFERS TO
REPURCHASE.

 

(a)                                  Upon the
occurrence of a Change of Control, the Issuers shall make an offer (a “Change
of Control Offer”) to each Holder to repurchase all or any part (equal
to $2,000 or an integral multiple of $1,000 thereof) of each Holder’s Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest and Additional Interest thereon, if any, to the date of purchase
(the “Change of Control Payment”). The Change of Control Offer shall be made
in accordance with Section 4.14 of the Indenture.

 

(b)                                 If the Company
or any of its Restricted Subsidiaries consummates an Asset Sale, within 10
Business Days of each date that Excess Proceeds exceed $20.0 million, the
Issuers shall commence, an offer to all Holders of the Notes and, if required
by the terms of any Indebtedness that is pari
passu with the Notes or any Guarantee (“Pari Passu Indebtedness”), to the holders of such Pari Passu
Indebtedness (an “Asset Sale Offer”),
to purchase the maximum principal amount of Notes (including any Additional
Notes) and such other Pari Passu Indebtedness that may be purchased out of
the Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Additional
Interest thereon, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes (including any Additional Notes) and such Pari
Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Issuers may use any remaining Excess Proceeds for
general corporate purposes, subject to other covenants contained in the
Indenture. If the aggregate principal amount of Notes or the Pari Passu
Indebtedness surrendered by such holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and such Pari Passu Indebtedness to
be purchased on a pro rata basis based on the
accreted value or principal amount of the Notes or such Pari Passu Indebtedness
tendered. Additionally, the Issuers may, at their option, make an Asset Sale
Offer using proceeds from any Asset Sale at any time after consummation of such
Asset Sale. Upon completion of any Asset Sale Offer, any Net Proceeds not used
to purchase Notes in such Asset Sale Offer shall not be deemed Excess Proceeds
and the Company may use any Net Proceeds not required to be used for general
corporate purposes, subject to other covenants contained in the Indenture. Holders
of Notes that are the subject of an offer to purchase will receive an Asset
Sale Offer from the Issuers prior to any related purchase date and may elect
to have such Notes purchased by completing the form entitled “Option of
Holder to Elect Purchase” attached to the Notes.

 

9.                                       DENOMINATIONS,
TRANSFER, EXCHANGE. The Notes are in registered form without coupons in
denominations of $2,000 and integral multiples of $1,000 in excess thereof. The
transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Issuers may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Issuers need not exchange or
register the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.

 

A-7

 

Also, the Issuers need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed.

 

10.                                 SUBORDINATION. The Notes and
the Guarantees are subordinated to Senior Indebtedness of the Issuers and the
Guarantors on the terms and subject to the conditions set forth in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Notes and Guarantees may be paid. The Issuers agree, and
each Holder by accepting a Note agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give it effect and appoints
the Trustee as attorney-in-fact for such purpose.

 

11.                                 PERSONS DEEMED
OWNERS. The registered Holder of a Note may be treated as its owner for
all purposes.

 

12.                                 AMENDMENT,
SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be
amended or supplemented as provided in the Indenture.

 

13.                                 DEFAULTS AND
REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01
of the Indenture. If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare the principal, premium, if any, interest and any other
monetary obligations on all the then outstanding Notes to be due and payable
immediately; provided, however, that so long as any Indebtedness
permitted to be incurred under the Indenture as part of the Senior Credit
Facilities shall be outstanding, no such acceleration shall be effective until
the earlier of: (1) acceleration of any such Indebtedness under the Senior
Credit Facilities; or (2) five Business Days after the giving of written
notice of such acceleration to the Issuers and the administrative agent under
the Senior Credit Facilities. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable immediately without further
action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees
except as provided in the Indenture. Subject to certain limitations, Holders of
a majority in aggregate principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Notes notice of any continuing Default (except a Default
relating to the payment of principal, premium, if any, Additional Interest, if
any, or interest) if it determines that withholding notice is in their interest.
The Holders of not less than a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all
of the Notes waive any existing Default and its consequences under the
Indenture, except a continuing Default in payment of the principal of, premium,
if any, Additional Interest, if any, or interest on, any of the Notes held by a
non-consenting Holder. The Issuers and each Guarantor (to the extent that such
Guarantor is so required under the Trust Indenture Act) are required to deliver
to the Trustee annually a statement regarding compliance with the Indenture,
and the Issuers are required within five (5) Business Days after becoming
aware of any Default, to deliver to the Trustee a statement specifying such
Default and what action the Issuers propose to take with respect thereto.

 

14.                                 GUARANTEES. The
Issuers’ obligations under the Notes are fully and unconditionally guaranteed,
jointly and severally, by the Guarantors.

 

15.                                 AUTHENTICATION.
This Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose until authenticated by the manual signature of
the Trustee.

 

16.                                 ADDITIONAL
RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In
addition to the rights provided to Holders of Notes under

 

A-8

 

the Indenture, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have all the
rights set forth in the Registration Rights Agreement, dated as of November 3,
2006, among Encore Medical Finance LLC, Encore Medical Finance Corp., the Guarantors
named therein and the other parties named on the signature pages thereof
(the “Registration Rights Agreement”), including the right to receive Additional
Interest (as defined in the Registration Rights Agreement).

 

17.                                 GOVERNING LAW. THE
LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE
INDENTURE, THE NOTES AND THE GUARANTEES.

 

18.                                 CUSIP AND ISIN NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Issuers have caused CUSIP and ISIN numbers to be
printed on the Notes and the Trustee may use CUSIP and ISIN numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.

 

The Issuers will furnish to
any Holder upon written request and without charge a copy of the Indenture
and/or the Registration Rights Agreement. Requests may be made to the
Issuers at the following address:

 

c/o Encore Medical Finance LLC

9800 Metric Blvd.

Austin, Texas 
78758

Facsimile: 
(512) 832 6310

Attention: 
Harry L. Zimmerman

 

A-9

 

ASSIGNMENT FORM

 

To assign this Note, fill in
the form below:

 

(I) or (we) assign and
transfer this Note to:

 

(Insert
assignee’ legal name)

 

 

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

 

 

 

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

 

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

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the face of this Note)

  
	
   

  	
   

  
	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  
						

 

*
Participant in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

 

A-10

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have
this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the
Indenture, check the appropriate box below:

 

[   ] Section 4.10            [   ] Section 4.14

 

If you want to elect to have
only part of this Note purchased by the Issuer pursuant to Section 4.10
or Section 4.14 of the Indenture, state the amount you elect to have purchased:

 

$                     

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the face of this Note)

  
	
   

  	
   

  
	
   

  	
  Tax
  Identification No.:

  	
   

  
	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  
							

 

*
Participant in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

 

A-11

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

 

The initial outstanding
principal amount of this Global Note is $                .
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of
another Global or Definitive Note for an interest in this Global Note, have
been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease

  in Principal

  Amount

  	
   

  	
  Amount of increase

  in Principal

  Amount of this

  Global Note

  	
   

  	
  Principal Amount

  of

  this Global Note

  following such

  decrease or

  increase

  	
   

  	
  Signature of

  authorized officer

  of Trustee or 

  Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*This
schedule should be included only if the Note is issued in global form.

 

A-12

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

[Encore Medical Finance
LLC/Encore Medical Finance Corp.] 

9800 Metric Blvd.

Austin, Texas  78758

Facsimile:  (512) 832 6310

Attention:  Harry L. Zimmerman

 

The
Bank of New York, a New York banking corporation

101 Barclay Street, Floor 8W

New York, New York 10286

Fax No.: (212) 815-5704

Attention:  Corporate Trust
Administration

 

Re:  113⁄4% Senior Subordinated Notes due 2014

 

Reference is hereby made to
the Indenture, dated as of November 3, 2006 (the “Indenture”),
among Encore Medical Finance LLC, Encore Medical Finance Corp., the Guarantors
named therein and the Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

 

                            
(the “Transferor”) owns and proposes to transfer the Note[s] or interest
in such Note[s] specified in Annex A hereto, in the principal amount of $                   
in such Note[s] or interests (the “Transfer”), to                             
(the “Transferee”), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.                                       [  ]
CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A
GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being
effected pursuant to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is
a “qualified institutional buyer” within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the United
States.

 

2.                                       [  ]
CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION
S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor

 

B-1

 

nor any Person acting on its
behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S under the Securities Act (iii) the transaction is not part of
a plan or scheme to evade the registration requirements of the Securities Act
and (iv) if the proposed transfer is being made prior to the expiration of
the Restricted Period, the transfer is not being made to a U.S. Person or for
the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon
consummation of the proposed transfer in accordance with the terms of the Indenture,
the transferred beneficial interest or Definitive Note will be subject to the restrictions
on Transfer enumerated in the Indenture and the Securities Act.

 

3.                                       [  ]
CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A
OR REGULATION S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):

 

(a)                                  [  ] such Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities
Act;

 

or

 

(b)                                 [  ] such Transfer is being
effected to the Issuer or a subsidiary thereof;

 

or

 

(c)                                  [  ] such Transfer is being
effected pursuant to an effective registration statement under the Securities
Act and in compliance with the prospectus delivery requirements of the Securities
Act.

 

4.                                       [  ]
CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

 

(a)                                  [  ]
CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted Definitive
Notes and in the Indenture.

 

(b)                                 [  ]
CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture,

 

B-2

 

the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(c)                                  [  ] CHECK
IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being
effected pursuant to and in compliance with an exemption from the registration
requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will not be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes or Restricted Definitive Notes
and in the Indenture.

 

B-3

 

This certificate and the
statements contained herein are made for your benefit and the benefit of the
Issuers.

 

	
   

  	
  [Insert
  Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
						

 

B-4

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1.                                       The Transferor
owns and proposes to transfer the following:

 

[CHECK ONE OF (a) OR (b)]

 

(a)                                  [  ]
a beneficial interest in the:

 

(i)                           [  ] 144A Global Note (CUSIP 292572AA2),
or

 

(ii)                        [  ] Regulation S Global Note
(CUSIP U29164AA5), or

 

(b)                                 [  ]
a Restricted Definitive Note.

 

2.                                       After the
Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a)                                  [  ]
a beneficial interest in the:

 

(i)                           [  ] 144A Global Note (CUSIP 292572AA
2), or

 

(ii)                        [  ] Regulation S Global Note
(CUSIP U29164AA5), or

 

(iii)                     [  ] Unrestricted Global Note
(CUSIP 292572AB0); or

 

(b)                                 [  ]
a Restricted Definitive Note; or

 

(c)                                  [  ] an
Unrestricted Definitive Note, in accordance with the terms of the Indenture.

 

B-5

 

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

[Encore Medical Finance
LLC/Encore Medical Finance Corp.] 

9800 Metric Blvd.

Austin, Texas  78758

Facsimile:  (512) 832 6310

Attention:  Harry L. Zimmerman

 

The
Bank of New York

101 Barclay Street, Floor 8W

New York, New York 10286

Fax No.: (212) 815-5704

Attention:  Corporate Finance Unit

 

Re:  113⁄4% Senior Subordinated Notes due 2014

 

Reference is hereby made to
the Indenture, dated as of November 3, 2006 (the “Indenture”),
among Encore Medical Finance LLC, Encore Medical Finance Corp., the Guarantors
named therein and the Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

 

                      
(the “Owner”) owns and proposes to exchange the Note[s] or interest in
such Note[s] specified herein, in the principal amount of $            
in such Note[s] or interests (the “Exchange”). In connection with the
Exchange, the Owner hereby certifies that:

 

1)                                      EXCHANGE OF
RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE
FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED
GLOBAL NOTE

 

a)                                   [  ] CHECK IF EXCHANGE IS FROM
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner’s
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with the United States Securities Act of 1933, as
amended (the “Securities Act”), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.

 

b)                                  [  ] CHECK IF EXCHANGE IS FROM
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE.
In connection with the Exchange of the Owner’s beneficial interest in a
Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Definitive Note is being acquired for the Owner’s own account
without transfer, (ii) such Exchange has

 

C-1

 

been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

 

c)                                   [  ] CHECK IF EXCHANGE IS FROM
RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL
NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note
for a beneficial interest in an Unrestricted Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner’s
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.

 

d)                                  [  ] CHECK IF EXCHANGE IS FROM
RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with
the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner’s own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

 

2)                                      EXCHANGE OF
RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL
NOTES

 

a)                                   [  ] CHECK IF EXCHANGE IS FROM
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In
connection with the Exchange of the Owner’s beneficial interest in a Restricted
Global Note for a Restricted Definitive Note with an equal principal amount,
the Owner hereby certifies that the Restricted Definitive Note is being
acquired for the Owner’s own account without transfer. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the Restricted
Definitive Note issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Definitive Note and in the Indenture and the Securities Act.

 

b)                                  [  ] CHECK IF EXCHANGE IS FROM
RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial
interest in the [CHECK ONE]  [   ] 144A Global Note [   ] Regulation S Global Note, with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer and (ii) such
Exchange has been

 

C-2

 

effected in compliance with
the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.

 

This certificate and the
statements contained herein are made for your benefit and the benefit of the
Issuers and are dated                                           .

 

	
   

  	
  [Insert
  Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
						

 

C-3

 

EXHIBIT D

 

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

 

Supplemental Indenture (this
“Supplemental Indenture”), dated as of               ,
among                             
(the “Guaranteeing Subsidiary”), a subsidiary of [Encore Medical Finance
LLC/Encore Medical Finance Corp.], a Delaware [limited liability company/corporation]
(the “Issuer”), and The Bank of New York, a New York banking corporation,
as trustee (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, each of Encore
Medical Finance LCC, Encore Medical Finance Corp. and the Guarantors (as
defined in the Indenture referred to below) has heretofore executed and
delivered to the Trustee an indenture (the “Indenture”), dated as of November 3,
2006, providing for the issuance of an unlimited aggregate principal amount of
113⁄4% Senior Subordinated Notes due 2014 (the “Notes”);

 

WHEREAS, the Indenture
provides that under certain circumstances the Guaranteeing Subsidiary shall
execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s
Obligations under the Notes and the Indenture on the terms and conditions set
forth herein and under the Indenture (the “Guarantee”); and

 

WHEREAS, pursuant to Section 9.01
of the Indenture, the Trustee is authorized to execute and deliver this
Supplemental Indenture.

 

NOW THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

(1)                                  Capitalized
Terms. Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.

 

(2)                                  Agreement to
Guarantee. The Guaranteeing Subsidiary hereby agrees as follows:

 

(a)                                  Along with all Guarantors named in the
Indenture, to jointly and severally unconditionally guarantee to each Holder of
a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of the
Indenture, the Notes or the obligations of the Issuers hereunder or thereunder,
that:

 

(i)                                      the principal of and interest, premium and Additional
Interest, if any, on the Notes will be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Issuer to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and

 

(ii)                                   in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed

 

D-1

 

or any performance so guaranteed
for whatever reason, the Guarantors and the Guaranteeing Subsidiary shall be
jointly and severally obligated to pay the same immediately. This is a
guarantee of payment and not a guarantee of collection.

 

(b)                                 The obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Notes or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Issuer, any action
to enforce the same or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.

 

(c)                                  The following is hereby waived:  diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Issuer, any right to require a proceeding first against the Issuer, protest,
notice and all demands whatsoever.

 

(d)                                 This Guarantee shall not be discharged except
by complete performance of the obligations contained in the Notes, the
Indenture and this Supplemental Indenture, and the Guaranteeing Subsidiary
accepts all obligations of a Guarantor under the Indenture.

 

(e)                                  If any Holder or the Trustee is required by
any court or otherwise to return to the Issuer, the Guarantors (including the
Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other
similar official acting in relation to either the Issuer or the Guarantors, any
amount paid either to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.

 

(f)                                    The Guaranteeing Subsidiary shall not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.

 

(g)                                 As between the Guaranteeing Subsidiary, on
the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as
provided in Article 6 of the Indenture for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in Article 6
of the Indenture, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guaranteeing Subsidiary for the purpose
of this Guarantee.

 

(h)                                 The Guaranteeing Subsidiary shall have the
right to seek contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the Holders under this Guarantee.

 

(i)                                     Pursuant to Section 11.02 of the
Indenture, after giving effect to all other contingent and fixed liabilities
that are relevant under any applicable Bankruptcy or fraudulent conveyance laws,
and after giving effect to any collections from, rights to receive contribution
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under Article 11 of the Indenture,
this new Guarantee shall be limited to the maximum amount permissible such that
the obligations of such Guaranteeing Subsidiary under this Guarantee will not
constitute a fraudulent transfer or conveyance.

 

D-2

 

(j)                                     This Guarantee shall remain in full force and
effect and continue to be effective should any petition be filed by or against the
Issuer for liquidation, reorganization, should the Issuer become insolvent or
make an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of the Issuer’s assets, and
shall, to the fullest extent permitted by law, continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of
the Notes are, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee on the Notes and Guarantee,
whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though
such payment or performance had not been made. In the event that any payment or
any part thereof, is rescinded, reduced, restored or returned, the Note
shall, to the fullest extent permitted by law, be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.

 

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

 

(l)                                     This Guarantee shall be a general unsecured senior
subordinated obligation of such Guaranteeing Subsidiary, ranking pari passu with any other future Senior Indebtedness of the
Guaranteeing Subsidiary, if any.

 

(m)                               Each payment to be made by the Guaranteeing
Subsidiary in respect of this Guarantee shall be made without set-off,
counterclaim, reduction or diminution of any kind or nature.

 

(3)                                  Execution and
Delivery. The Guaranteeing Subsidiary agrees that the Guarantee
shall remain in full force and effect notwithstanding the absence of the
endorsement of any notation of such Guarantee on the Notes.

 

(4)                                  Merger,
Consolidation or Sale of All or Substantially All Assets.

 

(a)                                  Except as
otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing
Subsidiary may not consolidate or merge with or into or wind up into
(whether or not the Issuer or Guaranteeing Subsidiary is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets, in one or more related
transactions, to any Person unless:

 

(i)                                     (A) the Guaranteeing Subsidiary is the
surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Guaranteeing Subsidiary) or to which
such sale, assignment, transfer, lease, conveyance or other disposition will
have been made is a corporation organized or existing under the laws of the
jurisdiction of organization of the Guaranteeing Subsidiary, as the case may be,
or the laws of the United States, any state thereof, the District of Columbia,
or any territory thereof (the Guaranteeing Subsidiary or such Person, as the
case may be, being herein called the “Successor Person”);

 

(B)                                the Successor Person, if other than the
Guaranteeing Subsidiary, expressly assumes all the obligations of the
Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s
related Guarantee pursuant to supplemental indentures or other documents or
instruments in form reasonably satisfactory to the Trustee;

 

(C)                                immediately after such transaction, no
Default exists; and

 

D-3

 

(D)                               the Issuer shall have delivered to the
Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indentures, if
any, comply with the Indenture; or

 

(ii)                                  the transaction is made in compliance with Section 4.10
of the Indenture;

 

(b)                                 Subject to
certain limitations described in the Indenture, the Successor Person will
succeed to, and be substituted for, the Guaranteeing Subsidiary under the
Indenture and the Guaranteeing Subsidiary’s Guarantee. Notwithstanding the
foregoing, the Guaranteeing Subsidiary may merge into or transfer all or part of
its properties and assets to another Guarantor or the Issuer.

 

(5)                                  Releases.

 

The Guarantee of the
Guaranteeing Subsidiary shall be automatically and unconditionally released and
discharged, and no further action by the Guaranteeing Subsidiary, the Issuer or
the Trustee is required for the release of the Guaranteeing Subsidiary’s
Guarantee, upon:

 

(1)                                  (A)  any sale, exchange or transfer (by
merger or otherwise) of the Capital Stock of the Guaranteeing Subsidiary
(including any sale, exchange or transfer), after which the Guaranteeing
Subsidiary is no longer a Restricted Subsidiary or all or substantially all the
assets of the Guaranteeing Subsidiary which sale, exchange or transfer is made
in compliance with the applicable provisions of the Indenture;

 

(B)                                the release or discharge of the guarantee by
the Guaranteeing Subsidiary of the Senior Credit Facilities or the guarantee
which resulted in the creation of the Guarantee, except a discharge or release
by or as a result of payment under such guarantee;

 

(C)                                the proper designation of the Guaranteeing
Subsidiary as an Unrestricted Subsidiary; or

 

(D)                               the Issuer exercising its Legal Defeasance
option or Covenant Defeasance option in accordance with Article 8 of the
Indenture or the Issuer’s obligations under the Indenture being discharged in
accordance with the terms of the Indenture; and

 

(2)                                   the Guaranteeing Subsidiary delivering to the
Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for in the Indenture relating to such
transaction have been complied with.

 

(6)                                  No Recourse
Against Others. No director, officer, employee, incorporator or stockholder
of the Guaranteeing Subsidiary shall have any liability for any obligations of the
Issuer or the Guarantors (including the Guaranteeing Subsidiary) under the
Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting Notes waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.

 

(7)                                  Governing Law. THIS
SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

 

(8)                                  Counterparts. The parties may sign
any number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement.

 

D-4

 

(9)                                  Effect of
Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.

 

(10)                            The Trustee. The Trustee
shall not be responsible in any manner whatsoever for or in respect of the validity
or sufficiency of this Supplemental Indenture or for or in respect of the recitals
contained herein, all of which recitals are made solely by the Guaranteeing
Subsidiary.

 

(11)                            Subrogation. The
Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes
against the Issuer in respect of any amounts paid by the Guaranteeing
Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01
of the Indenture; provided that, if an Event of Default has occurred and
is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or
receive any payments arising out of, or based upon, such right of subrogation
until all amounts then due and payable by the Issuer under the Indenture or the
Notes shall have been paid in full.

 

(12)                            Benefits
Acknowledged. The Guaranteeing Subsidiary’s Guarantee is subject
to the terms and conditions set forth in the Indenture. The Guaranteeing
Subsidiary acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Indenture and this Supplemental
Indenture and that the guarantee and waivers made by it pursuant to this Guarantee
are knowingly made in contemplation of such benefits.

 

(13)                            Successors. All
agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall
bind its Successors, except as otherwise provided in Section 2(k) hereof
or elsewhere in this Supplemental Indenture. All agreements of the Trustee in
this Supplemental Indenture shall bind its successors.

 

D-5

 

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

 

	
   

  	
  [GUARANTEEING
  SUBSIDIARY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK, a New York 

  
	
   

  	
  banking
  corporation, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

D-6

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